Agenda and minutes

The minutes of the meeting of the Audit, Standards and Governance Committee held on 14^th July 2025 were submitted for Members’ consideration.

It was felt by some Members that the announcement at the start of the minutes concerning the appointment of Councillor E.M.S. Gray to the Board may not have be in keeping with the constitution and expressed dissatisfaction.

Also during consideration of the item, Members requested the following to the minutes:

Page 5, Minute No. 1/25 to add, “During the voting process Councillor D.J. Nicholl proposed that Councillor S. Ammar be appointed Chairman of the Committee.  This was seconded by Councillor J.W. Robinson”. 

Page 5, Minute No. 2/25 typographical error, which read:

“Councillor D. Hopkins proposed that Councillor S.T. Nock be appointed Vice-Chairman of the Committee.  This was seconded by Councillor B. Kumar”. 

Which should read:

“Councillor B. Kumar proposed that Councillor S.T. Nock be appointed Vice-Chairman of the Committee.  This was seconded by Councillor D. Hopkins”. 

It was also reported by Councillor S.R. Colella that his apologies had been omitted from the minutes.

The Chairman initiated discussions with the Committee regarding the use of acronyms within the audit report, noting that several had been used without explanation and requested clarification for the benefit of all attendees.  The external auditors for the Council, Ernst and Young (EY) acknowledged the oversight and committed to ensuring that acronyms would be explained throughout future reporting. 

The Committee were informed in further detail that the Ministry of Housing, Communities and Local Government (MHCLG) was a government department involved in coordinating the reset and recovery of the local audit system, particularly in relation to backstop dates and clearing audit backlogs.  The National Audit Office (NAO) was a Central Government body responsible for setting the Code of Audit Practice, which outlined the roles and responsibilities of auditors.  The Financial Reporting Council (FRC) acted as the regulator for audit firms, inspecting their work to ensure high quality audits, who had also contributed to the sector wide reset and recovery efforts.

The report provided a background and status update on the 2023/24 audit for the Council and context regarding the Government’s legislation aimed at clearing the backlog of local audits and establishing a sustainable audit system.

It was noted that the Council had missed Phase One of the recovery deadline, as the 2021/22 and 2022/23 accounts were signed in January 2025, beyond the 13th December 2024 backstop date. This delay impacted the 2023/24 accounts, which were not published until mid-January 2025, with the inspection period ending on 27th February 2025. Consequently, Phase Two of the recovery had not been met.

The audit commenced in June 2025, following onboarding delays. Challenges were encountered which included management resources being prioritised toward meeting the 30th June 2025 deadline for publishing 2024/25 draft statements, conflicting annual leave schedules and delays in the provision of requested information.

It was acknowledged that the Council had not been subject to audit for several years, which had impacted capacity and created challenges for the management team, however, efforts to address the issues was ongoing.

Despite the disclaimer of opinion on the 2023/24 financial statements, EY confirmed that auditing standards required certain procedures to be performed, which were currently underway. The local regulations also required Value For Money (VFM) work to be completed, which was also in progress.

Following the presentation Members raised the following queries:

• Several governance issues were highlighted on page 40 of the report, including high staff turnover, public correspondence and challenges with the finance system, particularly around compliance with taxation laws, which required further explanation. - EY explained that these issues related to significant weaknesses identified by Grant Thornton in the 2022/23 financial reporting.  Members were also informed that high staff turnover had led to a loss of corporate knowledge, particularly due to interim arrangements in statutory positions during the 2020–2024 period.  Correspondence had been received from a member of the public outside the formal inspection period which raised concerns about governance arrangements, including fraud policies. The audit team was assessing whether follow-up procedures were necessary and  ...  view the full minutes text for item 21/25

The Committee received an update from the Assistant Director of Finance and Customer Services on progress made in response to the Section 24 Statement and the Council’s financial recovery and stabilisation efforts.

It was reported that the Council had made good progress overall, with key deliverables such as the Quarter 1 Finance Performance and Treasury Management reports completed. However, 2 national returns remained outstanding which included VAT returns and Whole of Government Accounts (WGA).

Significant work had been undertaken with HMRC and tax advisors (PS Tax) with monthly VAT returns being submitted. A VAT accountant had been appointed and mandatory VAT training was being rolled out across the finance team, with introductory training planned for the wider organisation.

The WGA had not been produced for several years, in line with many other authorities. A substantial mapping exercise was planned to bring the Council back on track.

The 2023/24 and 2024/25 accounts were expected to be disclaimed due to audit timelines.  Public consultation on the 2024/25 accounts had closed on 11th August 2025 and discussions with EY were ongoing.

The Council had transitioned to clearing routine accounts on a monthly basis, marking a significant step forward from previous backlog clearance efforts.

Following the presentation, Members and Officers discussed the following:

• Adequacy of the Tech One finance system. -  Officers confirmed that a detailed health check was underway to assess whether the systems configuration could be improved or required partial reinstallation.  Lessons had been learned from the initial implementation and the Council aimed to have a fully functioning system in place, ahead of Local Government Reorganisation (LGR). 

• Concerns were raised about past issues with the Tech One system and the importance of rigorous testing before adopting systems in the future were emphasised. Members urged Officers to “test to break” and avoid pioneering unproven software.

• Members noted that Worcestershire County Council (WCC) had adopted the Tech One system.  However, any future unitary authority would likely implement a new system rather than inherit existing installations.

A verbal update on the financial stabilisation plan was provided by the Deputy Chief Executive and Chief Finance Officer. The recovery phase had placed significant strain on the finance team and stabilisation was the priority. Several interim appointments had been made to strengthen the team including Chief Accountant (interim), Finance Services Manager, 2 Senior Finance Business Partners (permanent), 2 Finance Business Partners (interim), VAT Specialist, Tech One Systems Manager and Tech One Technical Support Officer.

A Project Manager was still to be recruited who would oversee major workstreams. The Council would utilise its finance stabilisation reserve to fund these temporary arrangements. A report outlining the structure and associated budget pressures was being prepared.

Following the financial stabilisation update, Members made the following comments:

• A request for an organisational chart of the finance team, showing filled and vacant posts. - Officers confirmed that this would be shared once it was reviewed by Senior Management and Leadership.
• The Chair and Members expressed appreciation for the finance team’s efforts, acknowledging the pressure  ...  view the full minutes text for item 23/25

The Committee received the Annual Governance Statement (AGS) for the financial year ending 31st March 2025. It was explained that the AGS was a statutory requirement under the Accounts and Audit Regulations 2015 and provided a corporate overview of governance arrangements. Although it formed part of the Statement of Accounts, it was not a financial report.

The AGS was based on principles of good governance set out by The Chartered Institute of Public Finance and Accountancy (CIPFA) and The Society of Local Authority Chief Executives and Senior Managers (SOLACE) and covered systems, processes, culture, values, strategic objectives, stewardship of public funds and VFM. It also included internal controls, risk management, performance monitoring, compliance with the constitution, decision-making processes, scrutiny functions and contributions from internal and external audit.

It was noted that the AGS identified significant governance issues, including delayed accounts and the Section 24 statements. The delay in signing off the 2023/24 accounts was attributed to the withdrawal of the Council’s previous external auditors Bishop Fleming and the onboarding of EY. The Council had made representations to Central Government explaining the delay, which were accepted.

The Committee was informed that although disclaimer opinions were expected for 2023/24 and 2024/25, each audit cycle was providing increasing levels of assurance. The Council was working towards achieving a full audit opinion in future years.

Members raised several points as follows:

• The AGS should include a summary of significant issues at the beginning of the report and proposed a comparative table showing progress from the previous year. - Officers agreed to include a summary of key movements in future reporting.
• The lack of an appeals processes for complaints and the need for safeguards to ensure fair treatment was raised by Members. 
• The governance basis for the AGS was also discussed, referencing outdated documentation on the Council’s website. Officers acknowledged the need to update the website and confirmed that the AGS was based on best practice guidance from CIPFA and SOLACE.
• The Portfolio Holder suggested adding a future agenda item to invite the Monitoring Officer to explain the standards regime and councillor conduct procedures.
• A policy was suggested to avoid adopting untested software systems, referencing past issues with the Tech One financial system.  - Officers noted that lessons had been learned and would be passed on to any future unitary authority. 

The Chairman addressed the Board and requested that the Committee consider the draft terms of reference for the Risk Champion role, following the previous postholder stepping down and requests for a draft role description and proposal to be reported back to Committee. 

The purpose of the role was outlined, acting as a key advocate for effective risk management within the Council, supporting the development of risk awareness and providing a link between the Council’s risk management function and elected members.

Discussion points were as follows:

• The previous Risk Champion shared experience in the role noting that while reports had been produced and worked closely with Officers, the role lacked impact and visibility.  Reports did not reach Cabinet and therefore questioned the expectations of the role and its effectiveness. 
• A Member suggested reviewing previous reports and learning from past work rather than starting afresh. 
• It was confirmed that the Risk Champion had not attended the Council’s Corporate Risk Management Officer Group, although this had been proposed.
• A Member raised the longstanding issue of the absence of a lay member on the Audit Committee, which was common practice in other councils.  It was also suggested that the role of Risk Champion could be fulfilled by a lay member, though acknowledged that Local Government Reorganisation (LGR) may limit feasibility in the short term. 
• The Portfolio Holder noted the challenge of the Risk Champion operating outside the Council’s operational structure and suggested that departmental Risk Champions might be more effective and queried how many currently existed.  Members also discussed whether the role should focus solely on risks to the Council or also include risks to individual members, such as reputational or safety concerns. 
• The Deputy Chief Executive and Chief Finance Officer explained the function of the Corporate Risk Management Officer Group, with meetings scheduled every 6–8 weeks and reviewed departmental and corporate risks, mitigation strategies and residual risk ratings and confirmed that the Risk Champion could be invited to attend these meetings.

Following consideration of the item, a recommendation was proposed by Councillor S.R. Colella.  The recommendation was:

The Committee invite Group Leaders to consult with their members to identify interest in taking on the Risk Champion role.  The draft terms of reference to be shared, with flexibility for the appointed member to propose amendments, subject to the Committee’s approval.

The recommendation was proposed by Councillor S.R. Colella and seconded by Councillor S. Ammar.

On being put to the vote the recommendation was carried.