Scottish Borders Council

Agenda and minutes

Venue: Via MS Teams

Contact: Judith Turnbull, Democratic Services Officer  Tel: 01835 826556 Email:  jturnbull@scotborders.gov.uk

Link: Teams Live Event

Items
No. Item

1.

Welcome and Introductions

Minutes:

The Chairman opened the meeting and welcomed members of the Audit and Scrutiny Committee and members of the public to the Scottish Borders Council’s open on-line meeting.  The meeting was being held remotely in order to adhere to guidance on public meetings and social distancing currently in place, due to Covid-19 pandemic

 

AUDIT BUSINESS

2.

Minute. pdf icon PDF 113 KB

Minute of Meeting of the Audit and Scrutiny Committee held on 28 September 2020 to be approved and signed by the Chairman. (Copy attached.)

Minutes:

There had been circulated copies of the Minute of 28 September 2020.   With reference to paragraph 5 and 6 of the Minute, it was noted that the presentations on Customer and Communities Risk Management and Best Value Audit Action Plan had been circulated to members of the Committee.  

 

DECISION

APPROVED for signature by the Chairman.

3.

Action Tracker. pdf icon PDF 73 KB

To note progress made on the Action Tracker. (Copy attached).

Minutes:

 

 

 

There had been circulated copies of the Action Tracker for the Audit and Scrutiny      Committee.  The Chief Officer Audit and Risk, advised that there were a number of completed Actions. The Action Tracker captured the key decisions raised at the 28 September 2020 meeting, outstanding actions and status. 

 

DECISION

NOTED the Action Tracker.

 

4.

External Audit Annual Report 2019/20 for Scottish Borders Council Pension Fund

Minutes:

With reference to paragraph 4.4 of the Minute of 23 September 2019, there had been circulated copies of a report by Audit Scotland in respect of Scottish Borders Council Pension Fund.  Mrs Woolman, Audit Scotland, presented the report, highlighting that exceptionally this year, the report included an ‘Emphasis of Matter’ paragraph which related to the uncertainties caused by Covid-19 on property investment portfolio valuations.  This was a generic issue across all private and public pension funds.  In response to questions, Mr Samson advised that with regard to the £0.94m unadjusted error, this was because not all of Fund managers’ valuations of illiquid assets had been received on time.  This ‘timing issue’ might be ongoing each year with some investments.   As the amount was less than the materiality level, the accounts were not required to be adjusted.   With regard to financial sustainability, Mr Robertson explained that cash flow was monitored on an ongoing basis and the Strategic Asset Allocation was amended, as necessary, to reflect future cash flow requirements.   The Pension Fund was well-diversified to protect against a range of uncertainties, the Fund now had £818m of assets under management, a rise from £712m at the end of March.  Mr Robertson further advised that overseas pensioners were required to provide a Life Certificate for continuation of their pension payments.   UK pensioners were not required to provide a certificate as Registrars’ death notifications were used to check eligibility.   Regarding the proposed self-service facility, Mr Robertson confirmed that telephone contact would be retained for enquiries. 

 

DECISION

NOTED Scottish Borders Council Pension Fund Annual Report 2019/20 from the Council’s External Auditor.

 

5.

Final Pension Fund Annual Report and Accounts 2019/20 pdf icon PDF 122 KB

Consider the audited annual report and accounts 2019/20 of the Pension Fund reviewed by Pension Fund Joint Committee and Board prior to Council approval. (Copy attached)

 

Additional documents:

Minutes:

There had been circulated copies of a report by Executive Director Finance and Regulatory.  The report provided the Audit and Scrutiny Committee with an opportunity to scrutinise the final Account Report and Accounts for the Pension Fund for 2019/20 prior to their submission to Scottish Borders Council for signature.  The Local Government Pension Scheme Amendment (Scotland) Regulations 2010 specified the elements which must be contained in the Annual Report and Accounts, contained in Appendix 1 to the report.  Audit Scotland had now completed their audit and had given an unqualified audit opinion.  They had identified two new recommendations and three recommendations from 2018/19 requiring action and these had been accepted by Management and would be enacted within the agreed timescales.   The Annual Report had also been presented to members of the Pension Fund Committee and Pension Board for approval prior to Scottish Borders Council for signature.   With regard to the complexity of regulatory changes, Mr Robertson explained that officers regularly attended and engaged in pension training events to ensure the Fund complied with all requirements.  Mrs Stacey added that the internal audit opinion concluded that risk management was firmly embedded in the decision making process.  

 

DECISION

NOTED the Scottish Borders Council Pension Fund Annual Report and Accounts for 2019/20. 

 

 

6.

External Auditors' Annual Audit Reports 2019/20. pdf icon PDF 761 KB

Consider the Annual Audit Reports from the External Auditor on various entities for review and scrutiny prior to Council approval.   (Copies attached).

Additional documents:

Minutes:

With reference to paragraph 4.1 of the Minute of 23 September 2019 there had been circulated copies of covering letters and a report by Audit Scotland, the Council’s external auditors.   The report explained that Audit Scotland had now completed the audit of the Council’s Annual Accounts for 2019/20 and had given an unqualified audit opinion in all cases.  Mrs Woolman and Mr Samson from Audit Scotland summarised the report.  Mrs Woolman advised that the financial statement gave a true and fair view and included, exceptionally, an ‘Emphasis of Matter’ paragraph for Common Good Funds and the Ormiston Trust for Institute because of the uncertainties caused by Covid-19 on property valuations.   There were no unadjusted misstatements or material weaknesses in the accounting and internal control systems identified during the audit.  The Committee confirmed that they knew of no issues or any concerns with regard to fraud or non-compliance.

 

6.2         A number of questions were raised which were answered by officers.   Regarding Education Maintenance Grants, Mr Samson explained that external audit had identified discrepancies over attendance records and payments over the past few years.   Officers had explained that school staff were satisfied pupils were in attendance but attendance records were not always updated accordingly.  The Service Director Customer and Communities, Mrs Craig, added that record management had been reviewed and progressed through Business World. In response to a request by Management, Internal Audit were also reviewing the process, ensuring appropriate controls and monitoring was in place.  An update would be provided at a future meeting.   With regard to the £0.8m health and social care overspend, Mr Robertson acknowledged that this was not sustainable.   The ongoing problem of overspends with respect to the Social Work Budget had the potential to destabilise the Council’s financial planning, was well documented in the Outturn report and Risk Register, and would be the focus of the Corporate Management Team going forward.  Mr Robertson advised that slippage of the capital plan was a common to most other Councils and was currently being reviewed in terms of the impact of Covid-19, to ensure realistic and deliverable projects for 2021/2022.  Regarding Executive Committee’s lack of opposition membership, Mrs Woolman advised that local authorities had different administration models and this comparison would be captured in their 2020/21 Audit report.   Regarding the Community Toolkit, Mrs Woolman agreed to include, as amendment to the draft report, a recommendation for more explicit monitoring going forward.   With regard to payroll creditors, positive reassurance had been received from managers that Business World had improved the system of internal controls.  With regard to the significant increase in gas consumption, Mr Robertson explained that this related to converting existing inefficient oil based systems to gas, and also additional heating costs associated with the opening of new buildings for example the Jedburgh Campus and Kelso High School.  Whenever possible, renewable technology was used to minimise energy consumption within the Council’s estate. Mrs Stacey added that an internal audit of the Council’s decisions in terms of climate change would consider  ...  view the full minutes text for item 6.

7.

Scottish Borders Council Annual Reports and Accounts 2019/20 pdf icon PDF 3 MB

Minutes:

With reference to paragraph 5 of the Minute of 23 September 2019, there had been circulated copies of a report by the Executive Director Finance and Regulatory presenting copies of the Council’s audited Annual Accounts for 2019/20.   The audit appointment of Audit Scotland for Scottish Borders Council accounts included the requirement to provide an auditor’s report for the Council as well as related charities.  KPMG continued to provide the external audit of the Council subsidiary Bridge Homes LLP.  Audit Scotland had now completed the audit of the Council’s Annual Accounts for 2019/20 and given an unqualified audit opinion in all cases.  In addition, Audit Scotland concurred with Management’s accounting treatment and judgements; and had reached positive conclusions in respect of financial sustainability, financial management, governance, transparency and value for money.   Audit Scotland had identified three recommendations for improvement requiring action and these had been accepted by Management and would be enacted within the agreed timescales.   

 

 7.2        As required under the Local Authority Accounts (Scotland) Regulations 2014, the audited Annual Accounts for Scottish Borders Council, SBC Common Good Funds, the SBC Charitable Trusts, Bridge Homes LLP and Lowood Tweedbank Ltd had been presented to the Audit and Scrutiny Committee prior to signature.    The report also referred to KPMG’s external audit of Bridge Homes LLP which had raised no issues, with no matters to report.   In response to questions, Mr Robertson advised that the rise in the number of employees in pay bands £50k to £69k per annum related to senior manager posts and the 2018/19 teacher pay award which had tipped a significant number of teachers over the £50k threshold.

 

DECISION

·                                     AGREED to RECOMMEND the following accounts for officer signature and Council approval:

 

(a)          the Scottish Borders Council’s audited Annual Accounts for the year to 31 March 2020;

 

(b)       the Scottish Borders Council Common Good Funds’ (Charity SC031538)       audited Annual Accounts for the year to 31 March 2020;

 

(c)        the SBC Welfare Trust (Charity SC044765) audited Annual Accounts for the year to 31 March 2020;

 

(d)       the SBC Education Trust (Charity SC044762) audited Annual Accounts for    the year to 31 March 2020;

 

(e)        the SBC Community Enhancement Trust (Charity SC044764) audited Annual Accounts for the year to 31 March 2020;

 

(f)        the SBC Ormiston Trust for Institute Fund (Charity SC019162) audited Annual Accounts for the year to 31 March 2020;

 

(g)       the Scottish Borders Council Charitable Trusts (Charity SC043896) audited Annual Accounts for the year to 31 March 2020;

 

(h)       the Bridge Homes LLP audited Annual Accounts for the year to 31 March 2020;

 

(i)         Lowood Tweedbank Ltd Annual Accounts for the year to 31 March 2020.

 

8.

Annual Assurance Statement 2019/20 to Scottish Housing Regulator. pdf icon PDF 118 KB

Consider report by Service Director Customer and Communities on annual assurance statement 2019/20 in respect of landlord services provided by the Council for submission to the Scottish Housing Regulator. (Copy attached)

 

Additional documents:

Minutes:

With reference to paragraph 8 of the Minute of 25 November 2019, there had been circulated copies of report by the Service Director Customer and Communities requesting consideration and approval of the Annual Assurance Statement 2019/20 in respect of landlord services provided by the Council for submission to the Scottish Housing Regulator.  Homelessness Services Manager, David Kemp, joined Mrs Craig to present the report.  In 2019, the Scottish Housing Regulator (“the Regulator”) revised its regulatory framework.  This placed a new requirement on all social landlords to submit an Annual Assurance Statement to the Regulator by the end of October each year.  Part of the Audit and Scrutiny Committee’s remit was to assess the effectiveness of internal controls, risk management and governance arrangements in place at the Council to achieve its objectives.  Section 8 of the Annual Assurance Statement 2019/20 of the Service Director Customer and Communities at Appendix 1 of the report, was designed to meet this requirement of the Scottish Housing Regulator.  It was the opinion of the Service Director Customer and Communities that, although there were a few areas of work to be completed for full compliance with the revised regulatory framework, the overall arrangements in respect of landlord services provided by the Council were operating satisfactory.  Mrs Craig highlighted the two areas still outstanding:   The gypsy/travellers site at Tweedside Park Innerleithen related to changes to the occupancy agreement between the tenants and Council.   Discussions continued and the Housing Regulator had been kept informed of progress towards meeting the standard.  The other matter to be progressed related to strengthening governance arrangements to involve tenants in scrutinising performance.   It was requested and noted that future reports would contain more detail with regard to actions taken.  A private Members’ briefing would also be arranged to update Ward Councillors on progress with the occupancy agreement for Tweedside Park residents.  

 

DECISION

(a)       to note the details of the Annual Assurance Statement 2019/20 in respect of landlord services provided by the Council, as detailed in Appendix 1, and  the actions identified by management to improve arrangements; and

 

(b)          approve the Annual Assurance Statement 2019/20 for submission to the Scottish Housing Regulator.  

 

 

9.

Internal Audit Work to September 2020. pdf icon PDF 145 KB

Consider a report by Chief Officer Audit & Risk on findings from recent work carried out by Internal Audit, including the recommended audit actions agreed by Management to improve internal controls and governance arrangements, and other work in progress to deliver the approved Internal Audit Annual Plan 2020/21. (Copy attached)

Minutes:

With reference to paragraph 10 of the Minute of 28 September 2020, there had been circulated copies of a report by the Chief Officer Audit and Risk which provided details of the recent work carried out by Internal Audit and the recommended audit actions agreed by Management to improve internal controls and governance arrangements.   The work Internal Audit had carried out during the period 1 to 30 September 2020 was detailed in the report.  During the period a total of five Internal Audit reports had been issued.  There were a total of two recommendations associated with one of the reports (medium risk).  An Executive Summary of the final Internal Audit reports issued, including audit objective, findings, good practice, recommendations (where appropriate) and the Chief Officer Audit and Risk’s independent and objective opinion on the adequacy of the control environment and governance arrangements within each audit area, was included in Appendix 1 to the report.  Mrs Stacey summarised the findings in the report, explaining that some areas of work were in addition to those agreed by Audit and Scrutiny Committee in March 2020.  These related to risks associated with the response to Covid-19, for example, the administration and complexity of issuing Business Support Grants.   In response to questions, Mrs Stacey explained that the Major Contracts Governance Group would review CGI performance on a quarterly basis.  The next meeting was scheduled for 3 November 2020.   With regard to the anomalies identified in the Local Government Benchmarking Framework internal audit report, Mrs Stacey explained that all had been corrected before local government benchmarking information was published across all 32 councils.  Minor challenges related to remote working and discussion with officers had identified improvement actions required.  The Committee congratulated the Internal Audit team for reorganising their priorities and providing assurance that payment of Business Support Grants were appropriately managed.

 

DECISION:

(a)        NOTED:

(i)         the final assurance reports issued in the period from 1 to 30 September 2020 associated with the delivery of the approved Internal Audit Annual Plan 2020/21; and

 

(ii)        the Internal Audit Assurance work in progress and Internal Audit Consultancy and Other Work carried out in accordance with the approved Internal Audit Charter.

 

(a)             ACKNOWLEGED the assurance provided on internal controls and governance arrangements in place for the areas covered by this Internal Audit work.

 

10.

Audit and Scrutiny Committee Annual Report 2019/20 and Annual Self-Evaluation. pdf icon PDF 113 KB

Consider the Audit and Scrutiny Committee Annual Report 2019/20 on their work for the year in fulfilling their Audit remit based on their annual self-evaluation. (Copies attached).

 

Additional documents:

Minutes:

With reference to paragraph 5 of the Minute of 25 June 2019, there had been circulated copies of a report by Chief Officer Audit and Risk, providing members with the Audit and Scrutiny Committee Annual Report 2019/20 which presented performance in relation to its Terms of Reference and effectiveness of the Committee in meeting its purpose.  It was important that the Council’s Audit and Scrutiny Committee fully complied with best practice guidance on Audit Committees to ensure it demonstrated its effectiveness as a scrutiny body as a foundation for sound corporate governance for the Council.   The CIPFA Audit Committees Practical Guidance for Local Authorities and Police 2018 Edition (CIPFA Audit Committees Guidance) included the production of an annual report on the performance of the Audit and Scrutiny Committee against its remit (Audit functions) for submission to the Council.   The Audit and Scrutiny Committee Annual Report 2019/20, Appendix 1 to the report, was presented for consideration.  The Audit and Scrutiny Committee carried out self-assessments of compliance with the Good Practice Principles Checklist and Evaluation of Effectiveness Toolkit from the CIPFA Audit Committees Guidance during the informal session on 9 March 2020 facilitated by the Chief Officer Audit and Risk.   The self-assessments were appended to the report at Appendices 2 and 3 for consideration.  The outcome of the self-assessments was a high degree of performance against the good practice principles and a high degree of effectiveness with areas of further improvement identified. 

 

DECISION

(a)  APPROVED the Audit and Scrutiny Committee Annual Report 2019/20 which incorporated its self-assessments using the CIPFA Audit Committees Guidance; and

 

(b)  AGREED that the Audit and Scrutiny Committee Annual Report 2019/20 be presented to Council and then published on the Council’s website.

 

MEMBER

Mr Middlemiss left the meeting.

 

ADJOURNMENT

The meeting was adjourned at 12.35 pm and reconvened at 1.05 pm.

SCRUTINY BUSINESS

11.

Scottish Welfare Fund and Discretionary Housing Payments pdf icon PDF 230 KB

Consider report by Service Director Customer & Communities providing an overview of the performance of both the Scottish Welfare Fund and Discretionary Housing Payments in the Scottish Borders from 1 April 2019 to 31 August 2020 (copy attached).

Minutes:

There had been circulated copies of a report by the Service Director Customer and Communities providing an overview and summary of the performance of both the Scottish Welfare Fund and Discretionary Housing Payments in the Scottish Borders from 1 April 2019 to 31 August 2020.  Les Grant, Customer Services Manager, joined Mrs Craig to present the report.  The budget provided by the Scottish Government for the Scottish Welfare Fund for 2019/20 was £546,737.   The amount spent during 2019/20 was £541,298.78.  The budget provided for the Scottish Welfare Fund for 2020/21 was initially £587,921.  Following commencement of the current pandemic, this was increased to £952,921.  As at 31 August 2020, Crisis Grants totalling £48,399.32 had been made and a total of £188,031.73 had been awarded in Community Care Grants leaving a balance of £716,488.95 to spend over the remaining seven months.   The Discretionary Housing Payments budget for 2019/20 (not including under-occupancy funding) was £144,095.  A total of £120,639.82 of this budget was spent during 2019/20.  The Discretionary Housing payment budget for 2020/21 (not including under occupancy funding) was £180,177.  However, due to the current pandemic, this was increased to £217,641.  At 31 August 2020, there was a commitment to spend £71,796.71 up to 31 March 2021.   The Scottish Government reimbursed Scottish Local Authorities with 100% Discretionary Housing Payments for applications paid in respect of under occupancy.  In response to a question regarding ‘Failure to provide information’ as a reason for refusing a grant, Mr Grant explained that staff were well versed in obtaining the information required and conversations were usually by telephone.  The ‘Other and No Reason’ category would be extended to allow better understanding of the reasons for refusal.    Mrs Craig advised that performance relating to other local authorities and comparison and with other authorities, including Dumfries and Galloway, would be circulated to Members.  Mrs Craig confirmed that Housing Associations played an important role in engaging with their tenants to encourage uptake of Crisis Grants and Community Care Grants.    Mr Grant further advised that if a Crisis Grant was refused, depending on personal circumstances, the applicant would be directed to appropriate, alternative areas for assistance.   The Chairman thanked Mrs Craig and Mr Grant for their attendance and report which had provided reassurance that this difficult area was being closely and carefully managed and there were no issues for further scrutiny.   The Committee congratulated officers on the improvements in performance.

 

DECISION

NOTED the performance of the Scottish Welfare and Discretionary Housing Payments in the Scottish Borders.

12.

Urgent Business

Minutes:

Under Section 50B(4)(b) of the Local Government (Scotland) Act 1973, the Chairman was of the opinion that the item dealt with in the following paragraph should be considered at the meeting as a matter of urgency, in view of the need to keep Members informed.

13.

Police Community Action Teams Governance pdf icon PDF 125 KB

Consider report by Chief Executive.  (Copy attached.)

Minutes:

With reference to paragraph 14 of the Minute of 28 September 2020, there had been circulated copies of a report by the Chief Executive providing details of the existing governance arrangements for the Police Community Action Teams and options and implications of including the Member/Officer Strategic Oversight Group into the Scheme of Administration.   The report explained that as part of the budget for 2018/19, Scottish Borders Council agreed to fund a Community Action Team (CAT) of police officers for the Scottish Borders.  As the intelligence information being provided to Members of the CAT Strategic Oversight Group by Police Scotland was intrinsic to current police operations, Members of the Oversight Group were required to agree to a confidentiality non-disclosure clause at each meeting.  For this reason, the Oversight Group was a closed group with no other Members included either in the meetings of with access to the papers for each meeting.  Due to the confidential nature of police intelligence provided to the Strategic Oversight Group, it was not possible in its current form for the Strategic Oversight Group to be included in the Scheme of Administration.  An option, detailed in Section 4 of the report suggested possible changes to allow performance management of the CATs through the Executive Committee, with operational tasking of the CATs carried out by a new Member/Officer Reference Group.  It was the view of all involved in the process that the current arrangements with the Strategic Oversight Group seemed to be working well and was successful.  For this reason, the officer recommendation in the report was that no further action was taken.   Following discussion and consideration of alternative ways of working as detailed in section 4 of the report.  The Committee requested that a further report be brought to the next meeting.  The report to include:  details on enhancing transparency and performance monitoring to Executive Committee; and, investigating a mechanism for improving communications between the Oversight Group and the Police, Fire & Rescue and Safer Communities Board.  A workshop could also be considered if required.  

 

         DECISION

(a)   NOTED the alternative ways of working detailed in section 4 of the report.

 

(b)   AGREED that officers bring back a report with details on enhancing reporting to Executive Committee and investigating a mechanism for improving communication between the Oversight Group and Police, Fire and Rescue and Safer Communities Board.

 

 

 

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