Agenda item

The Key Audit Partner Grant Thornton introduced the Annual report and informed members that his colleague who undertook the detailed work was online for any questions if needed. The requirement for Value for Money (VFM) work was introduced by the national audit office and applied to this year to provide more comprehensive details around financial sustainability, governance and improving economy efficiency and effectiveness.

He highlighted to members the key recommendations and some of his comments included;

·         A Statutory recommendation had been made.

·         Significant weakness were found in the final accounts preparation process.

·         Commercial Strategy and Investment key recommendation. It was found that there was a clear plan for the future funding of investments moving forward.

·         Management had provided comprehensive responses found in the body of the report.

In response to questions from members the Chief Finance Officer, Lead Specialist Finance and Key Audit Partner Grant Thornton gave the following responses;

·         The finance team were over establishment currently. Since the management response to the initial findings report, 2 permanent finance colleagues had left and management were keeping a close eye going forwards.

·         The individuals who had left the finance team had now been replaced and were experienced local government officers.

·         The Local Government Reform Program (LGR) was looking at all the somerset districts investment for yield activity and identifying the potential options for the future that included handing over the assets and the reserves to the new authority.

·         3 million pounds from the commercial contingency reserve was moved to the general reserves fund. At the time of the budget the interest rate increase had not taken effect as much as now. It could be moved back if needed.  

·         In relation to the settlement agreement, there was no set of arrangements in place at that time that payroll could follow to ensure that the payment had gone through the correct process.

·         The controls checks and balances had been designed but weren’t followed in this instance.

·         Best practice for agreements would be put to full council to adopt.

·         In the scheme of delegation, the financial limits for senior officers had been in place for some time.

·         Settlements like this were rare but undertaken on occasion in local government. The details would have been agreed between the lawyer of the individual and the council. The details of this agreement would not be disclosed. 

·         The report did not say that the amount paid was unlawful. It was clarified that the legality was not confirmed through the Monitoring Officer nor was there evidence of obtaining separate legal advice.

·         An officer of local government should be named publicly if they were earning £150,000 or more.

·         A written answer would be provided to members on the question of the CEO overspend for transformation.

·         The settlement agreement was made during a period of significant change for the organisation and that increased risks within the control environment.

·         There would be a raised awareness of the arrangements that were being put in place for all officers who might likely be involved in the process.

·         Members were updated on the independent investigation regarding Environmental Services on the 26^th May and a further update on actions from the South West Audit Partnership (SWAP) audit was on the Audit Committee forward plan for January.  

After questions from members the Key Audit Partner Grant Thornton clarified that the report had a holding position in relation to the opinion of the financial statements. Once concluded, the report would be updated and issued as a final version.

Management agreed to circulate to Audit members the process for settlement agreements for comment before going to Full Council.

There were no further questions and the Chairman thanked the officers for their responses.