The Audit Committee of Nottingham City Council convened on 28 June 2024 to discuss several key issues, including the progress of the Statement of Accounts, the Annual Governance Statement, and the Financial Improvement Plan. Significant decisions were made regarding the timelines for the completion of outstanding accounts and the establishment of a Corporate Assurance Framework.

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 progress has been made on the 2021/22 and 2022/23 accounts. The Council has submitted a response to the government consultation on the local audit backlog and is reviewing proposals from CIPFA¹. The Council aims to meet the backstop date of 31 May 2025 for the 2023/24 accounts. The Committee agreed to call an extraordinary meeting if required to approve the finalised 2019/20 accounts.

Finance regularly reviews capacity and skills and brings them in if needed to work to the indicative timelines, explained Glenn Hammons.

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 the process for compiling the Annual Governance Statements (AGS) for 2022/23 and 2023/24. The Local Code of Governance, last updated in 2017, will be reviewed, and a Corporate Assurance Framework will be established by October 2024. The AGS is required by the Accounts and Audit Regulations 2015 for each set of draft and final accounts.

The new model will be a live process and thus assurances will be generated on an ongoing basis across all lines of activity, noted John Slater.

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. The report noted positive movements in areas such as the Covid-19 response, procurement, and risk management. However, issues like the misappropriation of funds between the Housing Revenue Account (HRA) and General Fund, and overspends in each year of the reporting period, were also highlighted.

The Council’s external debt was complex, explained the S151 Officer, noting the debt's role in funding infrastructure and generating income.

Financial Improvement Plan Update

Shabana Kausar, Director of Finance and Deputy S151 Officer, provided an update on the 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 FIP will continue for a few years, focusing on fundamentals such as the financial accountability framework.

The spending controls were a necessary and proportionate measure to put in place following the S114 (3) report, stated the S151 Officer.

Audit Committee Improvement Plan

The Chair presented a report outlining actions to improve the Audit Committee's work. 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 in line with the support given to the Council’s Scrutiny Committees.