Agenda item

The Financial Compliance Report was presented which detailed the position regarding legislative reporting requirements and the position on submission of the Council’s Statements of Accounts.

In reference to key legislative reporting requirements to central Government, it was noted that the Council continued to provide the majority of key legislative deliverables within timeframes. The key outstanding returns were the VAT returns and Whole of Government accounts.

It was recapped that although the Council’s VAT returns were now up to date, and, from December 2024 onwards, monthly VAT returns were being submitted to HMRC. Work continued to provide assurance to HMRC regarding VAT return that had been submitted in December 2024, which covered the previous three years. In order to provide additional assurance, the Council had employed an experienced VAT accountant to work alongside the existing VAT consultants, PS Tax. The Council had also arranged mandatory VAT training for all finance department staff and budget managers.

It was reported that the Whole of Government Accounts returns had not been submitted by the Council for a number of years due to delays in producing the Statement of Accounts for years 2020/21 onwards, which followed the introduction of the TechOne system in February 2021. These were no longer required for previous years but remained outstanding for cycle 1 2024/25. It was unlikely that the Council would submit that return by the required deadline as its Accounts for 2023/24 and 2024/25 remained unaudited.

Members were reminded that the Council had closed their Accounts for years 2020/21 and 2022/23, receiving a ‘disclaimer’ audit opinion for these three sets of accounts. For 2023/24 Accounts, the draft accounts were presented for public inspection, which ended on 27 February 2025. The draft 2024/25 Accounts were ready for public consultation on 20 June 2025 in line with timescales set out in the existing Government legislation. The public inspection period end date for this set of accounts was 11 August 2025. The backstop date for having the 2024/25 Accounts audited was 27 February 2026.

The key recent deliverables being achieved by the Council were set out which included the drafting of the Financial Stability Plan following the successful completion of the Financial Improvement Plan, the health check on the TechOne system done in collaboration with the system provider following the successful remedy of the miscodings on the system, and the staff arrangements put in place in the finance department team including the recruitment of a chief accountant and interim staffing arrangements around the senior business partner posts.

The Portfolio Holder for Finance addressed the Committee and stated that the Council was now in a position to move towards medium-term financial planning as exemplified by the Finance Stability Plan replacing the Financial Recovery Plan. Risks nevertheless remained around the TechOne system, robustness of the finance team (in terms of staffing), and the external sign-off of the Council’s Statements of Accounts.

RESOLVED that

1)    The Committee note the position in relation to the delivery of the 2024/25 Accounts and the auditing of the 2023/24 Accounts.

2)    The Committee note that the 2024/25 Accounts public consultation period finished on 11 August 2025.

3)    The Committee note the position in regard to other financial indicators set out in this report.

4)    The current position with the Council’s new External Auditor, Ernst and Young, be noted.

5)    The position on the Financial Stability Plan following the successful delivery of the Financial Improvement Plan be noted.