Agenda and minutes

Apologies were received from

There were no declarations.

To agree the public minutes and non-public summary of the meeting held on 28 April 2015.

The Chairman was disappointed about the low attendance at today’s earlier Risk Challenge Session and asked that, in future, if Members are unable to attend, they give adequate notice to the Town Clerk, in order for the session to be re-scheduled.  It was noted that two of the sessions had clashed with the Planning Committee and this would be taken into consideration when planning future sessions.  

In respect of the Director of the Built Environment’s session, it was suggested that this be rescheduled for 20^th July and that the Director’s successor should also attend.  The Town Clerk would check the current Director’s leaving date and the arrival date of the new one.

The Chairman welcomed new Member, Henry Colthurst.

International Centre for Financial Regulation - Members noted that there would be a Hearing tomorrow and would receive an update at the next meeting.

The Chairman suggested that, whilst the outstanding actions list was currently fairly low, it was timely to consider the addition of further items; i.e. limiting it to those which needed a further steer from the Committee.

It was suggested that the deep dives be re-introduced, in order to complement the risk challenge sessions and it would be timely to plan these from September, once the new Risk Register was in place. 

The Town Clerk advised that the Audited City’s Cash Financial Statements would be presented to the November Committee, not September.

Town Clerk to be heard.

RESOLVED, that:

Mr Ludlam continue as the Audit and Risk Management Committee’s representative on the Performance and Resource Management (Sub Committee) of the Police Committee.

Report of the Head of Internal Audit and Risk Management.

The Committee received the Head of Internal Audit’s Opinion and Annual report, including a progress report on internal audit work more generally.  Members were pleased to note that the City of London Corporation had adequate and effective systems of internal control in place to manage the achievement of its objectives.

During the discussion on this report, the following matters were raised/noted:

• An organisation could only achieve an ‘adequate’ or ‘inadequate’ opinion but the  Head of  Internal Audit could provide a more detailed overview, if required.  For example, there had been a recommendation in a previous year about project management, which had since strengthened. 

• The Internal Audit Manager explained that large, complex organisations would always have some small recommendations.  For example, the recommendations on HR initiatives would show results in about 9-12 months. 

• Members felt that it would be helpful if future reports could provide a comparison on the previous years’ performance and for improvements to be more visible.    For example, the presence of the Risk Register on all Grand Committees and the implementation of the Risk Challenge sessions. 

• The Chief Commoner was in attendance, as part of his regular programme of attending various Grand Committee meetings.  The Chairman hoped that he would see evidence of the rising profile of risk management as he continued his visits.

• As part of the Service Based Review’s agreed savings for the internal audit function of £220,000, over the next 2 years; Members noted that  there would be more focus on strategic audits, rather than lots of smaller ones and streamlining of green recommendations, which would only be reported in the event of slippage.  Members were assured that, should the  Committee become concerned at the level of resources, they would be able to raise this with the Chamberlain.

RESOLVED, that:

The Head of Internal

Report of the Town Clerk and the Chamberlain.

The Committee received a report of the Town Clerk and the Chamberlain, setting out the Annual Governance Statement.  Members found the format, showing track changes, very helpful.  They made one recommendation in respect of paragraphs 27 and 28; suggesting they reflect the City of London Corporation’s Services Based Review and other value for money/efficiency drives more pro-actively, as expressed within paragraph 29.

RESOLVED, that:

1. The Annual Governance Statement (AGS), be approved for signature by the Chairman of the Policy and Resources Committee and the Town Clerk and Chief Executive;
2. the AGS be published alongside the 2014/15 City Fund and Pension Funds Statement of Accounts;
3. the future developments to improve the governance framework be noted; and
4. authority be delegated to the Town Clerkand Chief Executive, in consultation with the Chairman and Deputy Chairman of this Committee, to amend the AGS for any significant events or developments relating to the governance arrangements that occur prior to the date on which the Statement of Accounts is signed by the Chamberlain.

Report of the Chamberlain. 

The Committee received a report of the Chamberlain in respect of the Corporate Risk Register Review.  Following the recent meeting of the Corporate Risk Management Croup (CORMG) and the Summit Group, the report recommended that 7 risks be retained on the Corporate Register, 2 be de-escalated and one be removed.

Some Members  asserted that ownership of the corporate risk register was ultimately for Members to decide/own.  The Chamberlain reiterated the previous debate, as recorded in the Minutes of 24 February 2015, i.e. that the register was owned by Summit and Members should be holding officers to account for the effective management of risk.  Both the minute of the previous discussion, and the Committee’s Terms of Reference, referred to the Committee as having a ‘monitoring and oversight role’ but Members felt that this supported their position.

Whilst the debate did not arrive at a clear conclusion, Officers and Members agreed that they would work collaboratively.   Members also welcomed the principle of the corporate risk register review.

Members referred the 3 suggested de-escalations on reputation, finance and workforce planning but there was a consensus on finance, pending further news on the Budget/ Spending Review.  

RESOLVED, that;

1.     CORMG  undertake a corporate risk identification session on 25 June 2015, with a view to recommending any new corporate risks to the Summit Group.  Any changes to the corporate risk register, as a result of this review, would be reported to the Committee in the next scheduled risk update report on 17 September 2015.

2.     CORMG consider further the de-escalation of workforce planning and reputation.

3.     The de-escalation of finance be deferred until the Autumn Spending Review, if the Budget not was not conclusive at this time.

There were no questions.

There were no items of urgent business.

RESOLVED: That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part I of the Schedule 12A of the Local Government Act.

Item                                                                 Paragraph

Exclusion of the Public

RESOLVED, that: Under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items on the grounds that they involve the likely disclosure of exempt information as defined in Part 1 of the Schedule 12A of the Local Government Act.

Items                                                                                       Para

13 - 17                                                                                     3

Report of the Chamberlain.

(This report, which was originally an appendix to last Month’s regular ‘Anti-fraud Investigations Update’ was deferred to this meeting of the Committee)

Members received a report of the Chamberlain in respect of Cyber Fraud.  This report had been deferred from the last meeting as the IT Auditor had not been in attendance.  Members noted that the work was currently in a learning phase and would be presented to the Finance Committee, with a further report to the Audit and Risk Management Committee later in the year.  Members noted that Baker Tilley’s Head of IT Audit would undertake a Cyber Fraud Audit of the City of London Corporation and deliver a presentation to this Committee.  There was also a masterclass on Cyber Fraud, for all staff, planned for 16 July.  As Mr Graeme Smith has professional expertise in this area, he offered to assist with the next report.

RESOLVED, that;  The report be noted.

Report of the Town Clerk.

The Town Clerk, in consultation with the Chairman  and Deputy Chairman of the Audit and Risk Mangement Committee agreed to the appointment of a chartered surveyor, called Malcolm Hull of Deloittes Real Estate, to act as the City’s expert witness in lease renewal proceedings at Spitalfields Market, for a capped fee of up to £150,000, although the actual amount spent is expected to be significantly lower.  Members noted that the full report set out the advantages of engaging this particular individual.

The Markets Committee met on 13^th May and approved the appointment; Finance Committee met on 12^th May and agreed to waive the requirement (under the procurement regulations) to seek 3 written quotations; and the Audit and Financial Risk Committee is being recommended, under urgency powers, to approve the waiver of existing limits on fees payable for non-audit work.

Given that the court process would begin shortly, officers needed the expert on board in the next 2 weeks to ensure he would be fully instructed.

It was therefore agreed that the Town Clerk, in consultation with the Chairman and Deputy Chairman of the Audit and Risk Management Committee  approve the appointment of Malcolm Hull of Deloitte to act for the City in respect of the bulk Spitalfields renewal, up to a maximum fee of £150,000 + VAT, waiving existing limits on fees payable to Deloitte for non–audit work.

There were no questions.

There were no items.

It was agreed to defer this matter to after the next meeting of the Committee on 20 July 2015.