Agenda item

Andy Mack, Director of Grant Thornton UK LLP, introduced the report which provides Governance and Audit Committee with the audit findings report and financial resilience report and summarised the findings from the 2012/2013 audit.

Andy Mack gave thanks to Sarah Martin, Financial Services Manager and the finance team for the excellent work that had been done on the ‘Statement of Accounts’, which had been the main focus of the audit findings report. He added that considerable improvement had been achieved which had resulted in a tangible improvement in the quality of the statements and he was pleased at how officers had responded to the recommendations made last year regarding the capacity of the finance team and had now developed a clear action plan.

Andy Mack added that the opinion on the Council’s financial statements were as follows:

A delay in formally concluding the audit and issuing an audit certificate was due to consideration of matters being brought to their attention by local authority electors. Andy Mack added that they are satisfied that these matters do not have a material effect on the financial statements or a significant impact on the value for money conclusion and that they would be signed off by the end of September 2013.

Members asked for assurance that the Transeuropa debt would not impact on the reserves set aside for other possible improvements.

Andy Mack advised that this would be covered in the following report on financial resilience and overall value for money conclusion. He added that whilst this authority, like any other authority, faces challenges, the financial statements are sound for the next 2-3 years and he would be proposing an unqualified value for money conclusion.

In summarising the value for money conclusion Andy Mack advised Members that the work includes a review to determine if the Council has proper arrangements in place for securing financial resilience. This work includes consideration on whether the Council has robust financial systems and processes in place to manage its financial risks and opportunities, and to secure a stable financial position that enables it to operate for the foreseeable future. He added that a red/amber/green (RAG) rating system is used to identify the measure of risk.

In considering strategic financial planning the report states that the Council should continue to implement its service review programme to identify areas of transformational change required to address increasing financial pressures.  The Council should also revisit whether the dual role of Chief Executive and s151 Officer remains appropriate, given the strategic demands upon the Chief Executive. Following a query raised by Members regarding the risk of combining these two posts they were advised by Andy Mack that three councils in Kent had these joint arrangements and that what was appropriate for one council may not be for another. He added Thanet District Council needed to make sure they had the capacity, which had changed in the last 12-18 months.

Other Members had concerns regarding the resilience of the council in relation to possible litigation but were assured by Sarah Martin that provision for any potentially unsuccessful outcomes had been made. A query was also raised regarding the need for a new director post to include the role of S151 at a cost of £100k.  Andy Mack advised that this would be for the council to determine but that an option would be to maybe fill the post from within the authority. Other Members emphasised the pressure on the three senior management team members and said that appointing or promoting from within the council would be good governance.

Moved by Councillor Campbell and seconded by Councillor W Scobie that:

“3.1 Members note the content of these reports and

 3.2 that Members approve the letter of management representation”

AGREED.