A report from the Interim Executive Director of Resources and Regulation is attached.
The Head of Head of Financial Management presented a report from the Interim Executive Director of Resources and Regulation updating Members of the Committee on the Authority’s financial position in line with the Committee’s Statement of Purpose to ‘provide independent scrutiny of the authority’s exposure to risk and the control environment’. The report focussed on the revenue budget, balance sheet, procurement activity and the minimum level of balances.
The report indicated that the Authority is projecting an overspend of £2.608m for the year based on actual spending commitments and income information as at 31 December 2018.
Andrew explained that the Authority’s financial position is continually monitored throughout the year;
· monthly by service management teams, Senior Leadership Team and the Cabinet Member for Finance and Housing.
· Detailed quarterly corporate monitoring reports based on the position at June, September, December and March (year-end) are considered by the Senior Leadership Team, the Cabinet, Joint Cabinet/SLT meetings and the Overview & Scrutiny Committee.
It was also explained that Executive Directors were a lot more accountable for their own budgets, particularly since the Local Government Association review of finance earlier in the year.
Those present were given the opportunity to ask questions and the following points were raised:-
Andrew explained that some of this would be where contracts have come to an end and had been renegotiated at a more favourable cost or service.
Councillor Whitby asked that the Head of Strategic Procurement be invited to the next meeting of the Audit Committee to explain the procurement activity indicated in more detail.
Andrew stated that he would pass this query onto the Interim Executive Director of Resources and Regulation for a response.
Andrew explained that the minimum level of balances to be retained based on a risk assessment of potential unforeseen circumstances, was deducted from the starting balance, as was the forecast overspend, which then left the forecasted available balance at year end.
Andrew explained that the Golden Rules related to issues such as maintaining a minimum level of balances, using reserves as one offs only, pressures and savings assessed on a 3 year basis and how the general fund balance is managed. The Golden Rules state that the use of reserves to support the on-going revenue budget must be in the short term only and supported by a robust strategy to address underlying pressures in the Council’s cost base.
Andrew explained that the report provided information at month 9 whereas the figures that Councillor Rafiq was referring to were for a full 12 month period.
That the contents of the report be noted.