Agenda item

The Committee received an update from the Assistant Director of Finance and Customer Services on progress made for the Financial Compliance Report.  Members were advised that it was important that the processes put in place following the issuing of the Section 24 Statement continued via this quarterly Financial Compliance Report.

The report detailed that the Council were complying with national requirements.  Local requirements had been delivered when the budget was approved on the 19^th February, particularly in relation to the Treasury Indicators which had continued with the delivery of the Quarter 2 Finance and Performance Report and the Treasury Report.

The key returns for Value Added Tax (VAT) and the Whole of Government Accounts (WOGA) had not been delivered to date.  Significant work had been undertaken by the Council’s Tax advisors Public Sector Tax, in liaison with His Majesty’s Revenue and Customs, in order for the Council to return to normal VAT reporting, with final version working papers provided to HMRC on the 19^th December 2024.  Monthly returns were being made from December 2024 onwards.  Additional resources had been established to strengthen the finance team in relation to VAT, including a VAT accountant.  Mandatory VAT training had taken place for all finance staff and would be rolled out across non finance staff within the organisation.

The WOGA had not been produced for several years and therefore required a substantial mapping exercise.  It was unlikely that the Council would be able to achieve this before the Cycle 2 deadline of 3^rd October 2026, however, the Council had begun work to achieve a submission over the next three months.  The Tech One financial system was also being upgraded to version 25B.

The Council’s position on the key closure deliverables was also presented to Members for years 2020/21, 2021/22, 2022/23 and 2024/25.

A Finance Stability Plan had been developed which covered several areas including the Tech One finance system, financial regulations and structure of the finance team:

·         A review of the Tech One system had taken place which included a health check with results nearing completion and was expected to include reinstallation of certain elements of the system with suggested fixes to other areas.  Any revised implementation would be completed in conjunction with Tech One and would be supported by a full in-house project team to lead on this. 

·         The Council was stabilising its finance team through the immediate recruitment of several interim staff which were in place to support the finance team.  It was noted that a Chief Accountant had been recruited, there was now an additional Senior Finance Business Partner, and two new business partners with a third being recruited.

Key deliverables since the last meeting included:

·         A Finance Stability Plan which had been developed to cover a number of areas including the Tech One system, financial regulations and structure of the finance team.

·         The Quarter 2 Finance and Performance Report had been produced along with the Quarter 2 Treasury Management Report.

After the presentation Members discussed the following:

• Would there be significant interruptions to the day to day running of work with the reimplementation of the Tech One system?  In response it was advised that an appropriate detailed plan was being put in place to minimise disruption.
• If there was a specific officer in post to carry out VAT returns?  Officers advised that once the backlog of work had been completed, dedicated resources internally were being considered.  Members were also advised that VAT returns were divided between Bromsgrove District Council and Redditch Borough Council accordingly.
• What were the specific significant risks in relation to the impact of the imposed “backstop position”?  In response it was advised that clear guidelines had not been established by Central Government but the Council was working towards a partial disclaimer.
• An update for the Council seeking an independent Government Committee member was requested.  In response it was explained that costings were being reviewed but that an update would be reported back to the Board.

No areas of concern within the key compliance report were noted for consideration.

RESOLVED that

1)    The Committee note the position in relation to the delivery of the 2024/25 Accounts and the auditing of the 2023/24 accounts.

2)    The Committee note the position in regard to other financial indicators set out in this report.

3)    Note the position on the Financial Stability Plan.