Agenda item

The covering report of the Chief Finance Officer presents two reports from Grant Thornton in relation to their audit work for 2021/22 financial year. The Annual Auditor’s Report and the IT Audit Report.

The covering report of the Chief Finance Officer presented two reports from Grant Thornton in relation to their audit work for 2021/22 financial year - the Annual Auditor’s Report and the IT Audit Report.

The Annual Report and the IT Audit Report were attached as Appendix 1 and Appendix 2 of the submitted report.

Grant Thornton, External Auditors presented the item providing the following information to the Committee:

·  The Annual Report provided the audit findings on the 2021/22 value for money review which had focussed on key developments in the Council’s arrangements across three themes which were Financial sustainability, Governance and Improving economy, efficiency and effectiveness. The report did not identify any statutory or key recommendations but did make a number of recommendations for improvement.

·  Members attention was drawn to page 69 of the agenda which presented the Executive Summary. Grant Thornton confirmed that there were no risks of weaknesses, and this was good for a Council of this size. It was suggested that the Council should look to enhance existing controls and processes and details of recommended improvements were provided within Appendix 1 of the submitted report. It was noted that one of the improvements recommended was to update the Members Code of Conduct document.

·  Members noted there were no significant issues in relation to key services or key performance indicators.

·  The Committee were advised that work was currently ongoing in relation to the 2022/23 accounts.

In response to questions from the Committee the following information was provided:

·  In relation to pages 91 – 93 of the agenda – follow up of previous recommendations. The Committee were informed that Grant Thornton was satisfied with actions taken to date. Although, it was noted that some of the issues raised such as benchmarking could still be beneficial for the Council going forward. However, there were no high level risks.

·  It was referenced on page 80 of the agenda that the Council has 10 /11 Scrutiny Boards. However, it was noted that the Council has only 5 Scrutiny Boards with the others listed being consultative Scrutiny Boards.

·  Business Rates collection rates were improving with 2022/23 collections better than 2021/22.

·  The Council actively benchmarks in relation to Adult Social Care costs reductions and savings. It was noted that the Committee would like to see more benchmarking in future.

·  Members acknowledged the challenges faced by the external auditors and noted that this report would bring value for money element of the audit back on track with the 2022/23 report being brought to the November 2023 meeting.

·  The Committee recognised that the General Fund Reserves were lower than other core cities and acknowledged that there was a need for the Council to increase the General Fund Reserves. However, it was noted that the increase may not bring the Council in line with other core cities if they also decided to increase.

The I.T Audit Senior Manager from Grant Thornton presented the I.T. Audit Findings Report and provided the following information:

·  The committee’s attention was drawn to page 105 of the agenda. It was noted that user accounts had been identified which in the auditor’s view had an inappropriate combination of roles in Financial Management System (FMS). Risks had been identified and recommendations to mitigate the risks had been provided.

·  User accounts had also been identified with inappropriate access rights in the SAP Payroll System. Risks in relation to this were outlined along with recommendations to reduce access privileges and ensure where privileges are given, they are commensurate with job responsibilities.

·  Page 108 reported findings relating to privileged user account access to applications and databases within the three main systems used and the management response.

Responding to questions from the Members the following information was provided:

·  It was acknowledged that some findings from the previous year had not yet been fully addressed. It was further noted that the introduction of a new financial ledger system and a new payroll system in the near future would bring changes to user access controls and different system capabilities, and a new assessment would be needed.

·  Members requested that progress on the implementation of the recommendations should be reported to the Committee. It was suggested that the recommendations should be included within the internal audit recommendations tracking process, to be reported in future updates to the Committee.

RESOLVED - To receive the Annual Auditor’s Report and the IT Audit Report presented by Grant Thornton and to note the recommendations for improvement which have been made in each report