Agenda item

At the request of the Chairman, Councillor Nigel Manning and in the interests of transparency, the Vice-Chairman took the chair for the consideration of this item on the basis that he had been a member of the Property Review Group when the Burchatts Farm Barn matter had been considered previously.

The Vice-Chairman, Councillor Deborah Seabrook declared a non-pecuniary interest in relation to this matter on the basis that she was a patient of the chiropractor firm which currently leased Burchatts Farm Barn.  On the basis that the firm was not the subject of the governance report, and in the interests of transparency, Councillor Seabrook confirmed that it would not affect her objectivity in relation to the matter, her ability to chair the committee in respect of this item of business.

Prior to the formal consideration of this item, Mr Gavin Morgan, on behalf of the Guildford Heritage Forum, addressed the Committee in respect of the governance review of Burchatts Farm Barn. and a statement written by Honorary Alderman Gordon Bridger in respect of that matter was read out to the Committee.

The Committee considered a report setting out a summary of internal audit reports produced by KPMG for the period 1 May 2020 to 31 October 2020, which related to the review of the operation of Treasury Management controls and the design and operating effectiveness of payroll controls, together with remedial recommendations which had been agreed with management.  It was agreed that an update on the implementation of the recommendations would be presented to the Committee at its meeting in January.

The report also contained draft reports on two governance reviews completed by KPMG, on Burchatts Farm Barn and North Downs Housing Ltd, which had been due in March 2020 but had been delayed until after the lockdown in August.

The Committee noted that the Burchatts Farm Barn review had addressed the process by which the Council had let the venue, which had been a contentious issue and the scope of the review was to examine whether due process had been followed and the lessons to be learned for the future.

The draft governance review in respect of North Downs Housing Ltd had identified a number of areas for improvement in terms of reporting structures, clearer terms of reference, and monitoring and action tracking of decisions.

The Committee noted that, as the two KPMG reports were still in draft, it was intended that the reports would be updated following consideration by officers and councillors. 

In particular it was anticipated that additional information would be included within the Burchatts Farm Barn report which would lead to an additional recommendation(s) being made by the auditors in relation to the need to review the classification of assets. 

Although the reports had been included in the agenda in draft for the Committee’s discussion at this meeting; it was not appropriate for further comments on the reports to be made by the auditors at this stage. 

During the debate on the Burchatts Farm Barn governance review, the following points were made by the Committee:

·       Inadequacy of the advertising of the disposal

·       No consideration of possible community use of the Barn

·       Concerns over the inaccurate financial information made available to councillors – for example the £40-70,000 overstatement of operating costs

·       The Council should consider introducing a policy on the transfer/disposal of buildings and assets of community value

·       The Council should consider conducting an audit of existing community facilities on a ward-by-ward basis including the condition of such assets

·       Management and operation of our community assets need to be urgently reviewed, including information to the public as to availability of such assets for hire and facilities available at each venue

·       Accountability of officers making the decision

·       Whether KPMG had reviewed relevant emails from councillors, including the former Leader and relevant former lead councillors regarding the disposal, and whether KPMG will interview those councillors and former councillors as part of the investigation

·       Error in KPMG’s project timeline

·       Look at establishing a task group to:

o   review the Council’s approach to the disposal of community assets in the future and procedures to be adopted including the involvement of the local community and ward councillors in informing decisions on disposals;

o   review community facilities across the borough with a view to developing a policy on how the Council can provide support to them

·       The Committee should consider whether the disposal of community facilities should be determined by the Executive in all cases, rather than by officers under existing delegated authority

·       The decision to dispose of the Barn was taken in October 2016 and it was never designated as a community asset

·       Officers provided information in good faith, but it is important that we learn from mistakes made

·       The importance of having a clear set of rules governing the disposal of community facilities including a decision matrix on matters such as deliverability, rental income, community asset value

·       The need to differentiate between community facilities and Assets of Community Value

·       Whether the remit of the governance audit should be extended to include other examples of disposals of community facilities around the borough

·       As part of a series of wider learning points, there was a need to produce and maintain an index of Council policies to include details of what they covered, the name of the responsible officer, when they were approved, and when they were next due to be reviewed

During the debate on the North Downs Housing Ltd (NDH) governance review, the following points were made by the Committee:

·       NDH and the holding company appeared to be operating well despite current operating processes rather than because of them

·       KPMG recommendations provide some clarity going forward, particularly in terms of reporting to the Council on NDH’s performance, and will help in terms of clarifying NDH’s aims and objectives

The Committee’s comments would be reviewed by the auditors as part of the process of finalising the reports.  The final reports, together with management responses, would be reported to the Committee at its meeting in January for further consideration.

Having considered the matters raised, the Committee

RESOLVED:

(1)   That the Internal Audit Progress Report (November 2020) prepared by KPMG, as set out in Appendix 1 to the report submitted to the Committee be noted.

(2)   That the draft reports prepared by KPMG concerning the Burchatts Farm Barn review and North Downs Housing Ltd be noted and scheduled to be resubmitted in final format to the meeting to be held on 14 January 2021.

Reason:

To ensure an adequate level of audit coverage.