Agenda and minutes

To receive any apologies for absence.

Apologies were received from Councillor Keith House. Councillor Adrian Collett was in attendance as the Liberal Democrat substitute.

All Members who believe they have a Disclosable Pecuniary Interest in any matter to be considered at the meeting must declare that interest and, having regard to Part 3 Paragraph 1.5 of the County Council's Members’ Code of Conduct, leave the meeting while the matter is discussed, save for exercising any right to speak in accordance with Paragraph 1.6 of the Code.  Furthermore all Members with a Personal Interest in a matter being considered at the meeting should consider, having regard to Part 5, Paragraph 4 of the Code, whether such interest should be declared, and having regard to Part 5, Paragraph 5 of the Code, consider whether it is appropriate to leave the meeting while the matter is discussed, save for exercising any right to speak in accordance with the Code.

Members were mindful that where they believed they had a Disclosable Pecuniary Interest in any matter considered at the meeting they must declare that interest at the time of the relevant debate and, having regard to the circumstances described in Part 3, Paragraph 1.5 of the County Council's Members' Code of Conduct, leave the meeting while the matter was discussed, save for exercising any right to speak in accordance with Paragraph 1.6 of the Code. Furthermore Members were mindful that where they believed they had a Personal Interest in a matter being considered at the meeting they considered whether such interest should be declared, and having regard to Part 5, Paragraph 5 of the Code, considered whether it was appropriate to leave the meeting whilst the matter was discussed, save for exercising any right to speak in accordance with the Code.

No declarations were made.

To confirm the minutes of the previous meeting.

The minutes of the meeting held on 24 May 2024 were agreed as a correct record and signed by the Chairman.

Cllr Ryan Brent joined the meeting at this point.

To receive any announcements the Chairman may wish to make.

The Chairman noted that announcements would be deferred to item 12 on the agenda.

Under item 12 the Chairman provided an update on training arrangements for 2024/25 for Members of the Committee, in accordance with the CIPFA Audit Committee Guidance, which was updated in 2022.

To receive any deputations notified under Standing Order 12.

No deputations were received by the Committee on this occasion.

To receive the quarterly update on the County Council’s use of regulated investigatory powers.

The Committee received a quarterly update on the County Council’s use of regulated investigatory powers. Following discussion at the previous meeting, it was noted that additional narrative had been added to the regular report, which Members noted provided greater contextual information.

In response to Members questions it was heard that the time taken to conduct investigations had increased, both locally and nationally, due to the nature of digital forensics and the number of digital devices confiscated in relation to alleged offences.

During last quarter there had been two further applications for communication data, in relation to the ongoing fraud matter previously reported to the Committee.

RESOLVED:

That the Audit Committee receives and notes the data/narrative regarding the County Council’s use of surveillance powers as attached.

To receive a report from the Deputy Chief Executive and Director of Corporate Operations providing an update on the performance of the treasury management function during 2023/24.

The Committee received a report from the Deputy Chief Executive and Director of Corporate Operations providing an update on the performance of the treasury management function during 2023/24.

It was noted that all treasury management activity across the year had met with the agreed treasury management strategy and legislative requirements. It was further observed that the use of internal borrowing had generated cost savings, and that external borrowing had reduced by £28m in the 12 months to 31 March 2024.

Members heard that Hampshire County Council had continued its approach to invest in high quality investments, which had delivered greater return than achieved by comparable local authorities with a lower risk profile.

In response to Members questions it was heard that:

·         No new external borrowing had been taken out within the last 10 years and that any borrowing which was maturing was being repaid to generate savings. Officers, in consultation with Arlingclose, also sought to identify any opportunities for early repayment of existing borrowing, where there wouldn’t be an additional premium for doing so.

·         Cash and cash equivalent were, under the County Council’s accounting policy, funds which were held on an instant access basis including cash held in bank accounts and money market funds, as well as investments which were due to mature the following working day.

RESOLVED:

That the Audit Committee notes the report that was presented to Cabinet.

To consider a report from the Deputy Chief Executive, and Director of Corporate Operations providing the Chief Internal Auditors opinion on the adequacy and effectiveness of the Council’s framework of risk management, internal control and governance for the year ending 31 March 2024.

Members considered a report from the Deputy Chief Executive, and Director of Corporate Operations providing the Chief Internal Auditors opinion on the adequacy and effectiveness of the Council’s framework of risk management, internal control and governance for the year ending 31 March 2024.

It was heard that the auditors continued to provide reasonable assurance over the risk management, control and governance in place at the County Council with audit activity focussing on any identified areas of risk.

It was noted that there were eight limited opinions given for 2023/24, a reduction from the previous year, and was considered a positive reflection of the engagement of management across the County Council with the internal auditors.

In response to Members questions it was heard that whilst there was a positive relationship with officers and management across the Council, internal auditors ensured that they maintained their independence with robust safeguarding principles in place to protect this, as noted within the Internal Audit Charter previously reported to the Committee.

In relation to the limited assurance opinions, it was heard that management actions were agreed and subject to ongoing review, with progress reported to the Audit Committee throughout the year with oversight and monitoring by Department Management Teams and the Corporate Management Team.

Following the significant number of changes to the corporate structure and management at the County Council in recent years, Members questioned how the impact of these changes were affecting the Council’s risk profile and performance. It was heard that work was currently being undertaken to develop assurance frameworks for the Council, which would be regularly monitored by the Corporate Management Team, along with identifying and addressing any issues arising. In addition to these measures, as part of the planning process, internal audit would seek to identify other sources of assurance from external assessments and inspections, such as the recent Outstanding rating from the OFSTED report on Children’s Services.

It was observed that completion of the audit plan had been achieved at 80%, against a target of 95%. It was heard that this was as a result of the annual internal audit report for 2022/23 being reported in in September 2023, meaning that the outcomes in the 2023/24 internal audit report are therefore effectively reflective of a 10-month period, rather than 12-month period.

It was heard that there was a 28% response rate to the surveys noted within the report, with 215 responses received from 772 surveys issued. 

In response to Members questions it was heard that Hampshire County Council were predominately self-insured, due to the size of the organisation, with no draw being required from the insurance fund as a result of internal audit activity during the year.

RESOLVED:

That the Audit Committee receives and considers the Annual Internal Audit Report & Opinion 2023-24 as attached

To receive a report from the Deputy Chief Executive, and Director of Corporate Operations providing an overview of the Internal Audit Plan 2024 – 2025.

The Committee received a report from the Deputy Chief Executive, and Director of Corporate Operations providing an overview of the Internal Audit Plan 2024 – 2025.

It was heard that the corporate risk registers were used to inform and shape the internal audit plan, along with an assessment of business-as-usual risk, to identify the ability of each directorate to manage and protect against potential risk and assess the current control measures in place. It was heard that the plan was flexible, with opportunity to amend activity across the year to meet with business requirements. It was noted that any changes to planned activity would be reported to the Audit Committee through its regular update reports.

In response to Members’ questions it was heard that the proposed Savings Programme for 2025 had been taken into account in planning discussions for 2024-25.  

It was noted that the plan was being presented later than planned, with an intention to present it to the Audit Committee at the start of the year in future years.

It was heard that the audit partnership had a counter fraud unit, who shared common risks and issues with partners through bulletins and advisory notes. Instances of fraud were low, but this was closely monitored by internal audit, particularly in light of the inherent risks of technological advancements.

In response to Members questions it was heard that internal audit remit covered the County Council’s framework only, without the ability to form an opinion on other organisations, however it was noted that partnership arrangements were audited with respect to Hampshire County Council’s role and contribution within those arrangements. 

RESOLVED:

That the Audit Committee approve the Internal Audit Plan 2024-25 as attached.

To consider a report of the Director of People and Organisation and Director of Corporate Operations, seeking the Audit Committee’s approval of the Annual Governance Statement for 2023-24.

The Committee considered a report of the Director of People and Organisation and Director of Corporate Operations, seeking the Audit Committee’s approval of the Annual Governance Statement for 2023-24.

It was heard that a robust process was undertaken in developing the annual statement, with information and assurances sought from directors across the organisation.

In response to Members questions it was heard that the impacts of climate and environmental changes were considered in both the corporate risk register and the development of the annual governance statement.

In reply to Members suggestions, it was agreed that in respect of future governance statements changes from the previous year’s statement would be highlighted to Members for clarity.

RESOLVED:

That the Audit Committee approve the 2023-24 Annual Governance Statement.

To receive the public minutes of the Hampshire Pension Fund Panel and Board meeting held on 28 March 2024.

The Committee received and noted the public minutes of the Hampshire Pension Fund and Board meeting held on 28 March 2024.

To resolve that the public be excluded from the meeting during the following item of business, as it is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during this item there would be disclosure to them of exempt information within Paragraphs 3 of Part 1 of Schedule 12A to the Local Government Act 1972, and further that in all the circumstances of the cases, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, for the reasons set out in the exempt minutes.

The press and public were excluded from the meeting during the following items of business, as it was likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during these items there would have been disclosure to them of exempt information within Paragraph 3 of Part I Schedule 12A to the Local Government Act 1972, and further that in all the circumstances of the case, the public interest in maintaining the exemption outweighed the public interest in disclosing the information, for the reasons set out in the minutes.

To receive the exempt minutes of the Hampshire Pension Fund Panel and Board meeting held on 28 March 2024.

The Committee received and noted the exempt minutes of the Hampshire Pension Fund and Board meeting held on 28 March 2024.