Agenda and minutes

To consider any appeals in accordance with Procedure Rule 15.2 of the Access to Information Procedure Rules (in the event of an Appeal the press and public will be excluded).

(*In accordance with Procedure Rule 15.2, written notice of an appeal must be received by the Head of Governance Services at least 24 hours before the meeting)

There were no appeals against the refusal of inspection of documents.

There were no items identified where it was considered necessary to exclude the press or public from the meeting due to the confidential nature of the business to be considered.

There were no late items of business identified.

To disclose or draw attention to any interests in accordance with Leeds City Council’s ‘Councillor Code of Conduct’.

There were no declarations of interest made at the meeting.

To receive apologies for absence (If any)

There were no apologies for absence.

To consider and approve the minutes of the previous meeting held on 25^th June 2021.

(Copy attached)

The minutes of the previous meeting held on 25^th June 2021 were submitted

for comment/ approval.

RESOLVED - That the minutes of the previous meeting held on 25^th June 2021 were accepted as a true and correct record.

To consider any matters arising from the minutes

The Committee received the following up-date on matters previously considered by this Committee:

Public Sector Network Certification (PSN) - Update Report (Minute No.13 referred) - The Data Protection Officer reported that the deadline for submission of a compliant application for PSN certification was 31^st July. Members were informed that the Council’s PSN submission had been sent to the Cabinet Office earlier today,30^th July 2021. Members noted that a response would be received within the next 4 - 8 weeks, any feedback received would be made known to the Committee.

To consider a report by the Head of Procurement and Commercial Services which presents the Annual Report on the Council’s procurement function, and provides assurances that the Council’s arrangements are up to date, fit for purpose, effectively communicated and routinely complied with.

The report requests Members to consider the ongoing work to review the Council’s entire “procure to payment” (the P2P Review) processes in order maintain effective procurement support, including appropriate training and guidance, and efficient systems and processes.

(Report attached)

The Head of Procurement and Commercial Services submitted a report which presented the Annual Report on the Council’s procurement function and provided assurances that the Council’s arrangements were up to date, fit for purpose, effectively communicated and routinely complied with.

The report requested Members to consider the ongoing work to review the Council’s entire

“procure to payment” (the P2P Review) processes in order maintain effective procurement support, including appropriate training and guidance, and efficient systems and processes.

Addressing the report, the Head of Procurement and Commercial Services said the report sought to provide assurance as to the effectiveness of the Council’s procurement arrangements. Members noted:

·  Each Directorate was accountable for the procurements that they need in order to secure the outcomes they are responsible for. Procurement and Commercial Services was accountable for provision of professional support to complex procurement activity.

·  External spend in 2020/21 was £992,465,919 (increased on typical spend levels as a consequence of Covid-related grant funding).

·  A refresh of the Council’s Contract Procedure Rules (CPRs) was implemented in 2020/21, further strengthening procurement controls, incorporating Social Value requirements and changing the evaluation emphasis to provide greater focus on price. CPR training for Council staff continues, including an online interactive tool and guidance document on Insite.

Regarding compliance:

·  There had been no formal procurement challenges in the period to which this report relates

·  On-contract spend remained strong and there was general compliance with procurement policies, with on-contract and compliant expenditure standing at 96.42% for the 2020/21financial year (up from 95.6% in the previous year)

·  The number of waivers of CPRs in 2020/21 was 60 (down from 79 in the previous year).

·  In addition, a “peer review” facilitated by the Local Government (the LGA Peer Review) was expected to confirm that the levels of the Council’s procurement compliance represent an “an outstanding achievement that demonstrates efforts by the council to ensure good governance outstanding achievement” (the final report was yet to be received).

·  A framework for delivering Social Value in all the Council’s procurements was now established, with a Social Value Board, Social Value Guidance for Commissioners, and Social Value support from PACS and Social Value Portal. Work was underway to embed Social Value in all the Council’s procurement activity, and expenditure with local suppliers and SME’s equated to 65.88% of total expenditure in 2020/21 (up from 64.64% in the previous year).

·  The ongoing P2P Review (including the ongoing analysis of progress toward achieving the Procurement Strategy KPIs) would look to further improve the efficiency and effectiveness of the Council’s procurement. In addition, the LGA Peer Review was anticipated to propose that resource should focus on delivering greater strategic value from procurement activity.

Referring to Covid-19, Members asked if the National procurement of Personal Protective Equipment (PPE) had had any impact on the City Council’s ability to precure PPE or if the City Council had obtained PPE from these national contracts.

Members were informed that some dedicated resource was required to oversee procurement of additional  ...  view the full minutes text for item 22.

To consider a report of the Chief Officer Financial Services which presents the Annual Report on the Council’s decision making arrangements and provides assurances that the Council’s arrangements are up to date, fit for purpose, effectively communicated and routinely complied with.

This report forms part of the Council’s review of the effectiveness of its arrangements for Internal Control and will be taken into account in preparing the Annual Governance Statement which the Committee will be asked to approve. The arrangements set out provide a framework for transparent and accountable decision making in accordance with the Council’s Corporate Governance Code and Framework.

(Report attached)

The Chief Officer Financial Services submitted a report which presented the Annual Report on the Council’s decision making arrangements. The report sought to provided assurances that the Council’s arrangements were up to date, fit for purpose, effectively communicated and routinely complied with.

Members noted the report formed part of the Council’s review of the effectiveness of its arrangements for Internal Control and would be taken into account in preparing the Annual Governance Statement which the Committee would be requested to approve.

Members were informed the arrangements provided a framework for transparent and accountable decision making in accordance with the Council’s Corporate Governance Code and Framework.

Referring to the Council’s decision making arrangements. Members queried if decisions were revisited e.g. the review of a policy change which had not had the desired effect, the intention was good, but the change did not work as anticipated.

The Lead Officer suggested that revisiting a decision was more likely to be a scrutiny function, and that the Corporate Governance and Audit Committees role related to assurance in relation to the processes and procedures that were in place.

RESOLVED –

(i)  To note the positive assurances set out in the Decision Making Statement of Internal Control, as indicated in Appendix A of the submitted report

(ii)  To request that performance monitoring in respect of decisions taken under urgency procedures, and subject to call in should be reported quarterly through the Internal Audit update report.

To consider a report by the Chief Officer Financial Services which presents the draft Interim Annual Governance Statement (AGS). The interim AGS is prepared following a review of the effectiveness of the Council’s arrangements for Internal Control and will be published alongside the Statement of Accounts when put on deposit.

The final Annual Governance Statement for 2021 will be returned to the Committee for formal approval prior to in advance of the Committee’s approval of the audited Statement of Accounts.

(Report attached)

The Chief Officer Financial Services submitted a report which presented the draft Interim Annual Governance Statement (AGS). Members noted the interim AGS was prepared following a review of the effectiveness of the Council’s arrangements for Internal Control and would be published alongside the Statement of Accounts when put on deposit.

Members were informed the final Annual Governance Statement for 2021 would be brought back to the Committee for formal approval in advance of the Committee’s approval of the audited Statement of Accounts.

Referring to page 72 of the submitted report and the inclusion of a table to demonstrate the alignment with the CIPFA Good Governance Framework and the City Council’s Corporate Governance Code and Framework, it was suggested that the wording within “Commitment D of the CIPFA Framework” did not translate to that of the LCC – Corporate Governance Code and Framework.

In responding the Lead Officer said the LCC – Corporate Governance Code and Framework was adopted back in 2017, it may be necessary to review the Code and Framework to determine if any adjustments are required.

Referring to page 79 (Paragraph 12.2) of the submitted report and the phrase “Our scrutiny function is well resourced and developed and is afforded parity of esteem with the Executive” – Members requested if any evidence had been provided to support that wording.

The Lead Officer said that assurances for the AGS were taken from enquiries made of Senior Officers with relevant expertise, in conjunction with the Scrutiny Boards Annual Report. Upon further questioning the Lead Officer confirmed that the Scrutiny Board Annual Report is agreed by all Scrutiny Board Chairs.

RESOLVED – To note the draft Interim AGS, noting that it would be published

alongside the Statement of Accounts when put on deposit.

To consider a report by the Chief Officer Financial Services which presents the draft unaudited 2020/21 Statement of Accounts. The Statement of Accounts is included with the agenda as a separate document and is also published on the Council’s internet site with the Committee papers. Details of roles, responsibilities and timescales for approving the statement of accounts are set out in the submitted report.

(Report attached)

The Chief Officer Financial Services submitted a report which presented the draft unaudited 2020/21 Statement of Accounts which would be made available on the Council’s website for public inspection for thirty working days commencing Monday, 2^nd August 2021. Details of the roles, responsibilities and timescales for approving the statement of accounts were set out in the submitted report.

Addressing the report, the Head of Finance explained that the accounts presented the council’s financial position for the year in the format required by accounting standards, incorporating technical transactions relating to non-spendable reserves in addition to the outturn position.

Members were informed that the financial statements reflected the unprecedented impact of the pandemic upon the council’s finances during 2020/21, and the statements showed some significant variances in comparison to previous years, particularly in the balance of funding between local taxation income and government grants.

The Head of Finance Members drew Members attention to the main financial issues arising from the statement of accounts as identified in section 3 of the submitted report.

Members noted that during 2019/20 the Chief Executive received £44.5k in relation to his role as Returning Officer during National and European elections. Members queried whether Returning Officer remuneration was only payable in years when such elections took place.

Members were informed that remuneration for the role of Returning Officer in National and European elections was only paid in the years in which such elections were held.

Commenting on the West Yorkshire Pension Fund, Members noted that the last triennial valuation had taking place since 2019 and asked for confirmation that a triennial valuation was due as at March 2022.

It was confirmed that the next triennial actuarial valuation of the fund would take place as at March 2022. Members were informed that the balance sheet figures were on an accounting basis, representing the value of the fund assets and liabilities as at the balance sheet date, whereas an actuarial valuation of the fund would be on a forward looking basis taking into account expected future earnings from assets.

Reference was made to the costs of compulsory redundancies and other leavers, Members suggesting there was a large increase to that of the previous year.

Members were advised that the difference was mainly due to the numbers of staff leaving under the Early Leavers Initiative (ELI) during the 2021 period.

RESOLVED – To note the unaudited statement of accounts for 2020/21, which had been certified by the Chief Finance Officer.

To consider a report by the Chief Officer Financial Services which presents Grant Thornton’s Annual Audit Plan for their 2020/21 audit, covering the audit of the Council’s accounts and the process for assessing its arrangements to secure value for money in the use of resources.

(Report attached)

The Chief Officer Financial Services submitted a report which presented the External Auditors (Grant Thornton) Annual Audit Plan for their 2020/21 audit, covering the audit of the Council’s accounts and the process for assessing its arrangements to secure value for money in the use of resources.

Addressing the External Auditors report, Gareth Mills (Grant Thornton) spoke on the main issues which included:

·  Adoption of new auditing standards – Estimates

·  Financial Reporting and Audit – raising the quality bar

·  Significant risks including: Management override controls, valuation of land and buildings, valuation of investment properties and valuation of the net pension fund liability (All based on assumptions)

·  Materiality

·  Value for Money arrangements

·  Audit logistics

Referring to the accounting estimates and related disclosures, Members queried if the updated ISA (UK) 540 (revised) would create additional work for Grant Thornton and a subsequent increase in their fee

Mr Mills said that because of the revised financial reporting arrangements the level of work had increased significantly, the new value for money arrangements (VFM) now required a wider range of investigation to a new reporting standard. The Redmond Review had also recommended change.

Members were informed that a Briefing Session for Members of the Committee would be held shortly to provide an opportunity to understand the new requirements and responsibilities associated with the revised ISA (UK) 540 Financial Reporting Arrangements

Referring to the “Audit fees – detailed analysis” Members asked why the audit of “one off” exceptional items during 2019/20 had been treated as a base figure.

In responding Mr Mills said that some further work would be required on these items, and that there was the potential for new major issues to arise, but that the fee was at this stage indicative and could be amended as the audit progressed.

On the issues of expected future changes to standards in relation to materiality and fraud, Members suggested that arrangements should be in place at an early stage, such discussions should not be delayed.

In responding Mr Mills said it was important to have key discussions at an early stage about any new developments.

RESOLVED –

(i)  To receive the Annual Audit Plan presented by Grant Thornton

(ii)  To note and agree the nature and scope of the proposed audit work.

To consider and approve the Committee’s Work Programme for the 2021/ 22 period.

(Copy attached)

The Chief Officer Financial Services submitted a report which set out the

proposed Work Programme for the remainder of 2021/22.

The Lead Officer drew to the Committee’s attention suggested adjustments to the Work Programme to include an additional report from the External Auditors (Grant Thornton) in September, and an additional procurement update report in November 2021.

RESOLVED – That the Work Programme be approved, as set out at Appendix 1 of the submitted report.

To note that the next meeting will take place on Friday, 24^th September 2021 at 2.00pm in the Civic Hall, Leeds.

RESOLVED - To note that the next meeting will take place on Friday, 24th September 2021 at 2.00pm in the Civic Hall, Leeds.