Members were informed that the Accounting Policies report before the Committee provided details of the financial and budget policy framework under which the Council operated and as was set out in the Council’s constitution. Financial procedure rules were provided at Appendix B. In addition, it was reported that as Redditch and Bromsgrove Councils shared their service arrangements and had both been served with Section 24 Notice for non-delivery of 2020-21 Statement of Accounts, a final report undertaken by the Bromsgrove District Council Audit Task Group into the issuing of Section 24 Statement at Bromsgrove was provided for Members in the agenda document pack.
It was deemed necessary for updates on Accounting Policies to become a standard item at Audit, Governance and Standards Committee meetings in order to facilitate Members’ assurance around Council’s financial governance arrangements. It was further noted that internal finance team protocols were included in the agenda document pack, and these documents defined performance expectations of the Council’s service areas. It was noted that training staff to appropriate level, especially in purchasing and invoicing, was essential. Currently training was provided for staff, particularly in finance, around closure of accounts and staff interest in this training meant four separate sessions had been arranged.
Members were informed that six Audit, Governance and Standards Committee meetings would take place in 2023-24 which would enable Members to be updated on each of the key financial legislative deliverable. This would result in Committee receiving oversight of all financial aspects of the Council.
Officers reported that of the Government Returns that the Council was required to submit, the Revenue Outturn Estimates remained a significant risk until the draft 2020-21 Accounts had been submitted. At this point the 2020-21 RO forms could be produced. It was noted that most other Government Returns were now being completed on time; the timely and accurate completion of those returns, however, needed to be embedded within the organisation.
Following the presentation, some Members commented to the effect that recommendations of the Bromsgrove District Council Audit Task Group were logical and sensible. It was suggested in that respect that joint work of the audit committees at Bromsgrove and Redditch could be undertaken, provided that joint overview and scrutiny had been undertaken in the past by the two Councils.
An amendment to the recommendations as proposed in the report was put forward by Councillor Fry. This included a change to recommendation 4 to read that any improvements arising from the recommendations in the Bromsgrove District Council Audit Task Group Report into the issuing of the Section 24 Statement be adopted by the Executive Committee, and an inclusion of an additional recommendation that a formal note of thanks be sent to the Bromsgrove District Council Audit Task Group by the Executive Committee. This amended recommendation was seconded by Councillor Baker-Price.
Members continued to debate this report, made a number of suggestions and asked a number of questions, to which the following responses were provided:
· With regards to implementation of the TechOne Enterprise Resource Management (ERP) system it was stated that an investigation by the Bromsgrove Audit Task Group showed that the staff who carried out its implementation did not have the necessary skillset to carry out this project. Not enough consideration of this was given by Officers responsible for decision-making at the time. It was added that many members of finance staff were put under significant stress in simultaneously undertaking the implementation and completing their ‘day’ jobs, which was a contributing factor to many members of finance staff leaving the organisation.
· It was reported that investigation of the Bromsgrove Audit Task Group revealed other failures in the implementation of the TechOne system:
- It was not realised before agreement was made that TechOne did not have a cash receipting solution in place and instead the company intended to develop this jointly with the Council during implementation phase.
- Issues with the new finance system, for example with cash receipting module, were reported by staff but were not being escalated at senior officer level.
- There were instances where programme actions were reported in the minutes of senior officer meetings as completed but which did not actually take place.
- There was a lack of a Programme Board, approved by the Corporate Management Team, which would monitor the implementation of the finance system.
Some Members asked why TechOne did not take part in the review carried out by the Bromsgrove Audit Task Group, and it was suggested that this was due to conflict of interest that participation in the review would present for the company.
Members queried the reasons why most finance staff members who implemented the system transfer on 8th December 2021 subsequently left the organisation and it was explained that the vast majority of those who left did so because of stress caused by the initial stages of implementing the TechOne ERP system. Those who left were key members of staff who had the knowledge of how the system worked and this knowledge had been lost when they left.
It was highlighted that most features of the TechOne system worked to a good standard and it outperformed competitors in some features.
Following discussion, the amended set of recommendations as proposed by Councillor Fry was put to the vote and was carried.
1) the Accounting Policies being used their Source and associated Governance Arrangements be noted.
2) the Accounting Policies report be considered at each Audit, Governance and Standards Committee meeting to alert Members to possible no compliance issues.
3) Bromsgrove District Council Audit Task Group Report into the issuing of the S24 Statement be noted.
4) any improvements arising from the recommendations in the Bromsgrove District Council Audit Task Group Report into the issuing of Section 24 Statement be adopted by Executive.
5) a formal note of thanks be submitted to the Bromsgrove District Council Audit Task Group.