Issue - meetings

Treasury Management Annual Report 2017/18 and Treasury Management Quarter 1 Update 2018/19

Meeting: 11/07/2018 - Audit Committee (Item 18)

18 Treasury Management Annual Report 2017/18 and Treasury Management Quarter 1 Update 2018/19 pdf icon PDF 107 KB

Additional documents:

Decision:

(a)       That the draft Treasury Management Annual Report 2017/18 be noted, with no matters to be drawn to the attention of Cabinet on 17 July 2018; and

 

(b)       That the Treasury Management 2018/19 first quarter update be noted.

Minutes:

The Interim Finance Manager - Technical Accountancy presented the Annual Report on the Council’s Treasury Management Policy, Strategy and Practices 2017/18 for review and recommendation to Cabinet.

 

During a summary of the key points of the Annual Report, the most significant issue of note was the increase in Bank Rate in November 2017.  On section 3, Members received a revised sheet showing the updated position on borrowing activity in 2017/18 which reflected the approach for continued short-term borrowing.  Officers would be working with the Treasury Management advisors over the Summer to assess options for potential long-term loans.  The Committee’s attention was drawn to a single breach in the Council’s policy where human error had led to an investment being made above the prescribed limit.  In considering the level of risk, early redemption charge and damage to reputational risk, it had been resolved not to call back the deal and the investment had been left for ten days with no financial loss to the Council.

 

As part of an update on Treasury Management activity in the first quarter of 2018/19, an amended long-term borrowing analysis (Appendix 4) was circulated, with the removal of two loans paid in April 2018.

 

In advance of considering the Treasury Management Strategy for the following year, a training session by the Treasury Management Advisors would be scheduled for all Members in January 2019.

 

Councillor Johnson sought information on FMS, the loan provider for Lenders Option Borrowers Option (LOBOs) and whether the loans were held in the UK or Europe, on which officers agreed to provide a separate response.  In response to comments, the Interim Finance Manager spoke about the approach to rescheduling debt across the portfolio in consultation with the Treasury Management advisors.  On the implications of Brexit, officers would engage with the advisors to establish the best strategy as information was made available.

 

Sally Ellis asked what steps had been taken to prevent any further policy breaches.  The Interim Finance Manager explained the circumstances leading to the incident and advised that the system had been developed to strengthen controls by flagging up where an investment above the prescribed limit was being submitted for approval.  The Corporate Finance Manager said that whilst the incident was unfortunate, this was an isolated case amongst a number of investments and that the team had engaged with Internal Audit over the controls now in place.

 

The Internal Audit Manager advised that she was satisfied with the improved controls to address this one-off incident and that the effectiveness of the controls would be tested as part of the next audit.

 

As further assurance, the Chief Executive said that he would follow this up and suggested that future reports include an assurance statement that controls had been followed.

 

RESOLVED:

 

(a)       That the draft Treasury Management Annual Report 2017/18 be noted, with no matters to be drawn to the attention of Cabinet on 17 July 2018; and

 

(b)       That the Treasury Management 2018/19 first quarter update be noted.