Agenda item

The Interim Section 151 Officer presented the Finance Improvement Recovery Plan for Members’ consideration.

Cabinet was informed that a new finance system had been introduced in February 2021 to replace an old system.  There had been a number of technical problems experienced with the introduction of this new system.  There had subsequently been a deterioration in the Council’s financial position including in relation to the following areas:

·             The accounts for 2020/21 and 2021/22 had not yet been submitted.

·             Financial data had not been monitored during the 2021/22 financial year.

·             Key documentation had not been submitted to the Government.

·             Take up of the system across the Finance team and other service users had been incomplete.

·             There had been a loss of experienced staff from the Financial Services team, which had impacted on capacity within the department.

However, in 2022, a significant amount of work had been undertaken to address these problems.  A lot of progress had been made with resolving issues with the new finance system, with problems remaining with the cash receipting part of the system only.  Many Government returns had now been submitted and a lot of new staff had been recruited into the Finance Department.  Quarterly monitoring reports had been reintroduced and for the first time these were being combined with performance monitoring data.  Risk monitoring reports were also scheduled for the consideration of Cabinet and the Audit, Standards and Governance Committee throughout the year.  Once issues with the cash receipting part of the new system had been resolved, it would be possible for the Council to submit the authority’s 2020/21 accounts.

The Council had been liaising closely with the external auditors, Grant Thornton, throughout and had been providing updates on progress that was being made to resolve the issues identified.  It was noted that the external auditors had had to postpone their Value for Money audit of the Council due to capacity issues within their team and this would therefore follow later in the municipal year.  Recruitment to local government finance and auditing roles remained challenging across the country.

Following the presentation of the report, Members discussed the information that had been provided and in doing so thanked Officers, particularly the Interim Section 151 Officer and the Head of Finance and Customer Services for their hard work to address the issues that had been identified.  Members noted that a significant amount of progress had been made in 2022 to address the issues and expressed their hopes that the remaining problems with the new finance system would be resolved shortly.

During consideration of this item, Members were advised that this report had been considered at a meeting of the Finance and Budget Working Group.  Concerns were raised by the Chairman of this group, Councillor C. Hotham, about the amount of funding that the Council had allocated to purchasing the new finance system and the extent to which the authority would receive compensation for the problems that had been experienced.  Officers explained that a reduced rate had been negotiated with the supplier in November 2021. The Council was working with other authorities in the country using the same finance system and had learned lessons from partner organisations about improvements that could have been made to the implementation of the new system.

RESOLVED that

1)          Progress made on the following 8 key tasks for financial recovery be noted:

a)          Financial Strategies

b)          Revenue and Capital Monitoring

c)          Closure

d)          Returns

e)          Projects

f)           Systems

g)          Documentation and Training

h)          Resources

2)          The work still required to move back to a best practice operation and the associated timetable for completion of this work be noted.