The Audit and Standards Committee of Stroud Council met on Tuesday 16 July 2024 to review the council's financial performance, governance arrangements, and internal audit activities for the past year. Key discussions were scheduled to focus on the unaudited statement of accounts for 2023/24, treasury management outturn, and the annual governance statement.

Treasury Management Outturn 2023/24

The committee was scheduled to receive an update on the council's treasury management activities for the 2023/24 financial year. This included a review of the council's borrowing and investment strategies, in line with the council's Treasury Policy Statement. The report was also set to detail the actual Prudential Indicators for 2023/2024, as required by the Prudential Code. The report noted that the council operated within its treasury limits and Prudential Indicators, with the exception of a breach related to automatic reinvestment of Barclays interest, which was resolved in September 2023. A significant point of discussion was the closure of the Lothbury Property Trust, which resulted in an estimated loss of £1.03m on the council's £4m investment. This loss was to be charged to the council's £1.493m Investment Risk Reserve.

Unaudited Statement of Accounts 2023/24

This report provided an opportunity for the committee to publicly consider the council's Statement of Accounts for the 2023-2024 financial year, prior to the official audit opinion from Bishop Fleming. The statement was prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24. The report indicated that Stroud District Council was in a strong financial position, with a healthy level of reserves. The General Fund and Housing Revenue Account (HRA) services were delivered within agreed budgets, and increased income from business rates retention and investment returns allowed for allocations to reserves. The statement detailed the council's financial position, including the Expenditure and Funding Analysis, Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet, and Cash Flow Statement.

Annual Governance Statement 2023/24

The committee was presented with the Annual Governance Statement for the financial year 2023/24. This statement outlines the governance arrangements that were in place and identifies areas of focus for 2024/25. The statement confirmed that the council's governance framework operated effectively throughout the year, adhering to the seven core principles of the CIPFA-SOLACE framework. Areas of focus for the upcoming year included developing the approach to project and programme management, completing the transition of leisure services to in-house operation, and ensuring compliance with the new Regulator of Social Housing requirements.

Internal Audit Reports

Several reports from the Head of Audit Risk Assurance (ARA) were scheduled for review, providing an overview of internal audit activity and its effectiveness.

• Annual Report of the Head of Audit Risk Assurance (ARA) 2023-24: This report provided an opinion on the overall adequacy and effectiveness of the council's internal control environment, risk management, and governance processes. The overall opinion was that an Acceptable level of assurance could be provided, indicating a low to medium exposure to business risk. The report highlighted the ongoing prevalence of cyber security risks and the council's investment in updating its ICT infrastructure. It also noted challenges in staff recruitment and retention across local government and the need for management to regularly review succession plans. The report also detailed the work of the Counter Fraud Team, including investigations, policy development, and fraud awareness training.

• Internal Audit Charter and Code of Ethics: This report presented the reviewed Internal Audit Charter and Code of Ethics for approval and noting, respectively. These documents define the mandate, authority, purpose, and responsibilities of the Internal Audit service, ensuring it operates in accordance with mandatory professional standards.

• Internal Audit Quality Assurance and Improvement Programme (QAIP) 2024-25: The committee was asked to approve the QAIP for the upcoming year, which outlines how the internal audit service ensures conformance with professional standards and promotes continuous improvement. The report indicated full compliance with the Public Sector Internal Audit Standards (PSIAS) for 2024-25, with an ongoing commitment to improvement.

• Internal Audit Activity Progress Report 2024-25: This report provided an update on the progress made against the approved Internal Audit Plan for 2024-25, detailing the outcomes of audits completed up to mid-June 2024. Assurance levels were provided for various audits, including Council Tax and Business Rates opening debits (Substantial assurance), Disabled Facilities Grant (Acceptable assurance), and Business Continuity (Acceptable assurance). Some areas, such as Section 20 Leaseholder Service Charges, received a Limited assurance opinion, with recommendations made for improvement. Grant certification audits for the Local Authority Delivery Grant and Home Upgrade Grant were completed with no issues identified.

Other Standing Items

The committee was also scheduled to consider standing items, including the Work Programme and the Strategic Risk Register Update. The Work Programme outlined the planned audit activities for the coming year, while the Strategic Risk Register update provided information on key changes to the council's identified risks and controls. The Strategic Risk Register indicated updates to risks concerning inflation, information governance compliance, and cyber security.