The Audit Committee of Nottingham City Council met on 28 June 2024 to discuss several key issues, including the progress of the Statement of Accounts, the Annual Governance Statement, the Value for Money Report, and the Financial Improvement Plan. Decisions were made to note the current positions and timelines for various financial statements and governance frameworks.

Statement of Accounts Progress Update

Glenn Hammons, Interim Finance Lead – Technical Finance, provided an update on the Statement of Accounts. The draft accounts for 2019/20 and 2020/21 are complete, and the 2021/22 accounts are expected to be available in draft format after April. The Council has submitted a response to the government consultation on the local audit backlog and is reviewing proposals from CIPFA¹. The Committee raised concerns about the timeframes for external sign-off of the 2019/20 accounts, which Grant Thornton aims to complete by the end of April. Additional resources have been brought in to address staff turnover and ensure timely completion of the outstanding accounts. The Committee agreed to call an extraordinary meeting if required to approve the finalised 2019/20 accounts.

Annual Governance Statement - Process for producing 2023/24 Statement & prior year updates

John Slater, Group Assurance and Audit Governance Manager, presented a report on the Council’s governance arrangements and plans to improve compliance. The Local Code of Governance, last updated in 2017, will be reviewed, and a Corporate Assurance Framework will be established by October 2024. The Annual Governance Statements (AGS) for 2022/23 and 2023/24 will be compiled by June or July. The Committee welcomed the establishment of a Corporate Assurance Framework and discussed the interpretation of the latest CIPFA guidance. The new model will generate ongoing assurances across all lines of activity, allowing the Audit Committee to focus on identified issues.

Combined 2019/20, 2020/21, 2021/22 and 2022/23 Value For Money Report

Andrew Smith and Joanne Taylor from Grant Thornton presented the Auditor’s Annual Report, highlighting significant weaknesses and recommendations for Nottingham City Council. Positive progress was noted in areas such as the Covid-19 response, procurement, and risk management. However, issues such as external debt, misappropriation of funds, and overspends were highlighted. The Committee discussed the Council’s external debt, the increased funding for children’s services, and the misappropriation of funds between the Housing Revenue Account (HRA) and General Fund. The Committee expressed disappointment that they were not consulted before the issuing of the Section 24 Notice by Grant Thornton.

Financial Improvement Plan Update

Shabana Kausar, Director of Finance and Deputy S151 Officer, provided an update on the Council’s Financial Improvement Plan (FIP). Substantial progress has been made, with 83.5% of the 248 financial deliverables/actions completed or in progress. Despite resourcing issues, priority has been placed on delivering the improvement plan. The Committee discussed the impact of section 114 spending controls on workloads and the main risks to the FIP, including capacity and resources. The Committee noted the progress made and the specific improvements delivered since the last update.

Audit Committee Improvement Plan

The Chair presented a report outlining actions to improve the work of the Audit Committee. The CIPFA self-assessment guide has been completed, and plans are in place to address identified weaknesses. The Committee now has a dedicated support officer and receives briefing papers and notes. The improvement plan will involve input from Committee Members, finance colleagues, and external audit. The Committee approved the Audit Committee Improvement Plan.

Exclusion of the Public

The Committee decided to exclude the public from the meeting during consideration of the remaining agenda items in accordance with Section 100A(4) of the Local Government Act 1972.

Annual Information Compliance and Information Security Assurance Report

Simon Salmon, Head of IT, and Naomi Matthews, Data Protection Officer, presented the Annual Information Compliance and Information Security Assurance Report. The Committee asked questions and made recommendations as detailed in the exempt minutes.

East Midlands Shared Services - Annual Report 2022/23

Lucy Littlefair, Head of East Midlands Shared Services (EMSS), presented the Annual Report of EMSS, providing an update on priorities and performance for 2022-23. The Committee asked questions and received detailed answers as set out in the exempt minutes.