Apologies were received from Cllr Butcher and Cllr Williscroft

There were no declarations of interest.

The minutes of the meeting of 2 December 2024 were agreed.

The Deputy Monitoring Officer introduced the report, noting in particular the following proposed changes,

-       The change of name of this committee from Standards and General Purposes to Governance Standards and Audit

-       The change to call-in of decisions, in line with best practice elsewhere in other authorities.  Key decisions would remain subject to call-in and non-key decisions would not be. This change has been flagged as an issue by leader of opposition group.  Recent call-ins on non-key decisions included those on a traveller site, and a controlled parking zone, which were valid call-ins under the rules but were not referred back to the original decision maker for reconsideration by scrutiny. 

-       Prioritisation of key decisions is in line with best practice and £500k threshold was considered appropriate, and ultimately it was at the discretion of each local authority on how to approach this issue.

In response to questions it was confirmed that:

-       The change to call-in was not so much a solution to a problem, but good governance, there was no suggestion of an abuse of call-ins, but it was about ensuring a good governance structure.

-       Definition of key decision, precludes decisions that only affect one ward, this is not a local definition, it’s defined in the regulations which all councils work under.

-       OSC can question Cabinet and Chief Officers but not Heads of Service. Chief Officers can nominate a ‘third tier’ officer to speak/present it doesn’t preclude their attendance/appearance,

-       Any constitutional changes would go through the Constitution Discussion Group (CDG) and this committee to full Council for approval,

-       It was proposed and seconded to remove the proposed changes at Article 4.2 (a) of Part 2 of the Constitution which allowed a delegation from full Council to a committee or an officer to amend the Constitution. It was put to the vote – votes in Favour 4, against 6. 

-       It was then proposed and seconded to amend the proposed changes at Article 4.2 to remove the word officer, so that only changes to the Constitution can only be agreed by committees of elected councillors This was agreed by the Committee.

-       It was proposed within the report that the appointment of Monitoring Officer goes to Appointments Committee like other chief officers, rather than full council, as the ratification of the MO post at Council is not a legal requirement.

Members proposed that the process to appoint the Monitoring Officer was not changed, retaining the requirement for Full Council to approve the appointment.

This was moved seconded and put to the vote. Votes in favour: 4, 5 against, the proposal fell.

It was then moved and seconded that Council receive the recommendation that appointment of the Monitoring Officer would no longer have to be ratified by full Council.

Votes in favour 5, 4 against, the proposal was therefore agreed to retain the proposals as proposed within the report.

It was RESOLVED that:

A. It was recommended to Council that the amendments to the Constitution  ...  view the full minutes text for item 4.

Item is contained in Appendix B of agenda item 10, Final Accounts.

Item is contained in Appendix B of agenda item 10, Final Accounts.

Report will now come to a future meeting. 

Report will now come to a future meeting. 

The Head of Internal Audit introduced the report, noting that details of reviews completed were included in the report appendices. There were 5 limited assured reviews and 7 priority 1 actions, an update on limited assurance would be provided at the next committee. 

In response to questions from the Committee, the Head of Internal Audit confirmed that:

-       Outstanding actions all related to the previous year, this year’s work had all received satisfactory responses.  The items in draft were awaiting an implementation date. 

-       The remaining longer term action, had been allowed to progress as normal business and it was expected thatthe appropriate department wouldupdate regularly.

-       Some Procurement cards were being used with some unapproved suppliers and therefore Audit had tightened up the controls on those processes., however it was noted that there was no suggestion that they were being used for private purposes.

It was RESOLVED that:

Members noted the Internal Audit progress report

The Head of Internal Audit introduced the report which considered areas for inclusion - schools, procurement and IT were particular areas of focus. 

In response to questions from the Committee ,the Head of Internal Audit  confirmed that:

-       If areas for improvement were identified, officers  would agree an action plan and expect departments to feed back an implementation plan and agree an implementation date. 

-       Internal Audit is part of a 5 borough partnership. The staffing allocation to Merton equates to 4 full time staff,however the partnership enabled officers  to use resources flexibly across the partnership. There is also a framework agreement with Mazars for IT specialism.

-      

-       At this stage of the audit plan, in relation to new home building plans, officers will be looking at the governance arrangements of what has been approved for new homes, with the option to look at further processes once the council has started to spend money on the project - discussions on scope and timing for this work were yet to be held.

It was RESOLVED that:

The Committee reviewed and commented upon the 2025/26 Draft Internal Audit Plan, Strategy and Charter.

The Assistant Director Fraud (SWLFP) introduced the report, noting a change for next year - a new fraud threat level recognising growth in demand for temporary accommodation and refocussing resources into this area. 

It was noted that there was a new inclusion in this report; section 8, RIPA, included for the first time for Merton from 1 April the previousyear, when responsibility for the register transferred to the Fraud team and a summary of activities undertaken had also now been included.

In response to questions, it was confirmed that:

-       The appendix within the report detailed the completed work, which covered agency workers, it was noted that a lot of resources had gone into a particularly large case where an agency worker abused their position., Whilst the contract had ended for that individual, recovery of council losses wee in place and further action, in conjunction with the police was ongoing. 

-       A similar case was also reported where  a person had abused a position in the care sector where they had a private business and may have used their position to make referrals to their private business. Whilst this had happened some time ago, it had been identified in the previous year. Whilstthe criminal case had broken down,  the evidence was sufficient to remove the accreditation from that individual.

-       RIPA provides a cast iron defence against a breach of the human rights act, however this can only do that if the crime carried a custodial sentence of 6 months or more.It was noted that  some work undertaken relating to  blue badge usages, doesn’t get the full RIPA shield of magistrate approval, however officersfollow the same process and these are regularly reviewed to allow surveillance. 

-       Council tax overpayments, were a reactive piece of work, so the data within the report showed where cases had been referred to the Fraud team. 

-      

-       The report covered to the end of December, however it was noted that officers were performing ahead of schedule, and as fraud isn’t a linear activity, there was some flexibility to even out performance across years. 

-       Resolving tenancy fraud abuse had been a challenge in engaging with the main provider and their ability to refer cases , so the data included within the report was a restoration back to normal levels, not a large increase.

It was resolved that:

A. That members noted the indicative Fraud Plan for 2025/26

B. That members noted this Fraud Update on the activity completed during 2024/25, to 31/12/24.

Report to follow.

The Director of Resources introduced the report, noting the challenges in getting the accounts audited however The Council werewithin the amended deadline.  The accounts would be qualified for the reasons previously outlined and it was likely to be in that position for a number of years, however it was stated that it was pleasing to be able to present the statement of accounts which were prepared on time and on target to complete fully by the February 2025 deadline. 

The External Auditor noted that the 23/24 financial statement hadmade a small number of disclosure and adjustments and a couple of unadjusted items that were not material.  They expected to sign the audit report the following week post meeting. 

They would not be reporting any actual weaknesses in arrangements, which was a positive position for the council. There were no major issues.

Internal control issues were not large or worrying however there were areas to improve within the control environment.  This had not found any issues to bring to the Committee’s attention due to fraud or risk of fraud. 

The Accounts for 23/24 would be disclaimed due to the 22/23 report and had impact as set out at December meeting, this would last 3 years and work had already begun to start to rebuild assurance on closing balances. 

The Executive Director – Finance & Digital thanked the Director Resources and the finance team for their work, and recorded thanks to EY for their work throughout the year, and a challenging time for the sector.

The Chair thanked Liz Jackson, External Auditor on her final meeting.  and thanked Merton officers for consistently producing statements of accounts on time each year. 

It was resolved that:

A: That Committee approved of the Statement of Accounts for 2023-24 as Appendix A;

B. That Committee received the EY Audit Report 2023-24 (Appendix B)

C. That Committee agreed to the Chairman signing the Letter of Representation for 2023-24, as appendix B

Members requested that the September HR report included a statement on zero hour contract usage within in the council.

The Work Programme was noted.