Councillor Mike Smith substituted for Councillor Sylvia Whyte.

To confirm and sign as a correct record the Minutes of the meeting held on 28 November 2024 (Appendix A).

The minutes of the meeting of the Committee held on 28 November 2024 were confirmed and signed as a correct record.

Apologies for absence were received from Councillors Manu Singh (Vice Chair),

John Furey, and Mark Nuti.

Members are invited to declare any disclosable pecuniary interests or other registrable and non-registrable interests in items on the agenda.

There were no declarations of interest.

The Committee was provided with an update on progress with BDO’s completion of the external audit for the years 2019/20 through to 2022/23, noting that the statutory backstop date of 13 December 2024, had not been met.

Members recalled that with regard to the Statement of Accounts, BDO had set out the type of opinion that they expected to provide for each of the outstanding years at the previous meeting.  These were an “except for” qualification for 2019/20, due to incomplete testing of employee costs, and disclaimer opinions for the subsequent years due to the imposition of the backstop date.

The auditor also needed to have completed their work in respect of the Council’s value for money arrangements, or have determined that any remaining work would not have a material impact on the Statement of Accounts.

Officers reported that BDO had informed the Council that they were no longer seeking an external legal opinion regarding the basis for investment property acquisitions.  Instead BDO had requested additional disclosures to be made in the Statement of Accounts to set out the legal advice the Council had procured in respect of its commercial property acquisition and the legal powers it had relied with regard to matters relating to historic property acquisition.

Officers confirmed that BDO would probably refer to these disclosures within their audit report, most likely within the laws and regulation section of the opinion.  They would then undertake a formal consultation on this approach with their Technical Support Team, through the submission of a paper to be prepared by the auditor, which would consider the disclosures the Council made, the proposed audit report, and the work the auditor had done in relation to this matter.

Members were made aware that the route suggested by BDO should enable the auditor to close off their audit for 2019/20 and issue opinions for all years up to 2022/23.  However, it placed additional work on the Council to provide the responses required and re-submit the Statement of Accounts for 2019/20, while at the same time progressing the outstanding, unaudited 2023/24 Statement of Accounts and preparing for the closedown of 2024/25.

Officers cautioned that there was no guarantee that BDO would be able to complete their review, secure input from their Technical Support Team and provide the relevant reports to the Council, within the timelines indicated.  Nevertheless, the Council had a duty to work with the auditors to ensure progress was made and helping to restore the audit system.

Members agreed that it might be appropriate to arrange a special meeting of the Committee to consider all of the outstanding reports from BDO and sign off the Statements of Account for each of these years, rather than taking them to the next scheduled meeting (18th March).  However, this depended on how quickly the work could be completed.

In addition to reporting on the 2019/20 Statement of Accounts and value for money conclusion, BDO would be issuing a disclaimer of opinion on the Council’s Statement of Accounts  ...  view the full minutes text for item 50.

The Committee received for information an update on the Council’s progress with implementation of recommendations made by the new external Auditors, Grant Thornton.  They had been appointed as the Council’s external auditor for the 5-year period commencing with the audit of the 2023/24 financial year.

Members recalled that as part of their responsibilities under the National Audit Office (NAO) Code of Practice (the Code), the external auditor was required to consider whether the Council had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, often referred to as “value for money” arrangements. 

Grant Thornton had produced an interim report with recommendations, on which Officers had been asked to provide a progress report after 6 months.  Therefore, the Committee was provided with a summary of the conclusions identified by the auditor, in each of the 3 areas of assessment required by the Code.  As a result of these findings, the auditor made one key recommendation as a result of finding significant weakness in the Council’s arrangements for financial sustainability; and six improvement recommendations which, if implemented, might improve the Council’s value for money arrangements, but were not as a result of identifying a significant weakness in those arrangements.  The details were set out in the Appendix to the Officer’s report.

Members noted that since the first report in July 2024, further progress had been made in the intervening months.  In particular, the considerable improvement to the MTFF contained within the 2025/26 Budget Report.  An independent review of the Council’s approach to its Medium-Term Financial Strategy had also been conducted by the Local Government Association’s Finance Improvement and Sustainability Adviser.  Members welcomed this positive engagement, which had not produced any concerns or areas for development.

In addition, the MHCLG’s decision not to reissue the Council’s NS BVN provided the Committee with assurance of the Council’s progress in addressing matters relating to the financial sustainability and the delivery of its best value duty and the external auditor had been made aware of these milestone achievements.

Members noted that the Internal Audit Plan for 2024/25 included a review of savings realisation, the outcome of which would be reported in the next Progress Report to the Committee scheduled for March 2025.  A follow up report would also be submitted to the Overview and Scrutiny Select Committee, which would include the cumulative financial benefits delivered since the revised process was set up.

Officers re-iterated that while the Council was actively seeking to respond to all of the identified recommendations, as part of its commitment to seek continuous improvement in the delivery of its best value duty, the 6 improvement recommendations had been raised by the auditor as opportunities for improvement and were not in response to any perceived significant weakness in the Council’s arrangements.

Members noted that the Annual Governance Statement was scheduled for review by in May 2025.  Officers agreed to share with the Committee a list of the previously identified tasks which helped inform the Annual Governance  ...  view the full minutes text for item 51.

The Committee noted an update from Grant Thornton in respect of completion of the 2023/24 external audit, progression with the forward plan for 2024/25, as well as a summary of emerging national issues and developments in the audit sector.

As previously reported, it was confirmed that Grant Thornton were unable to complete the external audit for 2023/24, as the Council’s draft Statement of Accounts had not yet been published.  A ‘disclaimer of opinion’ would be issued, because the backstop date of 28 February 2025 could not be met.  The Committee noted the steps that had to be taken before the disclaimed opinion could be issued, and preparatory work which was substantially complete on the 2023/24 audit deliverables.  Milestones in the 2024/25 audit were also noted; the process being supported regular meetings and opportunities for Officers and Members to attend workshops and webinars as appropriate.

Members were advised that the PSAA had published their scale fees for 2024/25.  For Runnymede these were £216,293.  The fee reflected the increased work as well as the scarcity of audit firms willing to do the work.

There were a number of sector updates.  Officers highlighted requirements with regard to lease accounting under the International Financial Reporting Standards (IFRS) 16.  This removed the distinction between operating and finance leases for lessees.  All leases, apart from those deemed low value or short term (a judgement to be made with guidance), had to be accounted for on the balance sheet by lessees.  There were a number of key considerations to be determined in consultation with colleagues in Assets and Regeneration, which would in turn by scrutinised by the external auditors.

Key dates were noted in respect of ending the local audit backlog as well as lessons to be learned from recent Auditors’ annual reports.  These were particularly relevant for colleagues dealing with the challenges arising from transformation and savings plans, financial governance and internal control, performance management and procurement and the Housing Revenue Account.

The Committee’s attention was also drawn to the Code of Practice on Good Governance, the role of Audit Committees, local authority effectiveness in dealing with homelessness and housing targets, and the role of the social landlord, being especially relevant to Runnymede with its own Housing stock.

Officers were thanked for their thorough report which was duly noted.

The Committee noted the latest Internal Audit progress report from SIAP, the Council’s internal audit provider.

For 2024/25, 29% of the plan was complete, 59% was work in progress, and 12% was yet to complete as it pertained to Quarter 4, so was not yet due, and all the scoping for these audits had been completed. 

The Committee was advised that since the last meeting, Climate Change and Emergency Planning and Business Continuity had attained a ‘reasonable’ assurance opinion.  Since publication of the agenda, two other audits had been completed: Homes for Ukraine and Workforce Planning.

Members were assured that for Emergency Planning, a system of out of hours ‘cascade’ was in place to provide the necessary level of resilience should a major incident occur.  This was supported by Applied Resilience and a mutual aid arrangement with neighbouring authorities.

There was one outstanding ‘legacy’ recommendation in respect of an HR upgrade that was needed in order to implement an action in the Meals at Home Service.  The upgrade had now been requested, but there was a system in place to resolve should this not be forthcoming.

The report was duly noted.

The Committee was appraised of the new Global Internal Audit Standards (GIAS); issued by the Institute of Internal Auditors and applicable to both the private and public sector.  It significantly revised the International Professional Practice Framework and replaced the Public Sector Internal Audit Standards.

Officers reported that the aim of the GIAS was a single source guide to serve as a basis for evaluating and elevating the quality of the internal audit function.

Officers set out the new regime, which had 5 domains, incorporating 15 principles, and 52 standards; thus it introduced new expectations and a higher level of prescription.  A comparison of the old and new regimes highlighted differences in the areas of Ethics and Professionalism, Governance and Management of internal audit.

The Committee noted that the overarching bodies were the relevant Internal Audit Standards Setters (RIAS) and the UK public sector Internal Audit Standards Advisory Board (IASAB) and that a consultation on the GIAS had been carried out in the latter half of 2024.

In addition to the main GIAS, there were some key requirements and interpretations applying specifically to the public sector.  These were that; a chief internal auditor must prepare and overall conclusion encompassing governance, risk management and control.  Further the chief internal auditor would have to be both professionally qualified and have the appropriate knowledge and skills for public sector auditing.  Finally, an External Quality Assessment would need to be undertaken, providing an overall opinion on the internal audit functions conformance with the GIAS and Application Notes on GIAS in the UK public sector.

Officers advised that the new standards included ‘essential conditions’ for the governance of internal audit, bearing in mind that in local government, elected Members were ultimately those charged with Governance.

The Committee was assured that SIAP had conducted a full gap analysis and had an action plan in place for when the GIAS came into force from 1 April 2025.  The plan involved engagement with Officers and Members so that all would be fully conversant with the new regime and the ground rules for its implementation.  The importance of the Council’s Code of Governance was also noted.

The topic of Artificial Intelligence (AI) and its potential use in internal audit was touched upon.  Members were aware of the opportunities as well as the risks which would need to be carefully considered and mitigated against should AI become a part of scoping and reporting management processes.

The report was duly noted.

The Committee noted the positive outcome of the former Department for Levelling Up, Housing and Communities’ Non-Statutory Best Value Notice which was also reviewed by the Corporate Management Committee and which would also be reported to the full Council as required by Government.

Members recalled that the Government had issued the notice in December 2023, giving the Council a year to demonstrate compliance with its Best Value duty.  Officers had undertaken a significant amount of work to illustrate how the Council addressed risk; an action plan and nine stream work programme had been implemented, which had been reviewed and reported on regularly to Members throughout the year.

The Committee was provided with a summary of each workstream, its status and links to evidence amounting to some 200 documents.  Members appreciated the volume of additional work arising from the Notice and were very pleased that around the anniversary of its issue, the Government had decided not to renew the Notice.

However, it was still recognised that the Council’s capital borrowing levels and debt metrics would still be an outlier in the sector and dialogue with the Government would continue, albeit outside of the Best Value measures and intervention.

Officers would continue delivery of continuous improvement within a robust structure and framework, overseen by the Council’s new Continuous Improvement Board. 

Officers were thanked for their report which was duly noted.

The Committee was asked to note progress with the delivery of the Action Plan resulting from the 2024 self-assessment against the Best Value guidance.

Members recalled that there were seven overlapping themes of good practice for running an authority that meets and delivers best value.  At its heart was Continuous Improvement which would be the outcome of all the themes working well together.  Within the themes were 72 characteristics of a well functioning authority.  The Council had undertaken a self-assessment against these characteristics and progress was set out in the appendix to the Officer’s report.

Officers would reassess the position in relation to the Best Value duty in Quarter 1 of 2025/26, with a view to reporting to the Committee in July 2025.

The Committee noted the legal context, resource and risk implications.  It was agreed that progress presented in delivering the action plan demonstrated a satisfactory position.  The majority of actions due to be completed were for the Chief Executive’s office and Human Resources and Organisational Development service areas to deliver.  Officers reported these delivery timelines might need to be amended to prioritise resource to support the challenges and opportunities presented for local government under devolution and re-organisation.

The report was duly noted.

The Committee’s approval was sought for a revised Local Code of Corporate Governance for 2025/26.  This would be referred to the Corporate Management Committee in March with a view to adoption by full Council in April 2025.

Members recalled that the first Local Code of Corporate Governance was introduced in 2018, reflecting CIPFA guidance at the time.  The revised version of the code, as appended to the Officer’s report, related to the current governance systems at the start of the new Municipal Year 2025/25.  This framework document underpinned the Council’s Corporate Business Plan and would need to incorporate any changes to the Annual Governance Statement.

The Committee noted that the two major developments since the last Code was issued were the introduction of the Council’s Risk Management Framework and associated Risk Appetite Statement and the Council’s response to and ongoing work programme relating to the Non-Statutory Best Value Notice.  All of these had been the subject of various reports to the Committee at regular intervals.

The Committee was pleased to approve the revised Local Code of Corporate Governance, making no amendments thereto, save to ask Officers to ensure that the links in the document, introduced to complement the format and content of the Annual Governance Statement, had been fixed, an error which had come to light at a recent meeting of the Constitution Member Working Party.

Resolved that –

the revised Local Code of Corporate Governance be recommended for approval by Corporate Management Committee on 20 March 2025 and in turn by the full Council on 24 April 2025

The Committee was asked whether it wished to submit a corporate response on behalf of the Council, to a recent consultation issued by central Government, on strengthening the Standards and Conduct Framework for Local Authorities in England.

The consultation had evolved from discussions involving local authorities, the Local Government Association and others around the effectiveness of the Localism Act 2011, the principles standards in public life and the subsequent publication of an updated model code of conduct for elected Members and guidance in 2021.  The Act had been seen as a ‘light touch’ approach which warranted reform to the current standards and conduct regime. 

Officers advised that the consultation had been grouped under 13 headings with a number of questions in each section, as indicated by (number) below.  These were:

·         Strengthening the standards and conduct framework (3)

·         Standards committees (6)

·         Publishing investigation outcomes (1)

·         Requiring the completion of investigations if a member stands down (1)

·         Empowering individuals affected by councillor misconduct to come forward (6)

·         Introducing the power of suspension with related safeguards (3)

·         The length of suspension (2)

·         Withholding allowances and premises and facilities bans (3)

·         Interim suspension (6)

·         disqualification for multiple breaches and gross misconduct (2)

·         appeals (5)

·         potential for a national appeals body (2)

·         public sector equality duty (1)

Members decided that a corporate response would be appropriate.  It would also demonstrate that the Council took the conduct of elected Members seriously and would strengthen public confidence in those appointed to public office.  It was noted that individual councillors were also free to submit an individual response if there were particular views they wished the Government to be aware of.

Members had previously been circulated with a summary of the feedback received so far from Members of the Committee.  This identified areas of consensus, and highlighted where the answers were not so clear cut, and required further discussion.

In the interests of transparency and clarity, every question was reviewed, noting those where Officers would be required to provide statistical information regarding complaints made about Councillors in the last 12 months (from January 2024 to January 2025).

Officers would collate the statistical data requested, indicating the average number of complaints received about Councillors in 2024 [5, actual number 6], broken down by where the complaints had come from [Officers (0), other elected Members (2), and the public (4)].

Generally, Members were in agreement.  For example, the retention of a councillor code of conduct, and the re-introduction of sanctions, including the option to suspend councillors, which had been removed by the Localism Act in 2011.

Members agreed that continuance of the role of the Standards and Audit Committee to oversee councillor conduct was important, and the option to involve an independent body into the process was approved.  However, this stopped short of having an Independent person Chair the Committee or have voting rights.

In terms of dealing with complaints, Members were keen for a framework to be fair, consistent and transparent; to demonstrate accountability, whilst having safeguards to protect  ...  view the full minutes text for item 58.

There were no exempt or confidential items on the agenda.