Agenda item

Jon Roberts (Grant Thornton External Auditor) presented the report and explained that the report covered two periods 2021/22 & 2022/23.  He stated auditors follow the NAO (National Audit Office) framework which sets out practice and guidance with a narrative, commentary and observations.  He explained the hierarchy of findings which included the statutory recommendations - of which there were none; the key recommendations – which included the DSG and its recovery plan under the safety valve programme; and 15 improvement recommendations – that provided a narrative of the opportunities to improve in line with best practice.

In relation to risk assessments, there were two set out and one was upheld – the arrangements for managing the DSG recovery plan - and the other had no significant weakness.  It was a positive report and it was hoped that the scrutiny was appreciated.

The following points were made during questions:

·  Councillor Lucy Hodge – were links to other Committees were being picked up.  In respect of financial sustainability, the Business Change Hub had been reported to scrutiny (page 262);

·  further detail would be appreciated in the Reserves table;

·  the majority of movement was the Covid reserves which were down, though the Council had protection against unplanned shocks;

·  the Section 151 Officer reported that reserve balances were up and some of this related to grants.  If grants were not spent then money would be returned to the government;

·  the section 25 statement went to all directors for horizon scanning, looking at demand pressures to ensure that enough reserves were held in case of unplanned risk;

·  the Head of Financial Management confirmed that £12.5m was the target level of unearmarked reserves, although the year end balance could fluctuate as it includes carry forward of revenue underspends;

·  Councillor George Leach – the financial statement audit goes through the reserves in detail;

·  Councillor David Biddleston – every year the earmarked reserves are reappraised looking at the long-term and the balance.  If not used they can be released;

·  Councillor Lucy Hodge – it would be helpful for Members to see the Corporate Risk Register;

·  Aequus would be addressing other groups including the political groups and the external auditors would report on progress in the future;

·  Councillor Malcolm Treby – in respect of conclusions from any actions that weren’t followed up, the recommendations were tracked and there was an option to raise an issue (page 24-25);

·  Councillor Malcolm Treby – page 266 management would brief the Committee on the response to the confidential item;

·  the Director – One West would report to the Committee regarding contract waivers and why these were needed;

·  Councillor David Biddleston – the Committee role was to be a critical friend and there was a recovery plan and safety valve for the DSG.  A number of other Councils had the same issue.  This period the external auditors had done a ‘deep dive’ to ensure previous concerns were addressed;

·  Councillor Lucy Hodge – governance – the Section 151 Officer stated that there was a Capital Strategy Group who looked at governance, best practice and management of the capital programme.

RESOLVED to note the Annual Report including the VFM conclusions and the recommendations arising.