Agenda item

The Head of Finance and Customer Services presented the Finance Compliance Report and in doing so noted that presentation of this report was part of the Financial Recovery Programme agreed by the Executive Committee in September 2022. The report was to be presented at each meeting of the Committee, detailing the progress in fulfilling the legislative requirements and progress on the 2020-21 audit process. It was further noted that following the Council’s participation in the Corporate Peer Challenge, which took place in March 2023, the Executive Committee agreed to implement the recommendations of the Peer Challenge.

With regards to the 2020-21 closure of accounts process, it was reported that the External Auditors had restarted their work on the Council’s take-on balances from July 2023. It was noted that provision of the Draft 2020-21 Accounts for Audit was dependent on the External Auditors confirmation that they had approved take-on balances at both Councils (Redditch and Bromsgrove). It was anticipated that the audit would take place over September and October 2023 with the audit of 2020-21 Accounts to be concluded by November 2023. The timelines for External Audit sign-off of the following years’ accounts was given as May/June 2024 and November 2024 for 2021-22 and 2022-23 Accounts respectively.

It was noted that significant delays in the external auditing of local government accounts continued to be a major issue and the Department for Levelling Up, Housing and Communities (DLUHC) was investigating how this could be remedied. Any solutions identified might lead to an increase in the number of qualified statements across the sector in the short-term. It was reported that the Council would be providing a response to the DLUHC consultation into local audit framework.

In relation to key legislative deliverables, Members noted that the Capital Outturn Reports for 2020-21 and 2021-22 had recently been submitted. The key returns that had not been delivered were the Revenue Outturn forms for 2020-21 and 2021-22 and VAT returns which were dependent on the closure of accounts. Although the Government now allowed these returns to be completed based on estimates, the level of uncertainty due to the issues with the Council’s cash receipting had necessitated that these returns should not be submitted until the External Auditors sign off the Council’s take on balances and the Council provides the draft accounts to Audit for each

Council (Redditch and Bromsgrove).

Officers reported that the TechOne system had now been upgraded from version 20b to 23a. This upgrade would provide access to more functionality and resolve a number of issues that were being experienced which had been resolved in later versions of TechOne. Members were informed that Redditch and Bromsgrove were the only councils in the UK using the company’s cash receipting module and that the upgrade to version 23a related to cash receipting functionality and not the whole system.

In terms of procurement, it was stated that the new ‘No Compliance No Order’ process had been live since April 2023 and many departments were now proactively getting quotations for lower value works, with the aim being to minimise the number of orders going to the procurement team.

Following the report presentation, a comment was made to the effect that elected members would like more assurance about the transparency of Council procurement from private sector firms in the context of recent high-profile cases at other local authorities. In response, it was stated that the Council had mechanisms in place to ensure procurement was transparent including the ‘no compliance no order’ method. This policy required that all purchase orders had to have contracts attached to them in order to be actioned. In addition, the procurement team maintained an oversight of the Council’s procurement and all performance monitoring reports going forward would include a list of upcoming procurements going out for tender.

The inclusion of penalty clauses in contracts to enable compensation in case of significant project overruns was discussed and it was commented that whilst the Council needed to be careful about the inclusion of penalty clauses within contracts from the legal standpoint, Members were assured that all Council contracts included appropriate checks and balances.

Members took the opportunity to commend the Bromsgrove Audit Task Group report, the recommendations of which were approved for implementation by the Executive Committee on 13^th June 2023. In relation to that report, it was highlighted that all elected members needed to be kept informed about the TechOne system development on a regular basis to ensure that lessons had been learned.

The Portfolio Holder for Finance and Enabling addressed the Committee and in doing so concurred with Committee Members in commending the Audit Task Group report recommendations. He commented that one of the report recommendations agreed by the Executive Committee was for a permanent Project Management Office to be set up at Redditch Borough Council in order to support the full range of projects undertaken by the Council.

In relation to the key decision procurement thresholds, it was recognised that a higher threshold for key decision procurement would provide focus for Members to examine the major contracts and ensure that all procurements above the threshold were listed as key decisions on the Executive Committee’s forward plan/work programme. It was noted additionally that there was a contracts register in place and all spending over £500 was published on the Council’s website and updated on a monthly basis. 

RESOLVED that

the progress on the 2020-21 Audit process be noted.