Agenda item

This report presents the 2023/24 Statement of Accounts, Grant Thornton’s Audit Findings Report, letter of representation and the Auditor’s Annual Report following the external audit.

The Committee received a report presenting the 2023/24 Statement of Accounts, Grant Thornton’s Audit Findings Report, letter of representation and the Auditor’s Annual Report following the External Audit.

Councillor Kate Chinn provided a verbal statement to the Committee.

The following matters were considered:

a)            Thanks. The Director of Corporate Services (S151) expressed their thanks to the finance team and congratulations on all their hard work.

b)            Governance and Transparency. A Member of the Committeeraised that the external audit report appears broadly favourable and that is a credit to the officers who contributed. The Member highlighted that the one area of concern regarding governance and transparency and explained that from their experience this pertains to culture and not performance of the Council. The Member invited officers to comment on the area and the future given impending Local Government Reorganisation. The Chair noted the comment and suggested a response could be provided to Committee Members following the meeting.

c)            Subsidiary Company. A Member of the Committee raised that item IR 6 on page 25, talks about the activities of the Council’s subsidiary company, and if it should ever expand, for example, through the acquisition of more properties, recruiting independent board members is something the Council should consider. The Member highlighted that the management action stated that there is no current intention to expand the activity of the Council’s subsidiary company, and if it were to happen, consideration would be given to review the current board and the appointment of independent members. The Member stated that the Council has declared its option to borrow further and expressed this might mean spending a lot more money on property, which would likely impact EEPIC, therefore, will the Council be appointing an independent member to the board as recommended in the report. The Director of Corporate Services (S151) informed the Committee that the recommendation has been taken on board and explained the 25/26 budget talks about agreeing the Council’s borrowing limits, as opposed to actually taking out the borrowing. The Member stated that by raising the borrowing limits, it is indicating that the Council intends to spend the additional borrowing the Council could be afforded. The Director of Corporate Services (S151) agreed that if the borrowing was to actually take place, there would be a move to put in the capacity described. The Chief Accountant explained that there was no change in the proposed borrowing limit compared with previous years, therefore limits were not being raise. If the Council were to borrow the money, it would have no impact on EEPIC as the potential borrowing is for the Council-owned property, not EEPIC-owned, therefore EEPIC would remain with the same assets as currently.

d)            Management Response. A Member of the Committee raised concerns regarding the management response on page 90 of the appendix 2 report. The Member expressed dissatisfaction with the response from the Strategic Leadership Team and explained that they did not have a positive experience with transparency at the Council. The Chair noted the comment and invited the Member to provide further information on any queries so they could be progressed following the meeting.

e)            Questions. A Member of the Committee expressed their discontent that questions submitted in advance to Strategy and Resources Committee and responses provided, were not circulated to all Committee Members. The Chair noted the comment.

f)             Rubberstamp Committee. A Member of the Committee thanked the External Auditors for their report. The Member continued to ask if the Committee are being asked to rubberstamp the response provided by the Strategic Leadership Team. The Member expressed their disappointment that the management response does not acknowledge the issue raised by the external auditors. The Chair confirmed that the Committee are being asked to agree the management actions as set out in recommendation 3 and 6. The Director of Corporate Services (S151) explained that the characterisation of the response of the Strategic Leadership Team, is not accurate. The Director of Corporate Services (S151) expressed that the Strategic Leadership Team acknowledge the recommendation and take it on board and fully understand the need for transparency and appreciate there is more work to be done to provide that as much as possible. The Member pointed out that the management response does not provide any actions to be taken to provide further transparency, despite the fact other management responses do set out actions to be taken to achieve the recommendations of the External Auditors. The Member stated they would be unable to support the management action as written. The Member asked the representative from the Council’s External Auditor if they have made evidenced recommendations before and had them dismissed by the Council’s senior leadership. The representative from the Council’s External Auditor confirmed that key recommendations on significant weaknesses are somewhat common and acknowledged that a review of the management’s response will take place over the course of the next audit cycle and that will form an assessment which will be put in front of the Committee to discuss. The External Auditor confirmed that they would take that issue forward into their work for the 24/25 audit and will be able to share if sufficient work has happened to address the issue raised. The Chair informed the Committee that they could vote against the recommendations on the management actions, if they see fit.

g)            Town Hall Move. A Member of the Committee raised that the recommendation in the report states that Members should be kept up to date with the progress of the Town Hall Move project. The Member expressed that they do not feel this is being adequately done at the moment and they would not consider themselves kept up to date with the progress of the project. The Chair noted the comments.

h)            Contract Standing Orders and Procurement. A Member of the Committee raised that the recommendation in the report states that Contract exception should be reported to Audit and Scrutiny annually to increase transparency on procurement arrangements. The Member asked why there is not an action listed to bring that information to the A&S Committee on the recommendation of the external auditors. The Member asked for assurance from the Strategic Leadership Team that specific actions and responses to the recommendations of the external auditors could be provided. Another Member expressed their disappointed that the management response did not agree to take the report to A&S Committee. The Chair noted the comments.

i)             Management actions. The Vice Chair asked if it caused issues for the signing off of the external audit if the Committee did not agree recommendations 3 and 6. The Chair informed the Committee that all recommendations would be voted on separately. The Assistant Director of Corporate Services asked Finance Officers if there is a time constraint on when everything needs to be signed off by the Committee. The External Auditor explained that the accounts need to be signed off by the 28 of February. The External Auditor raised that if there is an issue with management responses, it could be dealt with outside of the Committee Meeting. The Chair invited Committee Members to raise how they would like to proceed. A Member of the Committee raised that they would like the Strategic Leadership Team to review the management responses and take into account the comments raised at the Meeting.

j)             Receiving documents. A Member of the Committee asked for comments as to why there were instances of slow responses and difficulty getting documents to the external auditors. The Chair noted the comments and informed the Committee that a response would be provided following the meeting.

Councillor Alex Coley proposed that recommendation 3 and 6 were sent back to the Strategic Leadership Team, to take into account the comments of the Audit and Scrutiny Committee on the management actions and responses to the External Audit findings and report.

This proposal was seconded by Councillor Alan Williamson.

The proposal was agreed (7 for, and the Chair not voting).

Recommendation 3 and 6 were removed and not voted on by the Committee;

(3)      Agree the management action in response to the audit recommendations detailed at Appendix A of the Audit Findings report;

(6)      Agree the management actions in response to the recommendations in the Auditor’s Annual Report (VfM).

Following consideration, the Committee unanimously resolved to:

(1)      Approve the Statement of Accounts for the year ended 31 March 2024;

(2)      Receive the Audit Findings for 2023/24;

(4)      Authorise and agree that the Chair or Vice Chair of Audit and Scrutiny Committee and the Chief Finance Officer sign the Statement of Accounts and Letter of Representation on behalf of the Council;

(5)      Nominate and authorise the Chief Finance Officer, in consultation with the Chair or Vice Chair of Audit & Scrutiny Committee, to make any further amendments to the 2023/24 Statement of Accounts;