Audit, Governance & Standards Committee


Annual Report





Introduction by Chairman of Audit, Governance and Standards Committee

This report provides an overview of the Audit, Governance and Standards Committee’s activity during the municipal year 2020/21.

Maidstone Borough Council has a very good record in ensuring its finances are sound and the Audit, Governance and Standards Committee has an essential role in ensuring that this financial position is maintained. And as part of this I should like to highlight the key role played by Internal Audit. Throughout the year Internal Audit prepares and presents detailed reports for the Committee to consider, which highlights the vital role that Internal Audit plays in the Council’s internal control process.

I am pleased to report the continued good work of the Committee in providing an independent overview of the Council’s governance. This role includes detailed consideration of the work of external and internal audit, plus robust scrutiny and challenge of the Council’s financial performance and controls. Through our Ethical Standards role, the Committee also has oversight of the approach the Council takes in investigating complaints made about Members, including Members of Parish Councils. This Committee is unique in that it has two representatives from the Parish Councils who make a valuable contribution to the Committee’s work.

During 2020/21 the Committee was pleased to note, among the highlights, further unqualified accounts and positive value for money opinions from our external auditors and a positive conclusion on the Council’s control and governance from our internal auditors. The Committee has continued to engage with the Council’s risk management process and to provide challenge when considering key internal audit findings. It should be noted that representatives from the Council’s Internal and External Auditors are always in attendance at the Committee’s meetings.

The COVID Pandemic has meant that 2020/21 has not been a straightforward year. Members and Officers have had to adapt to new ways of working; meetings have had to be carried out virtually and we have only relatively recently returned to almost normal working. I would like to take this opportunity to thank Members and the Parish Representatives for their contributions; and on behalf of the Committee thank the Officers for their support at the Committee Meetings and at the briefing sessions, which have been held throughout the year. These briefing sessions provide invaluable support to Members and are much appreciated.






Councillor John Perry

Chairman, Audit, Governance & Standards Committee


Purpose of the Committee

The Audit Committee operates in accordance with the Audit Committees, Practical Guidance for Local Authorities. This guidance was updated in 2018 and is published by the Chartered Institute of Public Finance (CIPFA). This guidance defines the purpose of an Audit Committee as:

Audit Committees are a key component of an authority’s governance framework. Their function is to provide an independent and high-level resource to support good governance and strong public financial management.

The purpose of an Audit Committee is to provide those charged with governance, independent assurance on the adequacy of the risk management framework, the internal control environment and the integrity of the financial reporting and annual governance processes. By overseeing internal and external audit it makes an important contribution to ensuring that effective assurance arrangements are in place.

At Maidstone, the role of the Audit Committee extends further than this. In 2015 the Committee was expanded to incorporate some functions previously undertaken by the Standards Committee. Specifically, this expanded role means that we also consider Member conduct and complaints. The functions of the Committee is aligned to the guidance to provide independent assurance over the Council’s internal control environment, governance, and risk management. In addition to helping the Council maintain strong public financial management.

Key activities include:

·         To promote and maintain high standards of Councillor and Office conduct within the Council

·         Adopting and reviewing the Council’s Annual Governance Statement and related actions

·         To provide independent assurance over the adequacy of financial and risk management and the overall control environment

·         To oversee the financial reporting regime and annual financial statements

The Committee is independent from management and other Committees, this is important as it ensures that duties can be discharged in line with the agreed Terms of Reference (attached as an appendix to this report). This includes rights of access and reporting lines direct to statutory officers, the Head of Audit Partnership and appointed external auditors where appropriate.

The Committee is not a substitute for the management function of internal audit, risk management, governance, or any other sources of assurance. The role of the Committee is to examine these functions and to offer views and recommendations on the way in which these functions are managed and conducted. 

The production and presentation of an annual report is required by the Committee’s Terms of Reference.  The purpose of this report is to outline where the Committee has gained assurance during the year, particularly over areas of governance, risk management, Standards, and internal control.


Membership & Meetings

In accordance with the Constitution, the Audit, Governance and Standards Committee comprises 9 Members (plus 2 non-voting Parish Councillors appointed by the Council for a three-year term of office).

Councillor Harvey continued as Chair of the Committee after being elected on 21 May 2019, with Councillor Adkinson as Vice-Chair until May 2021.   Since then, Councillor Perry was elected as Chair at the 28 July 2021 Audit, Governance and Standards Committee meeting, with Councillor Bartlett being elected as Vice-Chair.

The Council have satisfied themselves that the members of the Committee are competent and have recent and relevant experience.

The Committee met 5 times in 2020/21:

·         29 July 2020

·         14 September 2020

·         16 November 2020

·         18 January 2021

·         15 March 2021

The Committee is supported throughout the year by senior officers and managers of the Council who are regularly present, including:

·         Director of Finance & Business Improvement (Section 151)

·         Head of Audit Partnership and Audit Managers

·         Head of Policy, Communications & Governance

·         Head of Legal Services.

·         Finance Manager

Throughout the year, the Chair and Vice-Chair met with the Director of Finance & Business Improvement and the Head of Audit Partnership, allowing opportunity to discuss any issues in more detail directly.

In addition, the Council’s External Auditors (Grant Thornton) attended each meeting of the Audit Committee during 2020/21.

All the Audit, Governance & Standards Committee agenda papers and minutes are published on the Council’s website, along with video recordings of the meetings.




Over the course of the year the Committee considered, examined, and made decisions on the following areas within its Terms of Reference:

July 2020

September 2020

November 2020

January 2020

March 2021

Draft Model Member Code of Conduct

Complaints received under the Members’ Code of Conduct

Annual Governance Statement Update

Annual Complaints Report

Complaints received under the Members’ Code of Conduct

Annual Governance Statement

Audit, Governance & Standards Committee Annual Report

Data Protection Action Plan – Progress Update

Internal Audit Interim Report

Housing Benefit Subsidy Claim

Annual Internal Audit Report & Opinion

Updated Internal Audit & Assurance Plan

Treasury Management Mid-Year Review

Treasury Management, Investment & Capital Strategies 2021/22

Fraud & Compliance Team Update 2019/20

Treasury Management Annual Review 2019/20

Accounts 2019/20

External Audit Update

External Auditor’s Annual Audit Letter

Annual Risk Management Report

Accounts 2019/20

Budget Strategy – Risk Assessment Update

Budget Strategy – Risk Assessment Update

External Audit – Progress Report & Sector Update

Internal Audit & Assurance Plan 2021/22

Budget Strategy – Risk Assessment Update



Budget Strategy – Risk Assessment Update

External Auditor’s Audit Plan 2020/21





Budget Strategy – Risk Assessment Update



Internal Audit Activity

External Audit Activity

Finance Activity

Standards Activity

Governance Activity




Sources of Assurance

In drawing our conclusion this year, we have gained assurance from the following sources:

The work undertaken by our Internal Audit Partnership

·         The Council received a Sound Annual Opinion from the Head of Audit Partnership. This opinion considers the overall adequacy of the internal control, governance, and risk management arrangements for the Council

·         Throughout the year we have been regularly informed of the outcomes of internal audit work and audit findings.

·         The annual audit and assurance plan considered key risks for the coming year, including alignment to the Councils Corporate Risks. The plan provided assurance over the skills, expertise, and resources within the internal audit partnership to deliver the plan and respond to the audit needs of the Council.  This plan was adjusted in September to account for the impact of the Covid-19 pandemic on key risks and resources available.

Finance and Governance information

·         The Committee reviewed and provided challenge on the annual accounts prior to approval and publication and receives financial updates throughout the year. Specifically, budget risks are updated, reported, and scrutinised quarterly.

·         The Annual Governance Statement supported the overall conclusion of the Head of Audit Annual Opinion, with actions identified for improvements. The Committee has been kept up to date on progress to implement these actions and provided challenge to ensure outcomes are being delivered.

·         The Committee reviewed the Treasury Management, Capital and Investment Strategies.

·         The annual risk management report provides an update on the effectiveness of the Council’s risk framework and the controls in place to manage corporate and operational risks.

·         Specific assurances were sought by the Committee on data management, including continued monitoring of compliance with GDPR and changes to related policies.

The work of our External Auditors – Grant Thornton

·         The External Auditors presented an unqualified opinion for the Councils financial statements and value form money conclusion for 2019/20. The Committee provided effective challenge to the External Auditors throughout the year during their regular updates.




Dealing with complaints about Council Members

The Localism Act 2011 obliges Councils to have both a Code of Conduct and a procedure for dealing with allegations that a member has breached that Code of Conduct. The Act further provides that the District/Borough Council for the area is responsible for dealing with complaints against all the Parish and Town Councillors for its area as well as dealing with complaints against Borough Councillors.

Full Council, at its meeting on 5 July 2012, resolved to adopt the ‘Kent Procedures’ for dealing with Member Complaints. Under the procedures, authority is delegated to the Monitoring Officer to make an initial assessment of the complaint (in consultation with the Independent Person appointed under the provisions of the Localism Act 2011) and, if appropriate, the Monitoring Officer will seek to resolve the complaint informally. If it is decided the complaint should be investigated, then following that investigation a Sub- Committee of the Audit, Governance and Standards Committee will determine the complaint.

The Localism Act 2011 sets out the role of the Independent Person in any procedures designed for investigating allegations that a member has breached the Code of Conduct. The Independent Person’s views must be sought and considered prior to a decision being made following an investigation into a complaint. The Independent Person’s views may also be sought at other times during the process. The appointment of the Council’s Independent Person, Ms Barbara Varney, was extended in July 2020 for 1 year, by the Council.

During the year ending 31 March 2021, 8 new Member complaints were received. One of the complaints related to a Borough Councillor and no breach of the Code was established with the remaining complaints relating to parish councillors.

·         4 failed to meet the local assessment criteria

·         1 was resolved through informal resolution

·         1 resulted in further training being offered

·         1 complaint received no response to a request for more detailed information


Based on the activity during the year, the Audit, Governance and Standards Committee can demonstrate it has appropriately and effectively fulfilled its duties during 2020/21. The Committee has continued to work in partnership with the Council’s Internal Auditors, Finance Team, Senior Officers and appointed External Auditors to provide independent assurance to the Council on a wide range of risk, governance, internal control and conducts related issues.






Appendix I

Terms of Reference & Responsibilities

Audit Activity

a)      To consider the Head of Internal Audit Partnership’s annual report and opinion, and a summary of Internal Audit activity (actual and proposed) and the level of assurance it can give over the Council’s corporate governance arrangements. 

b)      To consider reports dealing with the management and performance of Internal Audit Services, including consideration and endorsement of the Strategic Internal Audit Plan and any report on agreed recommendations not implemented within a reasonable timescale; and the Internal Audit Charter.

c)      To consider the External Auditor’s Annual Audit Letter, relevant reports, and any other report or recommendation to those charged with governance; and ensure that the Council has satisfactorily addressed all issues raised. To comment on the scope and depth of external audit work and to ensure it gives value for money. 

d)      To review and approve the annual statement of accounts.  Specifically to consider whether appropriate accounting policies have been followed and whether there are concerns arising from the financial statements or from the audit that need to be brought to the attention of the Policy and Resources Committee or Council.

e)      Consider and review the effectiveness of the Treasury Management Strategy, Investment Strategy, Medium Term Financial Strategy, Annual Report and Mid-Year review and make recommendations to the Policy and Resources Committee and Council. 

f)       Recommend and monitor the effectiveness of the Council's Counter-Fraud and Corruption Strategy.



a)      To maintain a financial overview of the operation of Council’s Constitution in respect of contract procedure rules, financial regulations and codes of conduct and behaviour.

b)      In conjunction with Policy and Resources Committee to monitor the effective development and operation of risk management and corporate governance in the Council to ensure that strategically the risk management and corporate governance arrangements protect the Council.

c)      To monitor Council policies on ‘Raising Concerns at Work’ (Whistleblowing') and the ‘Anti-fraud and corruption’ strategy. 

d)      To oversee the production of the authority’s Annual Governance Statement and to agree its adoption.

e)      The Council’s arrangements for corporate governance and agreeing necessary actions to ensure compliance with best practice and high standards of ethics and probity. This Committee will receive the annual review of the Local Code of Corporate Governance and may make recommendations to Policy and Resources Committee for proposed amendments, as necessary. 

f)       To consider whether safeguards are in place to secure the Council’s compliance with its own and other published standards and controls.








a)      The promotion and maintenance of high standards of conduct within the Council. 

b)      To advise the Council on the adoption or revision of its Codes of Conduct. 

c)      To monitor and advise the Council about the operation of its Codes of Conduct in the light of best practice, and changes in the law, including in relation to gifts and hospitality and the declaration of interests.

d)      Assistance to Councillors, Parish Councillors and co-opted members of the authority to observe the Code of Conduct. 

e)      To ensure that all Councillors have access to training in Governance, Audit and the Councillor Code of Conduct; that this training is actively promoted; and that Councillors are aware of the standards expected under the Councils Codes and Protocols. 

f)       To deal with complaints that Councillors of the Borough Council and Parish Councils may have broken the Councillor Code of Conduct.

g)      Following a formal investigation and where the Monitoring Officer’s investigation concludes that there has been a breach of the Code of Conduct a hearing into the matter will be undertaken. See the procedure at 4.2 of the Constitution for dealing with complaints that a Councillor has breached the Code of Conduct. 

h)      Advice on the effectiveness of the above procedures and any proposed changes. 

i)        Grant of dispensations to Councillors with disclosable pecuniary interests and other significant interests, in accordance with the provisions of the Localism Act 2011.