Agenda item

Report of Bishop Fleming, external auditors

Nathan Coughlin (NC) of Bishop Fleming introduced the first of his three reports, which close the audit process for 2024-25, highlighting the summary of output from the external audit process and providing more detailed work around value for money (VFM).  This considers the arrangements the council has in place around three areas – financial stability, governance, and improvement in the 3 E’s (economy, efficiency and effectiveness).

-       regarding VFM, in the previous annual report, six points were raised, although not highlighted as significant risks or weaknesses.  None of these have been closed in full, but progress has been made;

-       one significant weakness was raised under the governance heading around the accounts process. The draft single entity accounts were not published by the statutory deadline and then required amendments as well as the addition of group figures to get to a final set of accounts.  This was published in March, past the backstop date, so no overall opinion could be provided.  Management have procedures in place to improve the process next year. 

A Member commented that this was at least partly due to last year’s exceptional circumstances, and the Director of Finance confirmed this.  She said with new resource in the team, more planning and delegation of tasks, and discussions with the auditors about prioritisation and areas of focus, the team is getting up to speed and is already ahead of its position last year.

A Member wondered how realistic the statutory deadline for producing group accounts was, particularly as airport accounts weren’t signed off until after that date. Also, on a practical level, he suggested that if the council’s single entity accounts were ready but the group accounts to follow at a later date, this is unlikely to have a practical impact on the audit as there would be work on the single entity accounts to get on with and consolidation would be a relatively quick job.  He asked if there are any practical implications to not hitting the statutory deadline for group accounts.

NC responded as follows:

-       regarding the practical point, last year played out in that way, and work started around council numbers, but they were not final in several areas due to the exceptional circumstances.  He would expect to see a process or mechanism where draft numbers can be produced and a full set of accounts published, even if these are modified later through the audit processes;

-       the other six findings are not rated as significant weaknesses at this stage and progress has been made, though it has not been possible to close them off entirely.  The short-term borrowing position has improved since the previous year, and ongoing capital projects will continue to be closely monitored.  This is raised to ensure it is kept as an area of focus as much as anything;

-       part of the mapping of risks to objectives was delayed but the strategy has been refreshed, allowing the opportunity to make sure the risks register maps into that;

-       regarding procurement processes and contract management, action around putting an overarching strategy is work in progress;

-       some points were rolled forward from the previous auditors around the inability to hit savings targets, improved from the previous year but not quite closed off.   The council is not far from achieving its targets, with £.06m rolled into the following year – so it is slippage more than anything else, having identified process and savings;

-       workforce strategy was raised as an issue with the plan to put an overarching strategy in place, previously deferred on account of CBH coming in-house.  This needs to be looked at;

-       finally partnership strategy and register – management comments demonstrate that progress has been made post 2024-25, and this will be looked at again as part of the VFM work for 2025-26.

A Member noted a lot of discussion around efficiency savings targets had taken place, but that NC’s comments confirmed a decent return for a public service organisation.  He also noted that the auditors were satisfied that there was no significant weaknesses in council sustainability arrangements, and with budget setting and budgetary control arrangements.  It also sets the record clear on the production of financial statements.