Councillor Railton nominated Councillor Fry. This was seconded and Councillor Fry was elected as chair in a unanimous vote

Councillor Muddiman nominated Councillor Roz Smith. This was seconded and Councillor Smith was elected in a unanimous vote.

None.

Report of: Head of Financial Services

Purpose of Report: To appraise Members of the activity and performance of the Counter Fraud Team for the fiscal year 1 April 2023 to 31 March 2024

Recommendation: That the report be noted.

Rob Ducker, Senior Investigation Officer, introduced the report which provided an overview of the performance of the Counter Fraud Team for the 2023/2024 fiscal year. He highlighted the successes that the team had in counteracting fraudulent behaviour in the housing sector and how these efforts have generated a significant level of income for the council. 

The Senior Investigation Officer also informed the committee of the work that the Counter Fraud Team had undertaken to raise awareness and educate people on best practice. To support these efforts, the Counter Fraud Team held their 8^th annual conference, with over 150 in attendance to help to educate and raise awareness and they further relationships with other authorities. The 9^th annual iteration of this conference is scheduled for November of this year and over 100 delegates are already booked on for this and the national conference, hosted in Birmingham the team attended last year. Rob Ducker stated that they would not be participating in this conference this year, but would be participating in a different national conference regarding fraud investigations.

Fraud Awareness Training was also offered to offered to ODS staff around Fraud Awareness; to recognize and report possibly fraudulent behaviour in properties that they visit. These trainings have increased referrals from ODS and have been viewed to be very successful.

In response to a question from Councillor Ottino, regarding the methods used to identify possibly fraudulent behaviour, it was explained how the team has implemented data from the National Fraud Initiative to identify housing applications with a risk of being fraudulent.

Councillor Roz Smith queried the trainings available to staff so that they can recognize instances of possible fraud and how these staff members are being acknowledged for the good work they are doing in making referrals. Additionally, Councillor Smith asked for more information regarding the proportion of referrals that are being made from each source. Councillor Smith also asked if Audit and Governance training could be available for new members, because of the particular language and references that are used in the committee.

Nigel Kennedy, Head of Financial Services, stated that there is a training session available to members. When this training was conducted, it was recorded, and this can be distributed to the members of Audit and Governance Committee.

The Senior Investigation Officer replied by stating that referrals come from a variety of sources. Rob Ducker stated that 70 – 80% come from the general public, via their website and that about 30% come from staff. It was also outlined that the fraud awareness training is given to all new starters and that they also have regular fraud awareness training for staff. It was stated that they would be open to holding further trainings for staff and Councillors, if needed, and that they recognize and celebrate the staff who are making referrals regarding instances of possible fraud.

Councillor Ottino noted how the figures presented compared to previous years; stated that there has been a year-on-year rise, so the rise  ...  view the full minutes text for item 4.

Report of: The Internal Auditor, BDO

Purpose of Report: To detail the work undertaken by internal audit for Oxford City Council and provide an overview of the effectiveness of the controls in place for the full year.

Recommendation: To discuss and note the report.

Yasmin Ahmed, an Internal Auditor from BDO, presented the report which updated the Committee on the work undertaken by the internal audit and provided an overview of the effectiveness of the controls in place. It was noted that improvements have been made from previous years and that Oxford’s position is on par with other councils.

Nigel Kennedy, Head of Financial Services, stated that this is a successive year of Oxford being in this position and that although the term moderate is used, it shows that the Council is operating as it should be, almost across the board.

Councillors Ottino and Smith asked questions regarding the debts mentioned in the report and what concerns the Auditors have regarding these debts. The Internal Auditor responded by stating that some of these relate to ODS but that this would be covered in more detail in the discussion of Agenda Items 9 a and b.

Councillor Ottino also asked why transactions are taking so long to review and approve. In response, the Internal Auditor stated that capacity issues were a central reason for this. Now that an invoice system has been implemented, this will help to address this issue and had recommended that sanctions be put in place, in the event that transactions are not being approved in a timely manner.

The Head of Financial Services also stated that sanctions are being implemented when officers fail to approve transactions in a timely manner and agreed that the invoice system is helping to ameliorate the issue.

Councillor Roz asked if a recommendation is being made that procedures regarding the transactions be reviewed and if so, would that discussion come to this committee.

In response, the procedures are being reviewed and expectation of Managers across the Council. 

The committee noted that they wished to discuss the avenue to fraudulent behaviour which is possible through purchase cards in their next meeting.

The Audit and Governance Committee noted the report.

Report of: Head of Financial Services

Purpose of report: To update the Committee on both corporate and service risks as at 30 June 2024

Recommendations: That the Committee reviews the risk management report and notes its contents.

Bill Lewis, Financial Accounting Manager, introduced the report and stated the report differentiates between the corporate and service registers, presented an overview of the details of the risks and said that some risks have moved to be higher, while others have decreased in severity. Additionally, he stated that his team are also updating the corporate business continuity plan and the committee could expect to hear about this in future.

Councillor Fry requested further information regarding the two new red risks, regarding quality of data and data management systems.

In response, Emma Gubbins, Corporate Asset Lead, stated that these risks relate to the lack of an asset management system. She stated that were they have data, it is difficult for them to store and analyse the data, because they do not have the necessary system for this. They are working to procure a suitable management system and are looking to have a contract in place for January 2025. Due to the time needed to upload all relevant data, they hope to have the system in use by April 2025 and to help to alleviate some of the risk detailed in the report.

The Corporate Asset Lead went on the discuss the risks related to recruiting and maintaining staff. Nonetheless, she said that from September, they will be fully staffed in the corporate property team. In property services, they continue to struggle to retain staff, due to recent and ongoing changes in legislation.

Additionally, it was discussed the risks detailed in the report relating to condition surveys and their need to procure a management system, to improve date interpretation. Due to this, the management system needs to be in place before condition surveys are widely undertaken.

Councillor Fry asked if the new system would move at least two of the risks examined in the report from red, to a less significant risk category. The Corporate Asset Lead  responded that the new management system would move the two new red category risks out of that high risk level.

Councillor Ottino asked about the procurement of a management system and if there is anyway for this to be done more quickly. In response, they could not develop their own system, because this would be too time consuming. However, there is a wide range of management system products available and they have employed a consultant to help them determine which system is the most suitable for their needs.

Councillor Fry asked if, in practice, the risk regarding proper procedural practice occurred very frequently. Bill Lewis responded that although that risk is always present, it is not a regular occurrence. However, with the new legislation that is coming in, this could become more frequent and they are working to prepare for this eventuality. The Head of Financial Services agreed that the challenges that relate to this risk do not occur often, but that the new regulations could lead to increases in these issues occurring.

Councillor Smith asked what assurances the committee would be given regarding the  ...  view the full minutes text for item 6.

The External Auditors, Ernst & Young, will provide a verbal update to the Committee.

Adrian Balmer, an External Auditor with Ernst & Young, provided the Committee with a verbal update on the current audit and he advised the Committee of the three phases that had been developed to deal with the backlog agreed by the Department of Levelling Up and Communities and the Financial Reporting Council as follows:

• Clearing the backlog and historic audit opinions up to and including the financial year 2022/23. The original deadline for this was 30 September 2024, but this has been delayed due to the general election and upcoming legislation.
• Create backstop dates to mitigate against future backlogs of audits in future years.
• Addressing system challenges in the local audit system and embedding timely financial reporting and audit reporting deadlines.

Councillor Fry raised the point that for the 21/22 and 22/23 years, an external audit had not been completed. This was raised in the previous Audit and Governance Committee meeting and Councillor Fry asked about the assurances that could be provided by having an audit disclaimer.

The External Auditor responded that each time a delay occurred, it became increasingly difficult to get back into a workable cycle. This cycle is what they are currently working towards.

Councillor Fry asked when the deadline for the 23/24 audit is and Preeti Malik, an External Auditor with Ernst & Young, stated that she is managing the 23/24 audit and that they are looking to commence fieldwork for this in August and will be working on this through January 2025. The External Auditor stated that although there have been delays, they have a positive view for the 23/24 audit and the audit workshop they had earlier in the year, which educated on quality of audits and timely delivery, and which was well received. 

Councillor Smith stated that it was disappointing for the Committee to no have assurances for previous years’ accounts and asked when they expect to conclude the 23/24 audit and for further information on how that audit would be conducted.

In response the audit work will begin in August. She said that it will not be a light touch audit and that it will include a value for money examination.

The Financial Accounting Manager contributed to this discussion by stating that for the 21/22 and 22/23 years, a value for money evaluation will be undertaken and that this will continue into the 23/24 audit. It was also noted an added level of uncertainty because the backstop date has not been set and this date is unknown until the legislation comes out.

It was confirmed the 23/24 audit will be a consolidated audit of the Council and its companies.

A question regarding the fees for the 23/24 audit was raised by Councillor Smith and she asked if these would be higher than in previous years. The Financial Accounting Manager expected the fees for the 23/24 audit will be higherand assured the committee that further information regarding the fees can be found online.

The Committee thanked the external auditors and noted that they wished to  ...  view the full minutes text for item 7.

Report of: The Internal Auditor, BDO

Purpose of the report: To inform the Audit and Governance Committee of progress made against the 2024/2025 internal audit plan.

Recommendation: To discuss and note the report.

Yasmin Ahmed, an Internal Auditor with BDO, presented the report which informed the Committee of progress made against the 24/25 internal audit plan; in terms of progress, all reviews of 23/24 had been completed. Additionally, planning for 24/25 is underway and a QL review is planned for the 24/25 review.

In terms of data analytics, the Internal Auditor stated that they try to include this each year in their review. They reviewed the approval and review processes and found that there were clear processes in place for card transactions. Despite this, they also found that transactions were not approved in a timely manner, sometimes with a delay of over a year. Additionally, they found that with accounts payable, there was a significant amount of outstanding debt, which was recommended to be cleared.

For 23/24, Yasmin said that they reviewed about 30,000 transactions, which was a significant amount of data. They will need to go back to this data again to see where the outstanding debt is and if it is in a better position in the next review.

Nigel Kennedy, Head of Financial Services, stated that they had already made a substantial provision for back dated debt. They will be able to return to the matter of backdated debt, in greater detail, at a later meeting of the committee. Additionally, there is a need to map the credits to the outstanding debt and that there are some debts still being reviewed by the legal team.

Councillor Smith asked if any of the debts were incurred because invoices were sent to organizations which were unable to make payments via online banking. The Internal Auditor responded that this was the case with some of the debts analysed. She also stated that when they come back to this matter in the next review, they expect the debts to be lower.

Yasmin Ahmed also discussed their assessment of the Council’s implementation of the selective licensing scheme. It was found that the Council has good procedural guidance on this matter, but that applications are not being processed in a timely manner. Although the Council has been proactive in finding a solution to this issue, that there remains a backlog of 6,000 applications to be assessed by 2027 and expected to meet their target for property inspections by 2027.

David Butler, Head of Planning & Regulatory Services, stated that after they launched the scheme in 2022, they had about 35% more applications come through then they had anticipated and that despite the backlog, they believe they will be able to work through this before the end of the scheme. It was noted that there were staffing issues and were not as far along as they would have liked to be by this point, but they believe they will get to where they need to be by 2027.

Wendy Rollings, Interim Regulatory Services Manager, stated that their target is to issue licenses in 12 months and that this target was based on having 20 officers. Despite having only  ...  view the full minutes text for item 8.

Report of: The Internal Auditor, BDO

Purpose of Report: To provide a summary of the status of implementation of recommendations arising from reports issued in 2024/2025, 2022/23 and 2023/24.

Recommendation: To discuss and note the report.

Yasmin Ahmed, an Internal Auditor with BDO, presented the report which sought to provide a summary of the status of implementation of recommendations arising from reports issues in the past three years. In terms of incomplete recommendations, she stated that there is one regarding income generation and one concerning housing rates; that these will be followed up on at the next Audit and Governance Committee meeting.

The meeting then moved into a confidential session, to discuss the confidential papers relating to this report.

The Audit and Governance Committee noted the report.

To approve as a true and accurate record the minutes of the meeting held on 8 April 2024.

The Committee agreed to approve the minutes of the meeting held on 08 April 2024 as a true and accurate record.

The Committee is scheduled to meet at 6.00pm in the Town Hall on the following dates:

·       25 September 2024

·       29 October 2024

·       20 January 2025

·       02 April 2025

The Committee noted the dates and times of future meetings.