Agenda and minutes

The Chair welcomed all those present to the meeting and led on introductions.

Apologies of absence were received from Councillor Adatia and Councillor Whittle.

Members will be asked to declare any interests they have in the business to be discussed.

Members were asked to declare any interests they may have in the business to be discussed.

There were no declarations of interest.

The Chair announced that this meeting would be Grant Patterson's final meeting as an external member of the committee and thanked him for his service and support to the Leicester City Council.

Grant Patterson expressed his gratitude and noted the positive working relationship with the Council.

The Director of Finance submits a report to the Governance and Audit Committee which presents the report by Grant Thornton on the Council’s transactions to Haymarket Consortium Limited.

The Committee is recommended to note the report and provide any comments to the External Auditors or Monitoring Officer.

The Director of Finance submitted a report to the Governance and Audit Committee which presents the report by Grant Thornton on the Council’s transactions to Haymarket Consortium Limited. Grant Patterson, External Auditor for Grant Thornton, presented the related parties transaction report and addressed concerns regarding a transaction involving a loan to Haymarket Consortium Limited. • It was determined that the loan did not need to be disclosed as a related party transaction under accounting standards nor did it constitute a disclosable interest under the Council's constitution. • The audit did not find any disclosable interests involving the City Mayor's daughter and the Haymarket. It was concluded that the City Mayor did not have a beneficial interest in HCL, and the relationship did not meet the threshold for disclosure under accounting standards. • Members of the committee appreciated the report's thoroughness and structure of the report and emphasised the importance of asking questions from an independent viewpoint. • Members found the report clear and accessible despite the complex subject matter and appreciated the audit's thorough approach. • Grant Patterson confirmed that the transaction with Haymarket Consortium Limited did not meet the threshold for a related party disclosure under accounting standards. It was concluded that no further actions were necessary regarding this transaction.

RESOLVED:

The Committee noted the report and provided comments to the External Auditors.

The Director of Finance submits a report to the Governance and Audit Committee which presents the Statutory Statement of Accounts and Annual Governance Statement for 2022-2023.

The Governance & Audit Committee is recommended to:

·         Note the auditor’s ISA 260 Report (the Audit Findings Report) to those charged with Governance and the recommendations contained within it, attached at Appendix 1.

·         Approve the Statement of Accounts 2022/23, Appendix 2

·         Approve the Annual Governance Statement 2022/23, Appendix 2.

·         Approve the Letter of Representation submitted by the Director of Finance (S151), attached at Appendix 3.

·         Delegate authority to approve any minor amendments to the Annual Accounts and the Annual Governance Statement to the Director of Finance, subject to a report to the Committee at the next meeting.

The Director of Finance submitted a report to the Governance and Audit Committee which presents the Statutory Statement of Accounts and Annual Governance Statement for 2022-2023.

The committee discussed the key findings from the audit report presented by Amy Oliver and Grant Patterson.

• Key concerns included issues related to the valuation of property, plant, and equipment, and the implications of a recent cyber-attack.

• Members of the committee raised questions about the need for clearer financial projections and understanding the council’s financial position through 2025/26.

• The committee agreed that financial sustainability should be a regular agenda item. The committee approved the ISA 260 report, the statement of accounts, and the letter of representation for 2022/23, with a focus on monitoring financial sustainability and integrating it into future planning.

RESOLVED:

The Governance & Audit Committee:

Noted the auditor’s ISA 260 Report (the Audit Findings Report) to those charged with Governance and the recommendations contained within it, attached at Appendix 1.

Approved the Statement of Accounts 2022/23, Appendix 2

Approved the Annual Governance Statement 2022/23, Appendix 2.

Approved the Letter of Representation submitted by the Director of Finance (S151), attached at Appendix 3.

The Director of Finance submits a report to the Governance and Audit Committee which presents the Value for Money report for 2022-2023.

The Committee is recommended to note the Finance Update report attached at appendix B, to those charged with Governance and pass any comments to the External Auditor.

The Director of Finance submitted a report to the Governance and Audit Committee which presents the Value for Money report for 2022-2023.

Alexa Ngini, External Auditor for Grant Thornton, presented the External Audit Annual Report, identifying a significant weakness in the Council's financial sustainability. Immediate actions were recommended to address budget gaps.

• Members of the committee emphasized the importance of strategic planning and avoiding last-minute crisis management and appreciated the clarity of the report and the discussion on enhancing internal processes.

• Members recognised the need for increased oversight and strategic management to address these financial challenges, agreeing on the necessity for cross-committee awareness and ongoing monitoring of financial sustainability. 9

RESOLVED:

The Committee noted the Finance Update report attached at appendix B, to those charged with Governance and passed any comments to the External Auditor.

The Director of Finance submits a report to the Governance and Audit Committee informing of updates including the improvements on accounts at Leicester City Council.

The Governance & Audit Committee is recommended to note the report.

The Director of Finance submitted a report to the Governance and Audit Committee informing of updates including the improvements on accounts at Leicester City Council.

Amy Oliver, Director of Finance, provided an update on the Council's ongoing efforts to enhance financial processes, including continuous training and internal reviews.

• The committee discussed the impact of the recent cyber incident, which has caused delays and may affect the 2023/24 deadlines.

• Emphasis was placed on maintaining strong internal controls and effective governance, particularly considering the challenges to financial sustainability.

• The committee acknowledged the steps being taken to improve these processes and stressed the importance of robust governance and risk management practices.

RESOLVED:

The Governance & Audit Committee noted the report.

MEMBERS OF THE PUBLIC TO NOTE

Under the law, the Committee is entitled to consider certain items in private where in the circumstances the public interest in maintaining the matter exempt from publication outweighs the public interest in disclosing the information. Members of the public will be asked to leave the meeting when such items are discussed.

The Committee is recommended to consider the following reports in private on the grounds that they contain ‘exempt’ information as defined by the Local Government (Access to Information) Act 1985, as amended, and consequently that the Sub-Committee makes the following resolution:-

“that the press and public be excluded during consideration of the following reports in accordance with the provisions of Section 100A(4) of the Local Government Act 1972, as amended, because they involve the likely disclosure of 'exempt' information, as defined in the Paragraphs detailed below of Part 1 of Schedule 12A of the Act, and taking all the circumstances into account, it is considered that the public interest in maintaining the information as exempt outweighs the public interest in disclosing the information.”

Paragraph 3

Information relating to the financial or business affairs of any particular person

(including the authority).

·       Future Provision of the Internal Audit Service

RESOLVED:

That the press and public be excluded during consideration of the following reports in accordance with the provisions of Section 100A(4) of the Local Government Act 1972, as amended, because they involve the likely disclosure of 'exempt' information, as defined in the Paragraphs detailed below of Part 1 of Schedule 12A of the Act, and taking all the circumstances into account, it was considered that the public interest in maintaining the information as exempt outweighed the public interest in disclosing the information. Paragraph 3 - Information relating to the financial or business affairs of any particular person.(including the authority).

The purpose of this report is to update the Committee with the progress being made to engage a new internal audit service provider.

It is recommended that the Committee notes the report and make any comments to the Director of Finance.

The Head of Finance submitted a report on the planned changes to the future provision of the Internal Audit Service and work taking place to identify a new provider.

Head of Finance, Colin Sharpe presented the report. Members of the Committee discussed the report and raised a number of points to which officers provided further explanations and assurances. The Chair thanked officers for the report.

AGREED:

1. That the report be noted.

2. That any comments made in the meeting be taken into consideration during future progress on the procurement of a new internal auditor.

There being no further business, the meeting closed at 19:30pm