Members Code of Conduct – Part 4A of the Constitution)

To receive disclosures of interests from members and co-opted members on matters to be considered at the meeting. The disclosure must include the nature of the interest.

An interest must also be disclosed in the meeting when it becomes apparent to the member during the meeting.

Notes:

(1)      Members must consider their interests, and act according to the following:

(2)      Disclosable pecuniary interests relate to the Member concerned or their spouse/partner.

(3)      Members in arrears of Council Tax by more than two months must not vote in decisions on, or which might affect, budget calculations, and must disclose at the meeting that this restriction applies to them.  A failure to comply with these requirements is a criminal offence under section 106 of the Local Government Finance Act 1992. 

(4)      Officers must disclose interests in accordance with Council Standing Order 44.

No disclosures of interest in matters under consideration were received.

Recommended –

That the minutes of the meeting held on 21 September 2023 be signed as a correct record.

(Kav Amrez – 07929 070288)

Resolved –

That the minutes of the meeting held on 21 September 2023 be signed as a correct record.

(Access to Information Procedure Rules – Part 3B of the Constitution)

Reports and background papers for agenda items may be inspected by contacting the person shown after each agenda item.  Certain reports and background papers may be restricted. 

Any request to remove the restriction on a report or background paper should be made to the relevant Strategic Director or Assistant Director whose name is shown on the front page of the report. 

If that request is refused, there is a right of appeal to this meeting. 

Please contact the officer shown below in advance of the meeting if you wish to appeal. 

(Kav Amrez – 07929 070288)

There were no appeals submitted by the public to review decisions to restrict documents.

The External Auditor will present Document “V” which sets out the progress for the external audit of the City of Bradford Metropolitan District Council for the Financial Year 2022-23.

Recommended-

That the report (Document “V”) be noted.

                                               (Abi Medic – 07881283644)

The External Auditor presented Document “V” which set out the progress for the external audit of the City of Bradford Metropolitan District Council for the Financial Year 2022-23.

The External Auditor reported that the Council had made a decision to apply its change in its Minimum Revenue Provision (MRP) policy retrospectively to 2021/22 and reduce its MRP charged to the General Fund in 2021/22 by £24.193m. The Council obtained Kings Counsel (KC) advice on the lawfulness of this decision. Mazars have obtained their own KC advice and were considering the audit response to the Council’s decision. Mazars were unable to complete the 2021/22 financial statements audit and provide their signed audit report until this matter was resolved. The External Auditors would discuss with Council officers and would report progress to subsequent Governance and Audit Committee meetings.

The External Auditor reported that Mazars had commenced their audit fieldwork on the 2022/23 financial statements at the start of November. They were aiming to complete their audit work in relation to the 2022/23 audit by the end of March 2024. The timetable included more flexibility, they were conscious that this period was when the Council would be producing and finalising its 2024/25 budget, and the finance team’s time available to support the audit may be more limited.

A member of the Committee was keen to understand the need to consult two Kings Counsel’s regarding Minimum Revenue Provision (MPR) which provided two different outcomes, and asked if a third opinion would be required, as this would mean added costs to the public purse.

In response to this, the External Auditor reported that Mazars had sought its own KC as part of its consideration of the Council’s compliance with laws and regulations. Mazars had to seek its own legal advice as part of its external audit. The External Auditor confirmed that they were very conscious of the costs of the public purse and would always try and minimise the impact of the audit on the Council’s expenditure. The External Auditor confirmed they were determining the impact of their KC advice, which was on certain key points contrary to the Council’s KC.  The External Auditor confirmed that it was unlikely that a third KC opinion would be required.

The Director of Finance and IT was concerned that there was no clarity at the moment regarding the timeline for the completion of the external audit 2021/22. The Director of Finance and IT stressed that this was a very urgent situation that went beyond setting future budgets and highlighted that one of the comments from the KC was the application of the guidelines which was such that the Council may have departed from that without due cause, the Council’s KC had said that the Council did have good cause and had approved the rationale for having due cause.

In response to this, the External Auditor was clear of the need for a prompt resolution and recognised the urgency of the matter, however they did not have a date  ...  view the full minutes text for item 100.

The Director of Finance and IT will submit Document “W” which monitors the progress made by Internal Audit against the Internal Audit Plan for 2023/24 as at 30 September 2023.

The purpose of the report is to bring to the attention of members of the Governance and Audit Committee any significant issues arising from the audit work undertaken to date and to inform them about the progress made up to 30 September 2023, against the Internal Audit Plan, which was approved by the Committee on 15 June 2023.

Recommended –

(1) That the anticipated coverage and changes of Internal Audit work during the year as outlined in Document “W” be endorsed.

(2) That Internal Audit be requested to monitor the control environment, risk management and governance arrangements and continues to assess areas of control weakness and the ability of management to deliver improvements to the control environment when required.

                                                                    (Mark St Romaine – 01274 432888)

The Director of Finance and IT submitted Document “W” which monitored the progress made by Internal Audit against the Internal Audit Plan for 2023/24 as at 30 September 2023.

The purpose of the report was to bring to the attention of members of the Governance and Audit Committee any significant issues arising from the audit work undertaken to date and to inform them about the progress made up to 30 September 2023, against the Internal Audit Plan, which was approved by the Committee on 15 June 2023.

The Head of Internal Audit was present and at the request of the Chair, gave a synopsis of the report. It was reported that as at 30 September 2023, 45% of the 2023/24 audit plan had been completed, which was the same as the 2022/23 position, where 45% of the 2022/23 audit plan was completed as at 30 September 2022.

It was reported that from the work currently completed, Internal Audit had no evidence to indicate that the Council’s internal control framework, risk management and governance processes was not effective.  The Head of Internal Audit expected to be in a position to give an Internal Audit Opinion by the end of the financial year dependent on future events and planned activity.  However, this required the current level of resources identified and service departments to facilitate the audit process. However, it must be noted that the Council’s Annual Governance Statement 2022/23, raised two specific issues in relation to the Childrens Trust and the Capital of Culture 2025.  At the present time Bradford Council’s Internal Audit Service had no agreed access to these organisations with both carrying a significant inherent financial risk for the Council.

Members asked what auditing process was in place for Children’s Services, Children’s Trust, and Capital of Culture, given the critical financial position of the Council. In response, it was reported that there had been some concerns with the lack of internal audit coverage around the financial controls around the Children’s Trust, but the Trust was now out to tender for an external party to provide internal audit services to them at some cost. This matter was being debated with the Trust as this service could be provided to them internally. It was reported that the Trust was now in month 8/9 and there was still no report providing any detail on audit coverage.

Members sought clarification on the tables on key governance issues on page 33 of the report (Document “W”).

Members of the Committee sought further clarification on the Children’s Trust’s audit position for the current financial year. Members of the Committee also suggested that having checks in place to ensure that recommendations were being implemented within the Trust would be helpful.

In response to this, it was reported that there was a strong contract in place between the Council and the Children’s Trust. If the Council was not satisfied with the performance or with the data provided, there were constructive and effective mechanisms in place to manage the  ...  view the full minutes text for item 101.

The Director of Finance and IT will submit Document “X” which reports on the Councils Treasury Management Mid-Year Review.

The mid-year report has been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covers the following:

• An economic update for the first six months of the 2023-24 financial year.
• A review of the Treasury Management Strategy Statement and Annual Investment Strategy.
• The Council’s capital expenditure, as set out in the Capital Strategy, and prudential indicators.
• A review of the Council’s investment portfolio for 2023-24.
• A review of the Council’s borrowing strategy for 2023-24.
• A review of compliance with Treasury and Prudential Limits for 2023-24.

.

Recommended -

That the details in Sections 2 and 3 of Document “X” be noted and the report be referred to the 12 December 2023 Council meeting for adoption.

                                                              (Colin Standish - (01274) 43 2361)

The Director of Finance and IT submitted Document “X” which reported on the Councils Treasury Management Mid-Year Review.

The mid-year report had been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covered the following:

·    An economic update for the first six months of the 2023-24 financial year.

·    A review of the Treasury Management Strategy Statement and Annual Investment Strategy.

·    The Council’s capital expenditure, as set out in the Capital Strategy, and prudential indicators.

·    A review of the Council’s investment portfolio for 2023-24.

·    A review of the Council’s borrowing strategy for 2023-24.

·    A review of compliance with Treasury and Prudential Limits for 2023-24.

The Investment Officer was in attendance and at the request of the Chair, introduced the report to the committee and briefly highlighted the above points.

Resolved –

That the details in Sections 2 and 3 of Document “X” be noted and the report be referred to the 12 December 2023 Council meeting for adoption.

To be actioned by: Director of Legal and Governance

The role of the Pension Board, as defined by sections 5(1) and (2) of the Public Service Pensions Act 2013 is to assist the Council as Scheme Manager in ensuring the effective and efficient governance and administration of the Local Government Pension Scheme.

The Director of West Yorkshire Pension Fund will submit Document “Y” which reports on the minutes of the WYPF Pension Board meeting held on 13 September 2023.

Recommended -

That the minutes of the West Yorkshire Pension Fund Pension Board meeting held on 13 September 2023 be considered and noted.

                                                                                    (Yunus Gajra – 07582105760)

The role of the Pension Board, as defined by sections 5(1) and (2) of the Public Service Pensions Act 2013 is to assist the Council as Scheme Manager in ensuring the effective and efficient governance and administration of the Local Government Pension Scheme.

The Director of West Yorkshire Pension Fund submitted Document “Y” which reported on the minutes of the WYPF Pension Board meeting held on 13 September 2023.

The Chair of the committee suggested that Governance and Audit committee would benefit from a generic training around West Yorkshire Pension Fund to gain a better understanding of matters.

Members of the Committee were keen to understand the impact of Employer

Exit Strategy. In response to this, it was reported that due to the high interest rates this has presented employers with issues. The Council changed its methodology just before the big change in the interest rate took place, reason being, the Council thought it was being too prudent towards the employers and the hurdle was too high. The Council had modified the methodology slightly which was out for consultation with the employers to try and align it with LGPS and the private sector.  

Resolved –

That the minutes of the West Yorkshire Pension Fund Pension Board meeting held on 13 September 2023 be considered and noted.

LEAD: Managing Director, West Yorkshire Pension Fund (WYPF)

The External Auditor will present Document “Z” which reports on the Audit Follow up letter. The report outlines further audit work and progress made in concluding the 2021/22 audit.

Recommended –

That the contents of the Audit Follow up letter detailed in Document “Z” be noted.

                                                                         (Abi Medic - 07881 283644)

The External Auditor presented Document “Z” which reported on the Audit Follow up letter. The report outlined further audit work and progress made in concluding the 2021/22 audit.

It was reported that the follow up letter briefly outlined the audit area that was still outstanding and an update on the conclusions in relations to those audit areas. As stated in the report, majority of the audit works had been completed with no impacts at all and no changes, there were two items that were open and had resulted in an amendment to the accounts. The first item, which was in relation to level 3 investments, in the audit completion report that was issued, it included a table of unadjusted and adjusted misstatements, and this was based on management changing some investment values that they had identified themselves in addition to the ones that the external auditors had identified in their audit process. However, subsequently management decided not to change those investments they had identified so now there was split between the adjusted and unadjusted misstatement changes.

The officer reported that the appendix with the letter in the report provided details of what to expect in the audit completion report and what the current position was. The values had not changed but there was a split between how much was actually adjusted through the accounts and how much wasn’t adjusted through the accounts. In addition to that, in relation to the accounts, because the accounts were still open, note 2 and 12 of the Pension Funds Financial Statements were updated to reflect the outcome of 31 March 2022 evaluation, these two notes were just disclosures notes and just a statement from the actuary, and that statement remained constant over the 3 years period but because the 2022 valuation had been released by Pension Funds has gone back and updated that disclosure to match the valuation outcome.

It was reported that an error was identified in the report, note 15 in relation to investment income, there was an incomplete sentence, which should have read, there had been a change in the classification of the income against classic types and there had been no change in the income overall.

It was further reported that for one Councillor that had been a member of the Joint Advisory Group, the external auditors were unable to see a copy of their declaration of interest form, the Councillor was not a Bradford Councillor and had lost his seat in the May 2022 elections. The external auditors were also unable to obtain up to date declaration forms for two Councillors that were members of the Governance and Audit Committee. Therefore, there was a recommendation as a result of this, that Pension Funds obtain declaration forms for all active members who were sitting on the Joint Advisory Group.

Resolved –

That the contents of the Audit Follow up letter as detailed in Document “Z” be noted.

LEAD: External Auditors, Mazars

The External Auditor will submit Document “AA” which reports on the findings from their work on the West Yorkshire Pension Fund’s Financial Statements.

Recommended –

That the report (Document “AA”) be noted.

                                                                                (Abi Medic - 07881 283644)

The External Auditor submitted Document “AA” which reported on the findings from their work on the West Yorkshire Pension Fund’s Financial Statements.

At the invitation of the Chair, the Audit Manager was once again asked to introduce the report to the committee.

It was reported that there were no significant updates to draw attention to and a few points from the report were highlighted.

Members of the committee were keen to understand to what extent external auditors would investigate an error in a sample as there were no recommendations mentioned in the report. In response to this, it was noted that auditors would continue to investigate until they were satisfied or ask Pension Funds to carry out further testing if the impact of it was going to be material, concept of materiality was key to this.

Resolved –

That the report (Document “AA”) be noted.

LEAD: External Auditors, Mazars

Recommended –

That the public be excluded from the meeting during the consideration of the item relating to the minutes of the West Yorkshire Pension Fund Investment Advisory Panel meeting held on 26 October 2023, because the information to be considered is exempt information within paragraph 3 (Financial or Business Affairs) of Schedule 12A of the Local Government Act 1972.  It is also considered that it is in the public interest to exclude public access to this item.

The Council’s Financial Regulations require the minutes of meetings of the WYPF be submitted to this Committee.

In accordance with this requirement, the Director of West Yorkshire Pension Fund will submit Not for Publication “Document AB” which reports on the minutes of the meeting of the WYPF Investment Advisory Panel held on 26 October 2023.

Recommended –

That the minutes of the West Yorkshire Pension Fund Investment Advisory Panel held on 26 October 2023 be considered.

(Euan Miller – 01274 434517)

The Council’s Financial Regulations require the minutes of meetings of the WYPF be submitted to this Committee.

In accordance with this requirement, the Director of West Yorkshire Pension Fund submitted Not for Publication “Document AB” which reported on the minutes of the meeting of the WYPF Investment Advisory Panel held on 26 October 2023.

Resolved –

That the recommendation contained in Not For Publication Document “AB” be approved.

LEAD: Managing Director, West Yorkshire Pension Fund