Agenda and minutes

There were none. 

To approve the record of the meeting held on 19 November 2020.

The record of the meeting held on 19 November 2020 was agreed and signed by the Chairman as accurate.

The Chairman confirmed that he had accepted one report as urgent. Agenda Item 9 (Risk Strategy Review) had been circulated separately to the agenda and was accepted as urgent to enable the Committee to consider the report prior to consideration by the Business Support Overview and Scrutiny Committee (28 January 2021) and the Cabinet (2 February 2021). 

Members are invited to disclose any Disclosable Pecuniary Interests or Other Significant Interests in accordance with the Member Code of Conduct.  Guidance on this is set out in agenda item 4.

Disclosable pecuniary interests

There were none.

Other significant interests (OSIs)

Councillor Gulvin declared an OSI in agenda item 5 (Treasury Management Strategy 2021/22) because he is a Director of Medway Development Company Ltd and he relied on a dispensation granted by the Councillor Conduct Committee to enable him to take part in the discussion and vote on this item.

Other interests

Councillor Gulvin declared an interest in agenda items 6 (Audit and Counter Fraud Update), 7 (Audit and Counter Fraud Charter) and 8 (Review of Audit and Counter Fraud Quality Assurance and Improvement Programme) in relation to the consideration of any matters in his portfolio.

This report presents the Council’s Treasury Management Strategy for the 2021/22 financial year. The Treasury Management Strategy incorporates within it the Treasury Management Policy Statement, Annual Investment Strategy and Minimum Revenue Provision Policy.

Discussion:

This report provided details of the Council’s Treasury Management Strategy for the 2021/22 financial year. The Strategy incorporated within it the Treasury Management Policy Statement, Annual Investment Strategy and the Minimum Revenue Provision Policy.

The Finance Business Partner – Corporate Services advised the Committee of the key issues in the report, highlighting the overall aim of the Strategy which was to keep borrowing as low as possible, therefore cash balances would also be relatively low, limiting the scope for long term treasury investments i.e. investments of cash balances rather than capital expenditure in pursuit of council objectives. He referred to Table 1 in paragraph 3.7.2 of the Strategy which showed the capital programme and funding up to 2023/24 as currently approved.

He provided a detailed explanation of the Capital Financing Requirement (CFR) and the Minimum Revenue Provision (MRP). He also made reference to the schedule of debt repayments highlighting the spike in 2022/23 which had been caused in the main by the Public Work Loans Board (PWLB) hike in interest rates in 2019 and the Covid 19 pandemic which had led to some short term borrowing.

Members then raised a number of questions and comments which included:

Member priorities – in response to a question, the Head of Finance Strategy confirmed that that there was one scheme currently being undertaken (St Mary’s Amateur Boxing Club - £40,000) within this element of the Capital Programme.

Borrowing – in response to questions on borrowing, the Finance Business Partner – Corporate Services confirmed that the Council would use its own sources of funding (for example, reserves) for borrowing rather than borrow funds externally, when this was possible. He explained that the Council had borrowed some funds at the beginning of the Covid 19 pandemic for cash flow purposes given the uncertainty at the time regarding how the Government might provide financial support to local authorities.

He also explained that with regards to long term borrowing, the Council would no longer take out any more LOBO loans (unless this became an attractive option), such loans would now be sought, in the main, from the PWLB. He referred to the split between long term and short term loans, stating that the aim was to keep a short term cash flow of £10m with £25m available in borrowing and he also explained that the purchase of the Pentagon Centre had been financed by a number of long term loans.

In response to a question as to whether the Council had needed to borrow £45m at the beginning of the Covid 19 pandemic, and the implications arising from this decision, the Head of Finance Strategy advised that this figure related to two sums of funding which had been conflated back in March 2020 when the Council had acted to ensure businesses and local residents could be supported and cited examples of suppliers being paid on immediate terms and care places being provided to facilitate the transfer of patients from hospital in accordance with the Government’s announcements  ...  view the full minutes text for item 582.

This report provides Members with an update on the work, outputs and performance of the Audit & Counter Fraud Team for the period 1 September to 30 November 2020.

Discussion:

This report provided details of an update on the work, outputs and performance of the Audit and Counter Fraud Team for the period 1 September to 30 November 2020.

The Head of Audit and Counter Fraud Shared Service referred to the loss of 111 days resource owing to over running reviews, sickness and the need to redeploy team members to assist with the administration of Covid 19 grant schemes. This had necessitated changes to the agreed Plan. He advised that the final outstanding review from 2019 had now been finalised. He referred to the key performance indicators for the team which reflected steady progress. He also advised on a number of matters relating to the work of the team, including counter fraud activity in association with the Cabinet Office and an update on outstanding recommendations noting that the two recommendations set out on page 130 of the agenda had been implemented subject to evidence verifying this.

Parkwood Schools Federation – in response to a question relating to the outcome of this audit review, The Head of Audit and Counter Fraud Shared Service advised that whilst the full report was not available in the public domain, this report was shared with the Assistant Director, Education and relevant Service Managers and they would share any feedback and points of learning with schools.

Shared Service – in response to a question regarding the Gravesham Borough Council element of the Shared Service, the Head of Audit and Counter Fraud Shared Service explained that the agreement stated that 64% of the resource was available to Medway and 36% to Gravesham. Any reduction in resource, such as sickness, would be shared between the two Councils proportionately. In this instance, 60 days have been agreed within Medway’s resource to be provided to help respond to the pandemic. He confirmed that planning for 2021/22 was ongoing. It was clarified that 51 days had been lost to sickness and over running reviews.

Outstanding recommendations (over 6 months) – in response to a question the Head of Audit and Counter Fraud Shared Service explained that any outstanding recommendations were chased on a monthly basis and an update report was considered by the Corporate Management Team on a quarterly basis, where the relevant service areas would be held to account.

Normal service – in response to a question the Head of Audit and Counter Fraud Shared Service explained that the Service was carrying out normal activities, however, 60 days of resource had been provided to the Economic Development team to assist with processing applications for discretionary grants and within that provision there would be peaks and troughs which allowed the Service to carry out audit work when possible. However, the Service would continue to provide assistance in response to the pandemic.

Decision:

a)    The Committee noted the outputs and performance of the Audit & Counter Fraud Service for Medway for the period 1 September to 30 November 2020as detailed at Appendix 1 to the report.

b)    The Committee noted the amendments  ...  view the full minutes text for item 583.

This report presents the Audit & Counter Fraud Charter for Members’ approval.

Discussion:

This report provided details of the Audit and Counter Fraud Charter as required by the Public Sector Internal Audit Standards.

Decision:

The Committee approved the Charter as set out at Appendix 1 to the report.

This report presents a review of the Quality Assurance and Improvement Programme.

Discussion:

This report provided details of a review of the Quality Assurance and Improvement Programme.

The Head of Audit and Counter Fraud Shared Service explained the rationale for changing the target for performance measure PM9 from 90% to 85% in the context of providing a more realistic target.

Decision:

The Committee approved the amended Quality Assurance and Improvement Programme, as set out at Appendix 1 to the report.

In accordance with the Council’s Risk Management Strategy, this report presents the annual review of the Risk Strategy.

This item has been added to the agenda, because the Chairman of the Committee is of the opinion that it should be considered at this meeting as a matter of urgency as permitted under section 100B of the Local Government Act 1972. This is to enable the Committee to consider a report on the review of the Risk Strategy before it is reported to the Business Support Overview and Scrutiny Committee on 28 January 2021 and the Cabinet on 2 February 2021 (the next meeting of this Committee will not take place until 18 March 2021). The report was not available in time for despatch with the main agenda owing to an administrative error.

Discussion:

This report provided details of the Council’s Risk Management Strategy which the Committee was required to review annually.

The Head of Finance Strategy advised the Committee of the internal review process for this Strategy.

Members then raised a number of questions and comments which included:

Service responsibility – in response to a question, the Head of Finance Strategy confirmed that responsibility for the Strategy sat with the Chief Finance Officer.

Presentation – in response to a question regarding some of the presentational aspects of the Strategy, the Head of Finance Strategy confirmed she would take steps to improve the presentation and accessibility of the document.

Risk matrix – in response to a question as to how decisions had been made on the risk ratings within the risk matrix (page 12 of Supplementary Agenda No.1), the Head of Finance Strategy confirmed that this could be revisited next year and that there were many different ways to develop a risk matrix. She undertook to ensure that Member would be involved in such discussions.

Decision:

The Committee noted the 2021/22 Risk Management Strategy at Appendix 1 to the report as setting out the Council’s approach to risk management.