Issue - meetings

The Committee considered the audit report from KPMG regarding the HRA Right to Buy receipts audit, which followed on from the report to the Executive on 23 March 2021, on a review of the use of the right to buy capital receipts by the Council.  The review had reported that, in 2019-20, the Council had to repay Right to Buy (RTB) receipts plus interest to government totalling £2.7million.  The reason for the repayment was because the Council had not spent the money on its new build housing investment programme in the HRA within the required time frame.  Although the Council had acquired property to try and mitigate some of the repayment risk, it had not spent enough money on acquisition of property into the HRA to mitigate all of the repayment risk.  The report showed that the Council had seen slippage in the region of 56% to 72% on its Housing Investment Programme (HIP) in recent years which continued into 2020-21. 

The HIP was funded 30% through RTB receipts (with the remaining 70% being funded either through HRA reserves or, if necessary HRA borrowing) and as such, any slippage in delivery had a direct impact on the risk of having to repay receipts to government.  The review had found that, in order to avoid this risk going forward, the Council needed to improve both the monitoring and the delivery of its Housing Investment Programme.  The Executive had set up an Executive working group to consider why RTB receipts needed to be repaid to government, the reporting arrangements around the matter and what could be done to prevent further repayments.  Alongside the working group, the Council’s internal auditors, KPMG had been asked to carry out an audit of the monitoring and use of RTB receipts, and the findings were presented in the audit report submitted to the Committee.

The audit report had made seven recommendations which had been accepted by officers for implementation.  The highest priority of the recommendations was to establish a formal policy around Right to Buy Receipts and their use.  This proposal had been recommended to the Executive at its March meeting; however, KPMG had recommended that the policy should also set out the roles and responsibilities, accountability and ownership for the spending and monitoring of RTB receipts.  Officers indicated that the policy would be submitted to the Executive for approval in September 2021.

KPMG had found that some, but not all, of the recommendations made to the Executive in March had been implemented.  The improvements to the financial monitoring reports to this Committee had been implemented immediately.  However, improvements to the monitoring and reporting of progress on projects identified as being partially funded through RTB receipts by the Major Projects Portfolio Board and the establishment of a Housing Working Group were still to be implemented.  KPMG had also made some additional recommendations relating to the training of officers and risk management processes.

The report highlighted one minor correction to the KPMG report in relation to the detailed  ...  view the full minutes text for item 7