Audit, Governance & Standards Committee

Annual Report

September 2023

Introduction by Chairman of Audit, Governance and Standards Committee

I became Chair of the Audit, Governance and Standards Committee in 2023, following my previous role as the Vice-Chair of the committee in 2022/23 and it is my pleasure to introduce the annual report. The report provides an overview of the Committee’s activity during the Municipal Year 2022/23.

The Council continues to face challenges from the impact of the cost-of-living crisis and rising inflation brought on by the war in Ukraine. As a committee, we have maintained our focus on the issues facing the Council from a risk, control, and governance perspective.  This report looks back and gives us opportunity to reflect on the activity and achievements of the Committee during the Municipal Year 2022/23.

The Committee has discharged its responsibility to provide independent assurance on the adequacy of the Council’s risk management framework and the associated control environment.  We have also provided robust scrutiny and challenge of the Authority’s financial performance. 

During 2022/23 the Committee met five times and I was pleased to note, among the highlights, consideration of the Council’s risk management processes and a positive opinion on the Council’s control and governance from our internal auditors.

I would like to take this opportunity to thank Members and Officers that have supported the Committee over the last year. Their professionalism, integrity, and openness have helped us to discuss, challenge and debate key issues and agree solutions and improvements where appropriate to do so.

Councillor Martin Cox – Audit, Governance and Standards Committee Chairman

Purpose of the Committee

The Audit, Governance and Standards Committee operates in accordance with the Audit Committees, Practical Guidance for Local Authorities.  This guidance (updated in 2022) sets out the purpose of an Audit Committee and is published by the Chartered Institute of Public Finance (CIPFA). The guidance states:

Audit Committees are a key component of an authority’s governance framework. Their purpose is to provide an independent and high-level focus on the adequacy of governance, risk and control arrangements. The committee’s role in ensuring that there is sufficient assurance over governance risk and control gives greater confidence to all those charged with governance that arrangements are effective.

The committee has oversight of both internal and external audit together wth the financial and governance reports, helping to ensure that there are adequate arrangements in place for both internal challenge and public accountability.

At Maidstone, the role of the 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 the Committee also consider Member conduct and complaints. The Committee’s stated purpose is:

The promotion and maintenance of high standards of Councillor and Officer conduct within the Council, adoption and reviewing the Council’s Annual Governance Statement; independent assurance of the adequacy of the financial and risk management framework and the associated control environment, independent review of the authority’s financial and non-financial performance to the extent that it affects the authority’s exposure to risk and weakens the control environment, and to oversee the financial reporting process.

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 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

During 2022/23 the Audit, Governance and Standards Committee was comprised of nine Members (plus two non-voting Parish Councillors appointed by the Council for a three-year term of office) and met five times. 

The Committee is supported throughout the year by senior officers and managers of the Council who are regularly present.  In addition, the Council’s External Auditors (Grant Thornton) regularly attend meetings of the Committee.

The following table outlines Member and Officer attendance at 2022/23 Audit, Governance and Standards Committee meetings.

All Committee agendas, papers and minutes are available on the Council’s website.

Activity

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

Sources of Assurance

The Audit, Governance and Standards Committee have drawn on a variety of sources of assurance to fulfil their responsibilities.  During 2022/23 assurance from the following sources was considered:

Dealing with complaints about Council Members

It is a requirement under the Localism Act 2011 that all Councils adopt a Code of Conduct and that the Code adopted must be based upon the Nolan Principles of Conduct in Public Life. The current Members’ Code of Conduct (“the Code”) for Maidstone Borough Council is set out in the Constitution.

The Localism Act 2011 requirement to adopt a Code of Conduct also applied to all Parish Councils. Most Parish Councils in the Maidstone area have adopted a similar Code of Conduct to the Borough Council, based on a Kent wide model. A few Parish Councils have adopted their own Code.

Under the Localism Act 2011 Maidstone Borough Council is responsible for dealing with any complaints made under the various Codes of Conduct throughout the Maidstone area.

The Constitution stipulates that oversight of Code of Conduct complaints is part of the remit of the Audit, Governance and Standards Committee.

During the year ending 31 March 2023, 5 new Member complaints were received. All of the complaints related to a Parish / Town Councillor. Two of these complaints were investigated and no breach of the Code was established, and the remaining three were being considered by the Monitoring Officer.  

Conclusion

The Audit, Governance and Standards Committee has worked in partnership with the Council’s Internal and External Auditors and received support from Officers.  This has provided robust and effective independent assurance to the Council on a wide range of risk, governance and internal control issues.

The Audit Committee can demonstrate that it has appropriately and effectively fulfilled its duties during 2022/23 as set out in the respective minutes.