Agenda and minutes

There were no disclosable pecuniary interests.

To agree the minutes of the meetings held on 29^th January and 17^th February 2025.

The minutes of the meetings held on 29^th January and 17^th February 2025 were agreed and signed as a true record.

There were no matters arising.

To consider whether to exclude the press and public for the private item(s) of business for the reasons shown in the report.

RESOLVED that the Audit and Procurement Committee agrees to exclude the press and public under Sections 100(A)(4) of the Local Government Act 1972 relating to the private report in Minute 67 below headed ‘Procurement and Commissioning Progress Report’ on the grounds that the report involves the likely disclosure of information as defined in Paragraph 3 of Schedule 12A of the Act, as it contains information relating to the financial affairs of a particular person (including the authority holding that information) and in all circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Report of the Director of Finance and Resources (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Director of Finance and Resources (Section 151 Officer), which was also be considered at the meeting of Cabinet on 11^th February 2025, that advised Members of the forecast outturn position for revenue and capital expenditure and the Council’s treasury management activity as at the end of December 2024.

The net revenue forecast position after management action was for spend in 2024/25 of £7.0m over budget. Whilst not a wholly comparable position, at the same point in 2023/24 there was a projected overspend of £8.5m.

The Council continued to face budget pressures within both Adults and Children’s social care, Housing, and City Services. Other overspends were also being reported in Property Services and Business Investment and Culture. These financial pressures were being caused by a combination of legacy inflation impacts, continued increases in service demand, complexity of cases and social care market conditions, income shortfalls due to reduced activity, and slippage in the delivery of some service savings. 

The Council’s position above included a significant number of one-off actions that had been applied to reduce the overspend. Recognising that the underlying position was significantly higher, further urgent action was required to address the pressure in-year and to prevent the 2025/26 position increasing to unmanageable levels.

The Council’s capital spending this year was projected to be £111.3m and included major schemes progressing across the city. The size of the programme and the nature of the projects within it continue to be fundamental to the Council’s role within the city. Although prevailing inflation rates looked to be stabilising, legacy inflationary pressures and high borrowing rates continued to affect capital projects. The assumption was that stand-alone projects that were already in-progress would be delivered as planned but that future projects that had not yet started would need to be re-evaluated to determine their deliverability within previously defined financial budgets.

The materiality of the financial pressures, both revenue and capital, had reaffirmed the imperative to maintain strict financial discipline and re-evaluate the Council’s medium-term financial position. This would be a priority across all services as the Council developed its future budget plans.

RESOLVED that the Audit and Procurement Committee note the content of the report and confirm that it has no recommendations for the Cabinet.

Report of the Director of Finance and Resources (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Director of Finance and Resources (Section 151 Officer), which provided an update on the progress made in implementing internal audit recommendations since January 2024.

The Public Sector Internal Audit Standards requires that “the Chief Audit Executive (i.e. Chief Internal Auditor) must establish a follow up process to monitor and ensure that management actions have been effectively implemented or that senior management have accepted the risk of not taking action”.

As reflected within its terms of reference, the Audit and Procurement Committee was required to receive reports on Internal Audit’s follow up process.  This report provides an update as to progress in respect of the agreed management actions which had been followed up during the period January 2024 to January 2025.

Given the number of audits that the Internal Audit Service completed every year, it was critical that it has a robust procedure in place for ensuring that it obtained appropriate assurance that audit recommendations had been implemented but did so in an efficient and proportionate way.  Where appropriate, Internal Audit defined within its audit reports the follow up process to those responsible for the system / area under review and a date was agreed of when this would take place.

Currently, there were three key considerations that would determine the follow up procedure adopted, namely:

1)  Whether the area audited was subject to an annual review.

2)  The level of assurance provided in the audit report.

3)  A self-assessment process for those reviews where neither of the points above apply, but a follow up review was necessary.

Overall, it was believed that the procedure achieved the right balance between ensuring action was taken in response to risks identified by Internal Audit and allowing the Service to focus on identification of new risks.

Of the 266 actions followed up, 65% had been implemented based on both the formal and self-assessment follow up method. When this was analysed by follow up method the results were:

·  Formal follow up method – 53% implementation rate.

·  Self-assessment follow-up method – 72% implementation rate.

In terms of the specific results, the following points should be considered:

·  Formal follow up – The implementation rate of 48% was slightly higher when compared with the results achieved last year, where the implementation rate was 45%.  However, when compared to the results achieved prior to the Covid-19 pandemic, it was clear that implementation rates have reduced over time.

·  Self- assessment – As the rate of implementation is considerably higher than the formal follow up method, it does suggest that action needs to be taken to ensure the current process can be relied upon. 

During 2024/25 the Chief Internal Auditor attended Leadership Board to discuss the importance of implementing agreed audit recommendations and the follow up process.  As a result, trackers have been put in place for each Director so they can monitor progress independently and a further update would be provided to the Leadership Board in the near future.  ...  view the full minutes text for item 60.

Report of the Director of Finance and Resources (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Director of Finance and Resources (Section 151 Officer), which provided an update on the internal audit activity for the period April to December 2024, against the Internal Audit Plan for 2024-25.  The report was presented in order for the Audit and Procurement Committee to discharge its responsibility 'to consider summaries of specific internal audit reports as requested' and 'to consider reports dealing with the management and performance of internal audit'.

The Internal Audit Plan for 2024-25 was presented to the Audit and Procurement Committee at its meeting on 22^nd July 2024.  The Plan provided for 650 days of internal audit work in 2024-25.  However, it was acknowledged that this could be subject to change due to emerging risks, requests from service areas to reschedule work, and any exceptions.  It was important for the Internal Audit Service to retain a flexible approach in order to ensure it could respond to issues on a timely basis and add value. Any significant changes to the Plan were reported to the Audit and Procurement Committee.  In 2024-25, the agreed Audit Plan originally included 25 days in respect of ICT and Digital Services.  Further discussions on the two specific planned audits with Digital Services have resulted in agreement for this work to be undertaken in 2025-26. This reflects the timing of planned activity within Digital Services which needed to be included in the scope of the work to maximise the value of the audit process.  As a result, the Audit Plan had been amended to 625 days, although this would not directly impact on resources within the Internal Audit Service as this work would be undertaken by specialist IT Auditors. 

The key target facing the Internal Audit Service was to complete 90% of its work plan by 31st March 2025.  As at the end of December 2024, the Service had completed 59% of the Audit Plan against a benchmark of 75% (which reflected delivery of 100% of the plan).  It was recognised that performance was below expectation, although the quarterly targets did not take account of the varying length of audits and, as such, performance would vary across the year.  Performance had also been impacted by vacancies within the Internal Audit structure.  Whilst the Audit Plan for 2024/25 took account of this in terms of available audit days, draft reports were taking longer to complete due to competing management demands.  Notwithstanding this, based on an assessment of performance, as at February 2025, it was predicted that the Service would be close to meeting the target by the end of March 2025. 

Appendix 1 of the report provided a list of the audits finalised between April and December 2024, along with the level of assurance provided.  At 31^st December 2024, the following audits were in progress:

·  Group Governance Review

·  Section 17 Payments

·  Equality Impact Assessments

·  Implementation of new IT systems

·  Homelessness

·  Housing Benefits / Council Tax Support

·  Health Visitors Contract

·  Energy Billing

·  Management of  ...  view the full minutes text for item 61.

Report of the Director of Finance and Resources (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Director of Finance and Resources (Section 151 Officer), that provided the Committee with the outcome of the review of the Corporate Risk Register 2025-26, incorporating an overview of the Council’s corporate risk profile and the controls in place to address these risks.

The Audit and Procurement Committee’s Terms of Reference required the Committee to monitor the effective development and operation of risk management within the Council.  It was agreed on 18^th March 2024 that the Committee would receive the Corporate Risk Register twice a year, in line with the Grant Thornton value for money report.

It was acknowledged that by having arrangements in place to identify and manage risks, the Council increased its chance of achieving corporate and operational objected and reduced the chance of failure.  Good risk management also increased ability to cope with developing and uncertain events.  The Corporate Risk Register should identify the risks that threaten the successful implementation of the One Coventry Plan.

The Corporate Risk Register, set out at Appendix 1 of the report, had been reviewed in consultation with the Leadership Board and Risk Owner.  It identified the main risks facing  the Council, the impact of the risk, the inherent risk score before mitigation, the risk score after mitigations were applied and where responsibility lay for the Council’s response.  The Register also indicated what the risk score had been when the Committee last received a report in September 2024.

The report indicated that there had been one risk added to the Register:

  Risk 40 – Mainstream Education Sufficiency.

The following 3 risks had been removed from the Register:

  Risk 28 – A deterioration in industrial / employee relations affects the Council’s ability to deliver vital services.

  Risk 29 – The continued implementation of the Elections Act

  Risk 31 – A Council that makes thoughtful, well researched and robust business cases backed commercial investments to derive additional sustainable income streams to the Council, so that it has additional funds to provide services to residents, deliver policy priorities, and achieve its One Coventry Plan through being more financially robust.

In addition, the residual risk score for  Risk 22 – Children’s Services Workforce Stability had been reduced from 20 to 16.  There were no risks where the residual risk score had increased or where the inherent risk score had changed but the residual risk score remained the same.

Following questions from the Committee, it was confirmed that it was not always the case that when mitigation was implemented that the residual risk would change and that, at times, the ability to mitigate a risk may be different as a result of internal and external factors.  The Committee also requested that, in future reports, the use of colours red, amber, green be amended due to reports being printed in black and white.

RESOLVED that, the Audit and Procurement Committee:

1.  Notes the content of the Corporate Risk Register, having satisfied themselves that corporate risks are being identified  ...  view the full minutes text for item 62.

Report of the Director for City Services and Commercial and Director for Coventry Municipal Holdings Limited

The Audit and Procurement Committee considered a report of the Director for City Services and Commercial and Director for Coventry Municipal Holdings Limited, in respect of the audited accounts for Coventry Municipal Holdings Limited (CMH) for the years ending 31^st March 2023 and 31^st March 2024.

The report had also been considered by the Scrutiny Co-ordination Committee on 6^th March 2025 (their minute 80/24 refers) and was also due to be considered by the Coventry Shareholder Committee at its meeting scheduled for 26^th March 2025.

The Coventry Municipal Holdings Limited (CMH) manages the commercial interests of the wholly owned Council investments in a number of arm’s length company investments, including:

•  Tom White Waste Limited (TW) and Subsidiaries: A&M Metals, TW(LACo) (the Teckal company)

•  Coombe Abbey Park Limited and subsidiaries: No Ordinary Hospitality Management (NOHM) Coombe Abbey Park (LACo) (the Teckal company)

•  Coventry Technical Resources Limited (CTR)

•  Coventry Regeneration Limited (CR_

•  No Ordinary Hotels Limited (effectively a dormant company)

A key legal document called the Group Governance Agreement (GGA) was developed to provide the governance framework for CMH, the parent for the Council’s wholly owned investments.  The GGA stipulates that CMH should produce an Annual Performance Report looking back at the operation of the Group to the year-end.  The Committee noted that the annual report would be presented to Coventry Shareholder Committee each year with the published accounts being presented to Audit and Procurement Committee. 

This report submitted looked at the years ending 31st March 2023 and 31st March 2024 for the CMH group of companies based on their audited accounts which were available at Companies House.  Tom White Waste and Coventry Municipal Holdings Group received an extension for filing granted to the 31st March 2025 and, as such, although they have been approved by the Board of Directors, they may not yet appear on Companies House.  The accounts for all other companies would be available at Companies House. 

The accounts for the year ending 31st March 2023 for Tom White Waste Limited Group, Coventry Technical Resources Limited and Coventry Regeneration Limited were previously presented to Audit Committee on the 29th January 2024.

There were a number of challenges with regards to the financial position for the subsidiaries in the group with the leisure sector recovering from the impact of Covid-19 and Tom White experiencing additional operating costs, higher material disposal costs, together with the correction historic accounting practices.  These factors have affected the financial performance as set out in the report.

The Committee sought further information and clarification on a number of matters, including:

·  How extensive refurbishment of Coombe Abbey Hotel would be provided for?  There was a rolling programme of works, including ongoing update of bedrooms, which would continue over a period of 10 years.  It was also important to consider how the hotel would use some areas going forward, such as the Abbeygate area currently used for banquets being promoted as a ‘wedding barn’.

·  Whether Tom White Waste  ...  view the full minutes text for item 63.

Report of the Director of Law and Governance

The Audit and Procurement Committee considered a report of the Director of Law and Governance that identified issues on which a further report/information had been requested or was outstanding so that the Committee were aware of them and could manage their progress.

Appendix 1 to the report provided details of an issue where a report had been requested to a meeting along with the anticipated date for consideration of the matter.

Appendix 2 of the report provided details of an item where information had been

requested outside the formal meeting.

RESOLVED that the Audit and Procurement Committee notes the Outstanding Issues report.

Report of the Director of Law and Governance

The Audit and Procurement Committee considered a report of the Director of Law and Governance that detailed the Work Programme of scheduled issues to be considered by the Committee during the Municipal Year 2024/2025.

RESOLVED that the Audit and Procurement Committee notes the Work Programme for 2024/2025.

There were no other items of public business.

Report of the Director of Law and Governance

(Listing Officer: R Amour. Email: rob.amor@coventry.gov.uk)

The Audit and Procurement Committee considered a report of the Director of Law and Governance, which provided an update on the procurement and commissioning undertaken by the Council since the last report to Committee on 30^th September 2024.  Details of the latest positions in relation to individual matters were set out in the Appendices to the report.

The report contained information required to be kept private in accordance with Schedule 12A of the Local Government Act 1972 as amended. The grounds for privacy were that it contained information relating to the financial and business affairs of a particular person (including the authority holding that information). The public interest in maintaining the exemption under Schedule 12A outweighed the public interest in disclosing the information.

The report indicated that since the last Committee when the procurement report had been presented, the Procurement Panel had received 27 reports and the Procurement Board 41 reports.

In addition, there had been a total of 46 exceptions. An exception to the Contract Procedure Rules may be granted subject to conditions, such as urgency, single source availability, technical nature etc. An exception could not be granted where a breach of any UK legislation would be incurred.

Members asked questions and received assurances at the meeting from officers on individual matters.

RESOLVED that the Audit and Procurement Committee:

1)   Notes the current position in relation to the Commissioning and Procurement Services.

2)  Confirm that no recommendations are to be made to the Cabinet Member for Strategic Finance and Resources, Cabinet or Council, on any of the matters reported.

There were no other items of private business.