To consider any items which the Chair has agreed to have submitted as urgent.

The Director of Adult Social Services addressed the Committee to inform Members that, following a recent delivery model assessment, a 'Decision in Principle' had been taken to return Adult Mental Health statutory functions and duties from Greater Manchester Mental Health Foundation Trust (GMMHT) to the Adult Social Care Directorate working within the Manchester Local Care Organisation. The Directorate would continue to work collaboratively with both GMMHT and any staff concerned to ensure a safe transfer, and a report containing information on the new delivery model would be submitted for consideration to the Committee’s February 2025 meeting.

Decision

To note that a report on the New Delivery Model for the Mental Health Section S75 Partnership Agreement will be submitted to the February 2025 meeting of the Committee.

[Dr Downs declared a personal interest in the item as his wife works for Greater Manchester Mental Health Trust]

To approve as a correct record the minutes of the meeting held on 22 October 2024.

Decision

To approve the minutes of the meeting held on 22 October 2024 as a correct record.

The report of the External Auditors (Forvis Mazars) is attached.

The Committee considered a letter from the External Auditors (Forvis Mazars) which summarised the conclusion of pending matters in relation to the 2022/23 External Audit of Annual Accounts.

The External Auditor’s Senior Manager explained that the letter was in follow up to items that were considered in the Committee’s July 2024 meeting in relation to the 2022/23 audit. She explained that the letter essentially confirmed specific actions that had been addressed since that meeting in respect of outstanding matters.

Final review procedures were still in progress and it was anticipated that Audit Opinion would be signed off imminently.

Decision

To note the Audit Completion Follow Up Letter in respect of the 2022/23 Annual Accounts.

The report of the External Auditor (Forvis Mazars) is attached.

The Committee considered a report from the External Auditors (Forvis Mazars) which summarised work that had been undertaken for the year ended 31 March 2023. In introducing the report, the Senior Manager, (Forvis Mazars) gave an outline of items within it that had previously considered in earlier meetings (eg internal control recommendations and unadjusted misstatements) and pointed to the commentary in respect of Value For Money work. She reiterated that no significant weaknesses had been identified as part of that work.

Clarification was given to the report’s reference to ‘specific difficulties’. The Senior Manager (Forvis Mazars) stated that this was with regard to the complexities associated with Council’s Group Accounts and not the Council’s own single entity accounts. A member suggested that in future it would be helpful for committee members if an appendix were attached for reference to assist them in navigating those complexities. The Engagement Partner (Forvis Mazars) gave emphasis to the significant effort that had been undertaken by both the Council’s Finance team and the External Auditors to better understand matters related to group consolidation work and to simplify the narrative in respect of future accounts.

The Chair commended Forvis Mazars on their efforts to ensure that the document was accessible in terms of being read by a wider audience including members of the public and other external stakeholders. He also noted that the report’s commentary included a reference to the Avro Hollows Tenant Management Organisation (AHTMO) and described that as a significant reflection of the gravity of the situation. The Committee was mindful that a detailed discussion on the AHTMO would follow under a later item of business on this agenda.

Decision

To note the report.

The report of the External Auditor (Forvis Mazars) is attached.

The Committee considered the report of External Auditors (Forvis Mazars) which presented the initial Audit Strategy for the year ended 31 March 2024.

The report summarised the scope of the audit and explained how the statutory backstop arrangements, as introduced by the Accounts and Audit (Amendment) Regulations 2024, had impacted upon the completion of that work and the reporting consequences with specific reference to the intention to submit a disclaimed opinion.

The report included an outline of procedures that had been determined as necessary to align with government measures, associated fees and confirmed that information about Value For Money would be included to facilitate to publication of the Accounts by 28 February 2025.

Forvis Mazars responded to questions from Members arising from the report. In respect of the impact of the disclaimed opinion for 2023/24 it was explained that a similar commentary would be provided in respect of Value For Money work as was outlined for the 2022/23 Accounts. Reporting would include a ‘plain English’ narrative on the decision for issuing the disclaimed opinion. They added that the wording would be agreed in collaboration with the City Treasurer. The Committee welcomed this approach.

Decision

To note the report.

The report of the City Treasurer is attached.

The Committee considered a report of the City Treasurer which set out an update on the 2022/23 accounts and outlined the key audit adjustments since the last update was provided to the Committee in April 2024.

The City Treasurer referred the long and arduous process that had taken place in getting to the current position and confirmed that the Accounts were shortly due to be closed subject to a final checks and sign off. With reference to the 2024/25 accounts, he advised that discussions were planned with the External Auditors to agree on how assurance may be provided on those accounts in view of the disclaimed opinion on the 2023/24 accounts. He thanked the Deputy City Treasurer and the Finance team for their due diligence under extremely challenging circumstances and gave credit to the collaborative relationship with the External Auditors.

The Committee also recognised the significant effort that had been involved in the conclusion of the accounts and thanked the Council’s Finance team and the External Auditors for their perseverance and endurance.

Decision

1.       To approve the revised annual accounts including the accounting policies contained within them.

2.       To delegate authority to the City Treasurer and Chair of Audit Committee to approve any final non-material changes

The report of the Assistant Chief Executive is attached.

The Committee received its annual report from the Assistant Chief Executive and the City Solicitor setting out the Council’s annual performance for 2023/24 regarding the management of corporate and social care complaints, Councillor and MP enquiries, Ombudsman enquiries, as well as information requests.

The City Solicitor introduced the report and referred to the evident increase in the number of complaints received, which she explained were in the context of service pressures that had also impacted upon a slight decrease in overall response rates. Complaints had effectively doubled since 2020, with a significant increase in number when compared to the previous year. A majority had been transactional complaints in that they had been directed at the Neighbourhoods Directorate and were specifically related to complaints about waste and highways issues. Corporate Core complaints were largely focussed on Revenue and Benefit matters and parking related complaints (the latter being the highest). Social Care complaints had increased slightly, with an associated reduction in the response rate that was felt to be relatively small in view of their complexity. With regard to Local Government and Social Care Ombudsman complaints, emphasis was given to an overall reduction in the number of upheld complaints.

The number of Councillor and MP enquiries had increased. The City Solicitor referred to an ongoing piece of work to strengthen the governance and management of those enquiries in a more streamlined way. A further update on this would be submitted in a future report to this committee. The report also included a narrative on learning action plans to improve future practice and performance. Reference was made to the implementation of a new recording system that would enable improved linkages between service requests, complaints and councillor enquiries.

In response to questions from the Committee, the Complaints Manager advised that the Council’s response rates targets had been internally set and that it was accepted to be more ambitious than other Local Authorities. She added however that the Local Government Ombudsman had recently launched a new Code of Practice that specifically referred to the management of Local Government complaints. This would, effectively increase the target timeframe for the Authority to respond to Stage 1 and 2 complaints. This would be implemented by the Authority next year and would support greater scope to undertake benchmarking activity with other authorities. In the meantime, an interactive map was available to enable comparisons with Core City authorities and it was felt that Manchester compared favourably with authorities of a similar size.

There was a discussion about the impartiality of the complaints process. The Complaints Manager outlined the basis on which established procedures are followed across both stages of complaint, the aim of which was to ensure that responses are informed, objective and fair.

With regard to Subject Access requests (SARs), the City Solicitor advised that such matters were dealt with rigorously with embedded quality assurance procedures that were overseen by the Council’s Legal Services department to ensure compliance with the regulations. With regard to SARs that were applicable to  ...  view the full minutes text for item 39.

The report of the Assistant Director, Assurance and Risk is attached.

The Committee considered a report of the Assistant Director, Assurance and Risk which set out the latest refresh of the Council’s Risk Register. The Assistant Director Assurance and Risk introduced the report inviting members to note that the report reflected the new approach that had been outlined in the previous report to this Committee. He explained that the focus of the report was to provide assurance around the risk management framework, advising that risks were defined as either strategic, corporate or at directorate level with a summary of those risk attached as an appendix to the report.

The Committee was invited to note that the next round of risk refresh was scheduled to take place in December with an updated Council Risk Register to be presented to the Senior Management Team by the end of January 2025. Following that review, a further update on the Register would be shared with Audit Committee for assurance purposes.

Decision

To note the report.

The report of the Assistant Director (Strategic Housing) and the Assistant Director, Assurance and Risk is attached.

The Committee considered a report of the Assistant Director, Assurance and Risk and the Assistant Director Strategic Housing regarding ongoing concerns about the Council’s role in managing the Avro Hollows Tenant Management Organisation (AHTMO) and a summary of actions to date.

In addition to an introduction and background, the report included information about:

• Reports and areas of concern, including an Internal audit report dated March 2022, a Special Review undertaken in November 2023, as well as concerns around consumer standards and building safety
• A summary and next steps

The Chair informed the Committee that he had received email communications from the Chair of the Tenant Management Organisation who had initially asked to speak on the item regarding the matter concerns however she had later withdrawn that request.

The Executive Member for Housing and Development explained that whilst AHTMO was one of two Tenant Management Organisations (TMO) within the city it was important to recognise that the residents of those properties remained council tenants. He referred to AHTMO’s responsibility for 312 properties across 4 high rise blocks and other low rise homes and concerns were attributed to the effectiveness of the TMO’s governance arrangements, as well as concerns about the probity and the safety of affected tenants.

The Committee recognised the seriousness of the implications of the limited assurance opinion. Members were also mindful of the significant length of time that had elapsed since the relationship between the TMO and the Council had been highlighted as a concern. In view of the Committee’s role in the oversight of risk management, they were keen to establish appropriate actions to address those concerns in view of the perceived lack of progress, given that liability for the affected tenants sat with the Council. The Assistant Director Strategic Housing referred to specific complexities that had influenced next steps and spoke about an intention to consult with senior colleagues in Legal Services about the feasibility of potential improvement measures and a timeline for any agreed measures to be implemented.

The Executive Member for Housing and Development welcomed the Committee’s feedback on the seriousness and severity of the concerns. He referred to the Right to Intervene mechanism within the legislation in view of the deteriorating relationship with the TMO and its capacity to comply with significant regulatory changes in housing standards and the safety and wellbeing of its residents. A further update on this matter would be submitted to a future meeting of the Committee. The Chair requested that an update is provided at the February 2025 meeting.

Decision

1. To note the report.

2. To request that a further update on matters concerning the Avro Hollows Tenant Management Organisation is submitted to the February 2025 meeting.

The report of the City Treasurer is attached.

The Committee considered a report of the City Treasurer which set out treasury management activities of the Council during the first six months of 2024-25.

In addition to an introduction and background the report included information about:

• The portfolio position as at 30th September 2024
• A review of economic conditions 2024-25 to date
• Treasury borrowing in 2024-25 to date
• Capital finance budget forecasting
• Compliance with Prudential Indicators and Treasury Limits
• Investment Strategy for 2024-25 to date
• Temporary Borrowing and Investment for 2024-25 to date

The Commercial Finance Lead introduced the report and explained that in view of significant borrowing having taken place in October 2024, this had been reflected in the report. He referred to a challenging financial market in the first six months of year 2024/25 in terms of fluctuating interest rates and an uncertain economic outlook. Whilst it was recognised that interest rates had fallen, longer term rates had increased slightly alongside a dampening of market expectations around falling interest rates. Borrowing had therefore been timed and structured in the most cost-effective way.

He responded to questions about future borrowing implications, temporary investment strategies, the use of capital financing reserves, and Lender Option Borrower Option (LOBO) loans.

Decision

1.    To note the report.

2.    To request that the next update includes information about the rationale and process that is applied to proposals to increase the capital budget of a given capital project.

The report of the Assistant Director, Assurance and Risk is attached.

The Committee considered a report of the Assistant Director, Assurance and Risk which provided a summary of anti-fraud arrangements and investigation work undertaken during 2023/24 by the Internal Audit team.

In addition to an introduction and background, the report provided information about:

• Internal control arrangements
• The structure and roles within the Internal Audit team, and the Council approach
• Financial outcomes in terms of recovery and prevention
• Proactive antifraud activity,
• The reactive antifraud caseload; and
• An outline of key proactive work and plans for 2024/25

The Assistant Director, Assurance and Risk introduced the report. He explained that whilst the Committee’s earlier approach had been to receive its annual report in a closed session (ie exempt from both the press and the public), it had been agreed in consultation with the Chair that the report would be considered in an open session to reflect activity that is undertaken with regard to anti-fraud and anti-corruption arrangements.

The Assistant Director, Assurance and Risk responded to questions about the impartiality of the Council’s self-assessment framework, Covid-19 business support grants, phishing awareness activity across the workforce and the Council’s Whistleblowing policy. Through this it was established that line-management evaluation procedures formed part of the self-assessment framework. The Audit Committee’s role was also recognised as a key source of support and challenge in the wider process. The Council’s ICT service periodically undertakes simulated phishing exercises to determine where specific guidance and training may be necessary. Legacy work attributed to Covid-19 business grant fraud was drawing to a close. The Council’s Whistleblowing policy would soon be refreshed at which point a report could be brought to this Committee. It was suggested that following an amendment to that policy, a statistical analysis of referrals that followed is included.

Decision

1. To note the assurance provided.

2. To note that a report on the refreshed Whistleblowing policy will be submitted to a future meeting of the Committee.

The report of the Governance and Scrutiny Support Unit is attached.

The Committee considered a report of the Governance and Scrutiny Support Unit which set out its future Work Programme for the remainder of 2024/25 municipal year.

The discussed items for inclusion in the upcoming training event for Audit Committee members that is scheduled for December. As part of this discussion, a member raised a query about the process that is applied to proposals to increase the capital budget for specific projects. The Executive Member, Finance suggested that this information could be included in the next scheduled update on Treasury Management activities. The Committee agreed to this.

Decision

1. To note the report and approve the work programme, subject to the amendments made in the previous agenda items.

2. To request that the next update on treasury management activities includes information about the rationale and process that is applied to proposals to increase the capital budget of a given capital project.