To enable Members to consider the Audit Findings Report 2013/14 from Grant Thornton.
(Report to follow)
Members were asked to consider Grant Thornton’s Audit Findings report for the Council for the year ended 31st March 2014. A revised Letter of Representation was tabled by Officers which included an additional ‘Specific Representation’ section on the final page.
It was noted that the External Auditors had issued a qualified opinion on the Value for Money conclusion in the report. This was due to concerns being raised around financial resilience. The main issues leading to this conclusion being:
· weaknesses in medium-to long-term financial planning, specifically the absence of an up-to-date, sustainable 3-5 year medium-term financial plan;
· lack of robust plans to deliver savings required to balance the budget; and
· planned use of reserves to fund recurrent expenditure that was not, for example, part of planned invest to save initiatives.
Officers were currently working though a number of the report recommendations and would be bringing back an action plan for these at a later date. Heads of Service and budget holders were working through the detail of their budgets across the Council’s strategic purposes, with a number of costs having already been identified for further detailed work. Managers were also developing savings which were as a result of reducing waste in their systems (unnecessary procedures and processes which currently cost the Council money), and were reducing the cost of the enabling services (services that did not add value to the Council’s customers). Heads of Service were also looking at how they could deliver their services differently by bringing in alternative service providers or providing more service for a reduced cost.
Significant concerns were raised by some Members on the Value for Money conclusion and lack of a current medium-to long-term financial plan, together with unfilled vacancies and the grouping together of ICT costs. In relation to unfilled vacancies, the Portfolio Holder stated that there was a push to remove these and that this issue would also be addressed by the service reviews which were taking place. Officers agreed to check if they could provide Members with information on the number of unfilled vacancies and how long these had been vacant for. Officers added that all savings would need to be considered, with the majority of the Council’s costs being staff-related and with voluntary redundancy being offered through a formal process.
The Portfolio Holder for Corporate Management highlighted the positive elements of the External Auditors report and explained the approach which was being taken with the Council’s financial planning. He had requested that Officers bring an update on the external auditor’s recommendations and progress on actions against these to each meeting of the Committee. Service reviews were ongoing and it was felt prudent to develop a 3-year financial plan based on the outcomes of the work currently being undertaken as this would allow for an informed and sustainable budget based on new and improved ways of working. Up-front savings could easily be identified by simply cutting jobs or closing community centres, however such hasty cuts could impact on services which residents relied on and create more issues in the future.
The Independent Member, who was also one of the Lead Risk Members on the Committee, queried whether the Council had a robust process for managing change and whether there was a strategic change team in place who managed performance measures. Officers advised that the Vanguard model for re-design was being used by the Council as part of the transformation process, and that the Corporate Management and Senior Management Teams were responsible for driving change and managing measures at strategic level. In order to gain more of an insight into the process it was agreed that the Independent Member would meet with the Portfolio Holder and relevant Officers to further discuss this.
Officers advised that they would be reporting to the Executive Committee in October with outline plans on how future savings would be achieved. The External Auditors commended the work which was currently being undertaken by Officers on the medium-term financial plan, and added that any savings as a consequence of systems thinking and transformation needed to be clearly deliverable and transparent.
the Audit Findings Report 2013/14 from Grant Thornton be approved.