Agenda item

(Interim Strategic Director) To consider the attached report (AGC-012-2019/20).

The interim Chief Accountant presented a report on the Final Accounts Improvement Plan.

The interim Chief Accountant reminded the Committee that the conditional report issued by the Council’s External Auditors, Deloitte, on 6 September 2019 highlighted several weaknesses in the arrangements for the preparation of the Statutory Statement of Accounts and supporting working papers. Although at that time, there was yet to be found any significant misstatement in the Accounts, a final view could not be given by the External Auditor until all matters had been resolved. These weaknesses were due to many factors that had subsequently been immediately resolved as part of an on-going improvement programme by the Finance Department. There were proposals to further improve the process of Final Account preparation for 2019/20 and subsequent years.

The interim Chief Accountant reported that significant improvements had already been made and none of the planned improvement actions was either late or incomplete at this stage. Further improvements were planned, including the conducting of a dummy Account Closure exercise in January 2020, for the first nine months of the 2019/20 financial year. Additional improvements would also take place before the end of the financial year, and these activities were taking place as part of a continuous improvement approach in consultation with our External Auditors. Appropriate measures were now in place to ensure all procedure and approaches were well understood by other permanent members of the Accounting Team, and the permanent post holders for the Technical Accounting Team Leader and the Accounting Team Manager roles when appointed.

The Chairman pointed out that the Committee had previously raised concerns about capacity issues and changeover procedures within the Accounts Team. The Council had clearly learnt some very important lessons and now had documentation available for the future. However, the Chairman also highlighted that the External Auditor’s report indicated that there were still some issues to be resolved, and in some ways contradicted the Officer’s report. The interim Chief Accountant reassured the Committee that the Action Plan had been approved by the External Auditor and that the fundamental financial position of the Council was not in doubt, just the process of producing the Final Accounts. The External Auditor added that they expected to receive responses to the eight outstanding key issues listed in the report within the next two weeks and to be in a position to close the Final Accounts in December.

The Committee welcomed the fact that the Council had recognised the problem and was working to resolve the issues. Councillor R Jennings was surprised that no warnings were sounded when five Senior Finance Officers left the Council within a short space of time, and also wanted to know the cost to the Council from having to implement the Improvement Plan. The Chairman also wanted assurances that if key Finance Officers left the Council in the future then the same problems would not occur. The interim Chief Accountant reminded the Committee that there were several different reasons as to why five Senior Finance Officers left the Council within a short space of time. The Accounts Team was currently codifying all of the Final Accounts processes, including how to produce the supporting working papers. The interim Chief Accountant undertook to respond to the Committee in writing regarding the cost to the Council of implementing the Improvement Plan.

The interim Strategic Director added that it was important to keep to the schedule within the Improvement Plan, and the Committee requested that Officers attend future meetings of the Committee to provide an explanation if any of the target dates were not kept to in the future.

            Resolved:

            (1)        That the improvement plan, attached as an Appendix to the report              and providing an overview of key areas of improvement and the approach             being taken to deliver the improvement, be noted;

            (2)        That all improvement actions were currently on schedule and were             associated with resolving issues in respect of the 2018/19 accounts as well             as preparing for future final accounts be noted;

            (3)        That the significant contribution made by the lead Technical            Team Leader in both completing the accounts and authoring and delivering         the Improvement Plan be noted;

            (4)        That the improvements were being delivered within current             establishment, and by an Officer who was an interim be noted;

            (5)        That the planned improvements were well documented and a             planned exchange of knowledge and procedures would occur in respect of             existing and new permanent staff be noted; and

            (6)        That the scheduled target dates within the Improvement Plan were             expected to be adhered to, with the explanation for any missed target dates to             be reported back to the Audit & Governance Committee.