Agenda item

Report of the Strategic Director of Finance

Theresa Channell, Head of Strategic Finance, introduced the Statement of Accounts 2018/19, addendum to Annual Governance Statement 2018/19 and Audit Findings– Value for Money and going concern report to the Committee. She reminded the Committee that the unaudited accounts had been approved in July 2019. The External Audit report had been presented in 2020, but the value for money conclusions were delayed due to the Report in the Public Interest, and the non-statutory review. The following points from the report were highlighted:

(a)  The External Audit report issues an adverse value for money conclusion stating that in 18/19 there were not adequate arrangements in place. Issues set out include financial stability, company governance and management of significant projects, all of which have been included within the Recovery and Improvement Plan;

(b)  A revised version of the Draft Statement of Accounts was presented to this committee in July 2020 (minute 18) with changes as suggested by the External Auditor. These have subsequently been signed off by the Chair of the Audit committee (as per the authority granted in Resolution 2 minute 18 2020/21);

(c)  There were no changes to the core statements within the Accounts. Changes were made, with the agreement of the External Auditors, to post balance sheet events to take into account Covid-19 impacts and the going concern conclusions, along with presentations changes to the financial asset notes;

(d)  The Annual Governance statement is required to be published with the Statement of Accounts and the changes made reflect those made to the Statement of Accounts;

During discussion, comments from Committee members and questions highlighted the following points:

(e)  This is the Statement of Accounts for 18/19 and the information within the report relates to that time period. A refreshed general statement about the city will be produced for this years statement of accounts reflecting the changes in demographics, the nature of the city and its needs especially in light of the Covid pandemic;

(f)  The Value for money report distinguishes between the Broadmarsh Shopping and Leisure Centre project from the Broadmarsh Car Park, bus station and Library project. These two projects were considered as part of the initial audit work in the summer of 2019 and were examples of large scale, live projects to use as examples. The view at the time was that here were strong processes in place but here were some concerns around how these were being applied and the culture of the Council. This point around culture also becomes apparent again looking at issues around RHE and is addressed within the Recovery and Improvement plan;

(g)  Although there were strong systems in place these were overridden by the culture and the tendency for both officers and politicians to become involved in a group way of thinking. This then reduced the ability for the statutory officers to raise concerns without triggering a Section 114 notice. Separate mechanisms need to be established to ensure that statutory officers are able to intervene without triggering a Section 114 notice;

(h)  Members of the Committee commented that Corporate Governance Inspections were beneficial in the running of Local Authorities;

Resolved to

(1)  Consider the external Audit finding for Nottingham City Council and Value for Money and going concern Report;

(2)  Note the changes to the statement of Accounts from the version presented to the Committee in July 2020; and

(3)  Note the Addendum to the Annual Governance Statement 2018/19.