Agenda item

The Deputy Leader / Portfolio Holder for Finance, Town Centres and Growth introduced the report on the final Statement of Accounts, External Audit Annual Report and Audit Findings Report for the financial year 2024-25.

The External Auditor (KMPG) reminded members of the procedure in relation to the finalisation and publication of the documents.

Cllr Lewis wondered whether the Council’s financial resilience and reserves were sufficient considering the strategic risks that had been outlined.

The External Auditor (KMPG) advised that the audit was looking at processes and arrangements in place to manage risks and that the figures themselves were determined the Council.

Cllr Lewis also asked if assurance could be given that the Council had the right capacity and governance in place to deliver the capital projects in 2025-26 without further slippage.

The Service Director for Finance (S 151 Officer) responded that a review was currently being undertaken and the situation was much better than that of the previous year. While some delays had to be factored in the projects were on their way to be completed.

Cllr Stubbs enquired about the steps that could be taken to manage the volatility of the collection fund and accurate forecasting and budgeting for the future.

The Service Director for Finance (S 151 Officer) advised that the Council Tax collection fund for 2024/25 was as accurate as it would ever get and that the nature of business rates made that part of the collection fund volatile.

A surplus largely due to a reduction in the appeals provision had been recorded the previous year. This was due to the end of the cycle re-valuations. The surplus that had been generated was paid into a business rates volatility reserve for which a balance was being retained to address volatility and to offset any deficit in future periods.

Cllr Stubbs asked about the governance and risk management processes, including the measures in place to monitor and mitigate the risk as well as the role of the Financial Efficiency Board.

The Service Director for Finance (S 151 Officer) responded that the incomes losses were addressed through both a proportion of the General Fund Reserve as well as an allowance in the MTFS (Medium Term Financial Strategy). The situation was improving and the risks decreasing.

Cllr Reece wondered about the implications of the pension scheme surplus and related liability resulting from the asset ceiling adjustment on the long-term financial planning and potential impact on future contributions.

The Service Director for Finance (S 151 Officer) advised that the pension fund was in a significant surplus position and had enabled the Council to reduce its pension contributions.

Cllr Reece asked how the devolution reorganisation would impact the Council’s assets and liabilities.

The Service Director for Finance (S 151 Officer) responded that consultants had been hired and the result of their work would be brought in to Full Council on 19^th November.

Cllr Whieldon wished to acknowledge the progress made since the previous year and thank both auditors and the team for their input.

Cllr Lewis enquired about the consequences of the £1.5 million from the business rate reset over the next three year for the Council’s financial sustainability and asked what contingencies were in place.

The Service Director for Finance (S 151 Officer) said that the team was currently in the middle of the budget preparation process with the first Draft Savings and Medium-Term Financial Strategy to be delivered shortly to Cabinet and the Finance, Assets and Performance Scrutiny Committee.

Cllr Lewis asked about the recurring underspent in the Capital programme and what steps were being taken to improve the forecasting of delivery and monitoring of projects to ensure budgets were realistic and achievable.

The Service Director for Finance (S 151 Officer) responded that there had been a midyear estimate and that on this occasion the service directors had been asked to review what capital projects they had and when they anticipated the money would be spent in order to profile their spend in the current and future years.

Cllr Stubbs wondered about the partnership with Capital and Centric and how the Council was ensuring that governance arrangements remain robust and that any risks were effectively managed through the delivery life cycle.

The Service Director for Finance (S 151 Officer) said that all projects were subject to a full risk assessment and modelling was undertaken to make sure they were affordable. A regular dialogue with the contractor and legal advisers was also maintained throughout the delivery of projects.

Cllr Stubbs asked what internal controls were in place to ensure timely and accurate updates especially in the light of the material misstatement identified and adjusted in the defined benefit obligation valuation.

The Service Director for Finance (S 151 Officer) advised that there hadn’t been any misstatement. An estimated report had been produced for the purpose of issuing the draft statement of accounts on time. The actual report had subsequently followed with adjustments.

It had been agreed that going forward and with the Chair’s permission the draft accounts would be submitted to the Committee at the end of June with the actual figures so that an estimate report would not be needed.

Cllr Reece wondered how the Council was ensuring that its small procurement team had sufficient capacity and expertise to manage the increasing volume and complexity of the contracts.

The Service Director for Legal and Governance (Monitoring Officer) commented that additional resources were to be expected in the coming months, with a full-time procurement officer joining the team to work alongside the Council’s experienced procurement manager. External input from law firms was also received as required as well as expertise from the County Council.

Cllr Lewis asked what assurance could be provided that the Council had robust internal controls in place to review and validate asset valuations in light of the control deficiency identified around valuation work in papers and formula errors.

The Service Director for Finance (S 151 Officer) responded that the team had both experienced valuers and an experienced property manager who reviewed all of the valuations. Regular meetings were scheduled during the closedown process to review the assumptions made.

Cllr Reece enquired about steps taken to ensure full compliance with the Council's declaration of interest process given that some member declarations were missing and could impact the completeness of related party disclosures.

The Service Director for Finance (S 151 Officer) advised that a robust process was in place however this relied on information shared by members about their appointments which was correlated with that held by the Companies House.

The Service Director for Legal and Governance (Monitoring Officer) added that it was members’ responsibility to do their due diligence in declaring these matters and that members and officers should work together to be as transparent as possible.

Cllr Stubbs asked who was ultimately responsible in case of information not communicated.

The Service Director for Legal and Governance (Monitoring Officer) reiterated that it was a legal obligation for members to declare any interests, adding that failure to do so could result in a criminal inquiry.

Cllr Whieldon supported officers’ comments on the importance for members to take responsibility for their own actions and respect the Code of Conduct.

Resolved:     1. That the final Statement of Accounts for the financial year 2024/25 be received.

2. That the External Audit Annual Report for the financial year 2024/25 be received.

3. That the Audit Findings Report (ISA 260 report) for the financial year 2024/25 be received.

4. That the issue of the representation letter from the Service Director for Finance (Section 151 Officer) confirming that its responsibilities in connection with the audit of the Statement of Accounts have been met, be agreed.

Watch the debate here