Agenda item

Report from the Section 151 Officer is attached

The Director of Finance presented a report giving a progress update from the Council to the Statutory Recommendation received from the External Auditor under schedule 7 of the Local Audit and Accountability Act 2014.

 

It was explained that the Council’s external Auditors, Forvis Mazars, presented the outcome of their audit work in relation to their judgements in the area of the Council’s Value for Money arrangements for the 2021/22 and 2022/23 financial years to the December Audit Committee meeting.

 

They identified three significant weaknesses in the Council’s arrangements. These weaknesses are across all three reporting criteria that they are required to consider under the Code of Audit Practise, namely; financial sustainability, governance and for improving the economy, efficiency and effectiveness of services.

 

Forvis Mazars determined that use of their statutory reporting powers under the Local Audit Accountability Act 2014 was necessary and issued a statutory recommendation formally to the Chief Executive on 12 December 2024. They recommended that “The Council should, as a matter of urgency, develop a comprehensive Council wide improvement plan to reflect the transformation and cultural change needed across all departments, to ensure the Council can deliver the range, level and quality of services that it deems appropriate and within its statutory responsibilities in a financially sustainable way. Appropriate management and member oversight is required to ensure the improvement plan is delivering changes that are embedded into the organisation." A response was provided by the Council to the January 2025 Audit Committee meeting which included the publication and approval of an improvement action plan which was also subsequently approved at Council.

 

It was explained that there had been significant progress made within the expected target dates across the plan.

 

The plan was split into the following areas

 

• Financial Resilience (including financial strategy)
• Finance Capacity and Transformation (mostly concerned with the finance restructure)
• Governance and compliance including Estate Management and Leadership and Governance Arrangements

 

Finance resilience - Actions due to be complete by quarter 4 had been completed. Budget timetable for 2025-26 including plans for zero based budget approach had been agreed. Development of budget proposals for 2026-27 on track for October 25 deadline.

 

Finance Capacity and Transformation – All actions complete or on track apart from recruitment to phase 1 of the finance restructure as awaiting completion of 30 day consultation.

 

Governance and Compliance – All actions complete or on track for associated deadlines. All assurance boards set up and have met  with agreed terms of reference and forward work plans. Highlight reporting from the boards is being reported at ELT and Members Assurance Group.

 

It was explained that the only outstanding item was in relation to the required RAAC surveys of the Council’s estate. All RAAC assessments and surveys had been completed including council owned buildings with leases under 30 years and no further RAAC risk identified. There are also a number of buildings that are on longer land leases of above 30 years which are not Council owned and have therefore been determined not to be the responsibility of the Council in terms of maintenance, insurance and in undertaking RAAC risk assessments. For completeness, work is being undertaken on a sample of longer land leases in April to confirm this position.

 

Members of the Audit Committee were given the opportunity to ask questions and make comments and the following points were raised:

 

• Councillor Bernstein referred to the fact that there were no elected members present at the meeting to answer questions in relation to the report and stated that he felt this was disappointing as it should be member led and owned.

 

Councillor Moss reported that the Leader and Councillor Thorpe would be attending the next meeting of the Audit Committee in July.

 

The Director of Finance explained that there had been strong progress made and oversight with Members. The Leader and Cabinet Member had confirmed attendance at the July meeting.

 

It was also reported that the Improvement Plan will be reported to the Overview and Scrutiny Committee.

 

• Councillor FitzGerald referred to the finance restructure and the upgrade to systems and budgeting and financial management processes and asked what assurances there were that the plan can be delivered whilst the restructure and upgrades were being done.

 

The Director of Finance confirmed that they were both big agendas. The Cabinet had awarded the Unit4 upgrade to a consultant with a strong track record in the area. The system was not being moved to an entirely new system but to a cloud system. There was strong governance in place and monthly meetings were being held.

 

The Director of Law and Governance explained that programme boards had been established and the Director of Transformation reviewed the finance board’s delivery. The Board reported to the Executive Leadership Team and the Members’ Assurance Groups.

 

• Councillor Rubinstein referred to the RAAC surveys that had been carried out on all Council owned buildings and asked about the leased to 3^rd party buildings being sampled.

 

Councillor Rubinstein asked how many buildings were involved, how the sampling was being carried out, what would happen if a building did have RAAC and what would happen if a building failed.

 

The Director of Law and Governance reported that the long leases over 30 years could refer to land with no buildings and land that had multiple agreements associated with it. The Head of Land and Property was working with 2 surveyors who were supported by 2 legal officers to carry out samples relating to age profiles from each decade. These would be reviewed when they reach 30 – 35%. The Work had started and to date nothing had been found that the Council would be responsible for. The work would continue until assurance had been reached.

 

The Director of Law and Governance explained that all education properties were RAAC free and that schools leased to other voluntary organisations had reported RAAC free to the DFE.

 

• Councillor Moss referred to the final action in the plan was dated October 2025 but the plan was due to run until the end of February 2026. He asked what would be included towards the end of the plan.

 

The Director of Finance explained that this would be linked to the ability to build the budget with the Zero Based Budget reporting to the November Cabinet and the 2026 budget being set in February 2026.

 

It was also explained that the Unit 4 programme upgrade is scheduled for 18 months up to April 2026. This will also need to be factored int o the plan. The associated culture change in using the system as it is meant to be used to ensure that it works how it should for the organisation will need to be established through training and supporting the teams using the systems. Workshops had been rolled out and were being well received.

 

The Director of Finance stated that future committees can consider what happens to the plan and how it moves forward.

 

• Councillor FitzGerald stated that the people within the organisation were the ones that were pushing the work through and the Council must ensure that that they are looked after and supported.

 

The Executive Director (Strategy and Transformation) stated that staff welfare was built into the plan with revised PDR and induction processes and documentation and a review of the employee support programme which was available to all employees.

 

• Councillor Hayes referred to the ongoing consultation in relation to the finance restructure and asked if the response rate was known.

 

The Director of Finance explained that the responses would not be reviewed until the consultation had closed but the consultation was concerning 4 staff at a higher level within the team.

 

• Councillor Moss indicated that the actions which sat under the Director of Law and Governance were all completed and asked if this were the case.

 

The Director of Law and Governance stated that this was correct but there would still be the task of making sure that they were effective, that the highlight reports were capturing the right information and there was a clear line to Members. Effectiveness was being tracked to ensure that there was compliance across the Council.

 

The Executive Director (Strategy and Transformation) also confirmed that the Councils External Auditors would be monitoring the plan and progress made.

 

• Councillor Moss referred to the implementation of recommendations from internal audit reports and asked what was being done to ensure that the recommendations were implemented.

 

The Director of Law and Governance explained that the assurance boards were tracking and monitoring recommendations and if they weren’t being completed, they were asking why not. There were fewer recommendations being reported during the second audits.

 

• Councillor Moss suggested to including a revised date in an additional column if a completion date had passed.

 

It was agreed:

 

1. That the progress detailed in the action plan update be noted.

 

2. That the Audit Committee continue to endorse the action plan ensuring Member oversight through Audit and Overview and Scrutiny committees.