Agenda item - Grant Thornton Progress Report

Agenda item

Grant Thornton Progress Report

Minutes:

The Executive Director, Finance and Resources explained that the covering report provided details as to why the Statement of Accounts for 2014/15 had been submitted late to the External Auditors and the issues relating to carrying out the Audit were detailed within Grant Thornton’s report.  The accounts had been submitted on Monday 6th July as opposed to the deadline of Wednesday 30th June.  There had been a number of queries outstanding following the Audit which required resolving prior to an opinion on the accounts being presented to Cabinet and Council on 23rd September, it was anticipated that with support from all officers this deadline would be achieved.   Members were assured that the accounts would show a true and fair reflection of the Council’s financial position.

 

The Executive Director, Finance and Resources went on to highlight that the report contained a number of detailed recommendations which would form part of a wider action plan in relation to addressing the issues identified.  This would be considered and discussed in more detail at the Cabinet meeting and then full Council meeting.  It was proposed that the action plan be received by the Audit, Standards and Governance Committee at future meetings and that Members of the Committee receive email updates on a monthly basis in respect of progress being made.

 

Mr. Phil Jones, Engagement Lead, Grant Thornton summarised the report and assured Members that the Council had good financial resilience, whilst highlighting that there were a number of areas which needed to be addressed to ensure the difficulties which had occurred this year, did not occur in the future.  For example, progress needed to be made in respect of strengthening budget arrangements, which was something that Grant Thornton had raised in the previous years.  These were now subject to a Section 11 Recommendation, the aim of which was to strengthen and underpin the initial recommendations and assist with their implementation.

 

During consideration of this report the following items were discussed:

 

·         The significant variances between prior year accounts and this.

·         Lack of consistency of approach and different staff preparing the accounts.

·         The working papers request document provided earlier in the year not being considered and the working papers produced not meeting the required standard.

·         The changes which had been made and the reasons for the variances and the need for the accounts to be re-stated.

·         The timescales in respect of discovering the errors and the accounts being resubmitted.

·         The complexities of local authorities’ accounts as opposed to those of a private company.

·         The inclusion of town centre improvements as capital expenditure.

·         An appeal on business rates for GPs and the impact on the collection fund and general fund.

·         Lessons learned from the difficulties experienced this year.

·         It was confirmed that similar problems had also arisen with the year-end accounts for Redditch Borough Council.

·         The use and significance of a Section 11 Recommendation.  Mr. Jones confirmed that the issues within that recommendation needed to be addressed and the use of a Section 11 provided guidelines on how to take those issues forward.

·         The overall value for money conclusion and areas for consideration.

 

Members were concerned at the staffing issues which had arisen within the Finance Team and led to the current position and questioned whether there were sufficient resources within the team to ensure that the Council was not in a similar situation in the future.  Both the Executive Director, Finance and Resources and Mr. Jones confirmed that these were exceptional circumstances and a culmination of a number of events which had brought about this year’s problems.  The Executive Director, Finance and Resources had not appreciated the problems which the introduction of a new financial ledger would bring, particularly when the staffing problems had then occurred and the introduction of a new chart of accounts and changes to the coding issues had occurred.  The high level action plan which would be put in place would be created with the support of Ms. Zoe Thomas, Manager, Grant Thornton, to ensure that all the issues raised would be addressed.  The Executive Director, Finance and Resources was also in discussions with colleagues at Worcestershire County Council and other districts in respect of possible secondments from other Finance Teams prior to vacant posts being filled.

 

The Grant Thornton report made reference to a Guide to Local Authority Accounts which they had produced and Members requested a copy of this to assist with their understanding of the local authority accounting process.

 

RESOLVED that

 

(a)  Members receive a monthly email update in respect of the Action Plan with the Action Plan also being considered at future meetings of the Audit, Standards and Governance Committee; and

(b)  the Grant Thornton Update Report be noted.

 

Supporting documents: