Agenda and minutes

The Chair welcomed all to the meeting.

Apologies had been received from Councillors Gartside (substitute Councillor Bernstein) and Haroon.

Members of the Audit Committee are asked to consider whether they have an interest in any of the matters on the agenda and, if so, to formally declare that interest.

No Declarations of Interest had been received.

Report from the Director of Finance attached

Audit Completion Report from Mazars attached

2021 -22 Audited Statement of Accounts attached

2022 -23 Audited Statement of Accounts attached

2022 -23 Annual Governance Statement attached

2021 -23 Value for Money Report attached

Audit Strategy and Completion Report attached

Ahead of the update from Karen Murray, Neil Kissock presented a report which outlined the background relating to the Statement of Accounts 2021/22 and 2022/23 and legislated statutory backstop dates of 13^th December 2024 and the relevant documents that needed to be published:

·         The Statement of Accounts together with the Audit Opinion and any certificate

·         The Annual Governance Statement

·         The Narrative Statement (the Council includes these within the Statement of Accounts)

Neil Kissock referred to the Statutory Recommendation relating to the 2021/22 accounts to be issued by the External Auditor and advised that the Council would issue its response and Action Plan and that a special meeting would be arranged early in the New Year for the response and Action Plan to be considered.

Karen Murray in presenting the Audit Completion Report referred to the less than exemplary preparation of reports historically, changes of personnel and lack of corporate memory at the Council, and advised that in terms of 2021/22, Forvis Mazars had been unable to complete the audit as originally planned, in advance of the backstop date of 13^th December. As previously reported, the external auditors needed information relating to the potential presence of Reinforced Autoclaved Aerated Concrete (RAAC) in Council buildings, which the Council had been unable to provide all the information required ahead of the deadline, and without this information, the value of Property, Plant and Equipment could not be confirmed as correctly reflected in the financial statements. This matter was considered pervasive to the financial statements and assurance was unable to obtained required and as such Forvis Mazars intended to disclaim its audit report.

In summary, the audit work had identified a number of significant weaknesses in the Council’s arrangements for ensuring financial sustainability, governance and for improving the economy, efficiency and effectiveness of services, highlighting particularly the Council’s failure to:

·         Properly understand its financial position during 2021/22 and to continue to rely on the use of reserves to support the provision of services

·         Manage risks, including with respect to the existence of RAAC in the Council’s estate

·         Improve internal controls so that weaknesses were identified and reported to management by Internal and External audit and other regulators are addressed promptly

·         Prepare materially accurate financial statements; and

·         Secure action to improve services to children

Therefore, under Paragraph 2 of Schedule 7 of the Local Audit and Accountability Act 2014, it was recommended that the Council should, as a matter of urgency, develop a single Council-wide improvement plan to reflect the transformation and culture change needed across all Council departments to deliver the range, level and quality of services that is financially sustainable. Appropriate management and member oversight is required to ensure the improvement plan is delivering changes that are embedded in the organisation.

The recommendations would be sent to the Secretary of State for Housing, Communities and Local Government on 12^th December 2024,  with the Council required to consider the recommendation at a meeting held before the end of the period of one  ...  view the full minutes text for item AU.41

Report from the Director of Finance attached

2023 -24 Draft Unaudited Statement of Accounts attached

2023 – 24 Draft Annual Governance Statement attached

It was reported that in accordance with the Accounts and Audit Regulations 2015 (as amended) the 2023/24 Draft Unaudited Statement of Accounts were signed by the Interim Deputy Chief Finance Officer (acting S151 Officer) on 31 May 2024 by the deadline and published on the Councils website. However, the Annual Governance Statement was not available by the 31 May 2024 deadline, therefore the Council had been unable to commence the 30-working day period for the Exercise of Public Rights and a delay notice was published on the Council website.

The Accounts and Audit (Amendment) Regulations 2024 came into force on the 30 September 2024, this legislated the statutory backstop dates, including the 2023/24 Statement of Accounts of 28 February 2025. To comply with the backstop date legislation the Council had to publish accountability statements on the website by this backstop date, accountability statements needed to include:

·      The Statement of Accounts together with the Audit Opinion and any certificate.

·      The Annual Governance Statement.

·      The Narrative Statement (the Council includes this within the Statement of Accounts)

To achieve the statutory backstop date of the 28 February 2025, the Council was required to commence the 30-working day period for the Exercise of Public Rights, no later than 16 January 2025. Whilst there is no longer a requirement for those charged with governance to approve the Draft Unaudited Statement of Accounts and Annual Governance Statement, Audit Committee were asked to consider and note the updated 2023/24 Draft Unaudited Statement of Accounts and  Draft 2023/24 Annual Governance Statement ahead of the commencement of the Period for the Exercise of Public Rights. Neil Kissock advised that the final version of the reports would be submitted to the February meeting of the Audit Committee.

The Chair suggested that the Annual Governance Statement (AGS) should contain more narrative on Project Safety Valve, which contained only a one line comment, but which was detailed far more in the Statement of Accounts, and Neil Kissock agreed to include more detail in the final AGS.

Neil Kissock also advised that in terms of the revenue outturn for Children and Young People and an overspend, savings had been identified, but there had been a higher than expected growth in demand, and that more growth in demand would be built in going forwards to reflect demand.

It was agreed:

That the 2023/24 Draft Unaudited Statement of Accounts and 2023/24 Draft Annual Governance Statement be noted.

Ahead of closing the meeting, the Chair gave a brief update on the recruitment of Independent Co-opted Members, advising that two suitable candidates had been identified, following discussions with Neil Kissock and himself, and that a report would be submitted to Council on the appointment of both individuals, requesting Council approval. Presuming Council approval was granted, both Co-opted Members would be invited to attend the February meeting of the Audit Committee.