Report to follow.
Minutes:
The Committee noted that the Council’s External Auditors were required under Section 20(1)(c) of the Local Audit and Accountability Act 2014 to satisfy themselves that the Council had made proper arrangements for securing economy, efficiency and effectiveness in the use of its resources.
The code of Audit Practice issued by the National Audit Office required the external Auditors, Grant Thornton, to report to the Council any commentary relating to proper arrangements, reporting all significant matters that come to their attention.
This was the first year the External Auditors had been required to report their findings in this way and had issued a report covering both 2020-21 and 2021-22.
It was noted that this report had been due for consideration last year, but it had been withdrawn due to the housing maintenance fraud investigation. However, in September 2023, the Committee did consider a letter from the External Auditors to the s151 Officer setting out the various recommendations contained in the report now before the Committee.
The report had identified significant weakness in arrangements and key recommendations identified in both Financial Sustainability and Governance in both 2020-21 and 2021-22, and no significant weakness in arrangements identified but recommendations made in respect of improving economy, efficiency, and effectiveness in both years.
The audit of the 2020-21 financial statements had been completed and Grant Thornton intended to issue an unqualified audit opinion. Their findings were set out in Appendix 1 to the report. The audit of the 2021-22 accounts had not commenced following the publication of draft accounts in August 2022.
Management response to the findings where weaknesses and recommendations had been identified were set out in Appendix 2 to the report for the Committee to note.
Financial Sustainability was described as arrangements for ensuring the Council could continue to deliver services. This included planning resources to ensure adequate finances and maintain sustainable levels of spending over the medium term (3-5 years).
Governance was described as arrangements for ensuring the Council makes appropriate decisions in the right way. This included arrangements for budget setting and management, risk management and ensuring the Council made decisions based on appropriate information.
Improving economy, efficiency and effectiveness was described as arrangements for improving the way the Council delivered its services. This included arrangements for understanding costs and delivering efficiencies and improving outcomes for service users.
During the debate, the Committee made the following points:
· The external auditor’s report had provided a very good summary of the Council’s overall position. The critical impact that the pandemic and Future Guildford had on the organisation, together with the long-standing governance issues, was reiterated.
· The risk to which the Council was being exposed in relation to North Downs Housing (NDH) should it not receive all monies due was highlighted. The Committee was informed that details of the potential impact that would have on the Council’s balance sheet, together with proposed timescale for the dissolution of NDH and the holding company would be reported to the Executive Shareholder and Trustee Committee in November.
Having considered the report, the Committee
RESOLVED: That the management responses to the key recommendations and the improvement recommendations as set out in Appendix 2 to the report submitted to the Committee, be noted.
Reason:
To comply with the Accounts and Audit Regulations 2015, the Council must respond to the recommendations.