Agenda item

The report has been attached together with a list of the recommendations arising from the meeting of the Audit, Standards and Governance Committee that took place on 9^th November 2022, at which this report was considered.

The Interim Section 151 Officer presented a report on the subject of the Section 24 Notice that had been issued by the Council’s external auditors, Grant Thornton, to the Council.

In 2021, the Council had experienced a number of issues that had resulted in the non-submission of the authority’s accounts for 2020-21.  The Council had been working hard to address these issues, starting with work on the Financial Recovery Plan and various reports and monitoring updates had been presented for Members’ consideration on this subject at meetings of the Audit, Standards and Governance Committee, Cabinet and the Finance and Budget Working Group.  A lot of progress had been achieved, including through the introduction of combined financial and performance monitoring reports, which were prepared and presented on a quarterly basis, and the provision of regular risk monitoring reports to the Audit, Standards and Governance Committee and Cabinet.

There had been a number of key issues that had impacted on the non-submission of the 2020-21 accounts including:

·             Problems with the new finance Tech1 system, particularly with the cash receipting part of the system.

·             High turnover of staff from the Financial Services department.

·             The Covid-19 pandemic.

The external auditors were aware that the Council had made a lot of progress but had concluded that a Section 24 Notice needed to be issued to the authority in relation to the non-submission of the accounts.  The Council had resolved the issues with the cash receipting part of the Tech1 system by the date of the Cabinet meeting and it was anticipated that the authority would be in a position to submit the 2020-21 accounts prior to the Council meeting on 7^th December 2022.

Members subsequently discussed the report in detail and commented on the discussions that had occurred when the Audit, Standards and Governance Committee had considered the report at a meeting on 9^th November 2022.  It was noted that some Members of the Committee had voted against the Section 24 Notice and questions were raised about whether this was a viable course of action and what the repercussions could be for this action.  Officers explained that the key point was to ensure that the 2020-21 accounts were submitted as soon as possible.  Once this occurred, all of the recommendations detailed in both the Section 24 Notice and the Interim External Auditor’s Annual Report 2020-21 would have been resolved.

Reference was made to the wording of the recommendation detailed in the report and Members noted that whilst all Councillors might be minded to approve the Section 24 Notice, some might not feel comfortable supporting the management responses.  In this context, it was suggested that it might have been more appropriate for there to have been two recommendations on this subject made by the Audit, Standards and Governance Committee.  However, whilst it was acknowledged that Members could consider proposing this in two parts at the Council meeting, it was important to ensure that the Cabinet considered the Audit, Standards and Governance Committee’s recommendation and that there was consistency in the arrangements for reporting on to Council.

RESOLVED to note the Audit, Standards and Governance Committee’s recommendation that the Section 24 Statutory Recommendation is accepted and that Council review the recommendation, endorse the actions included in the management responses which form the rectification process required as per legislation.