The Governance and Audit Committee were scheduled to note reports on the Council’s risk management, procurement, counter-fraud activity, internal audit and financial sustainability. The Committee were also scheduled to review the minutes of their previous meeting on 18 September 2024.

Financial Sustainability

The Committee were scheduled to note a report on Financial Sustainability.

This report describes how financial assurance is provided to the committee, and what the council are doing to become financially sustainable in the longer term. It notes that since 2010, services other than social care have had to be reduced by 53%, and describes how recent cost pressures, particularly in adult social care, have resulted in an indicative budget gap of £111.9 million by 2026/27.

The report explains that the adult social care department is undertaking a review of its operational areas and control mechanisms to address the financial issues. It also describes a range of measures the council are taking to reduce the projected budget gap. These include implementing a savings programme, focussed work to reduce areas of demand pressure in adult social care, children’s social care, and temporary accommodation, and new controls on spending.

The report also describes the established arrangements in place to provide members of the council with financial assurance. This includes quarterly reporting to the Overview Select Committee, the Internal Audit function provided by Veritau, and the external audit function, which is currently provided by Grant Thornton.

Risk Management

The Committee were scheduled to note a report on the Council's Strategic and Operational Risk Registers¹ .

The Strategic Risk Register (SRR) contains the strategic risks facing the council. These are the risks that could affect the council’s ability to achieve its strategic objectives. The report describes 14 risks that have been identified in the SRR, and how the council intends to manage them.

“Each risk in the summary is supported by a more detailed risk control action plan capturing existing risk controls and proposed further actions/controls (unless the risk strategy is to tolerate the risk without further controls).”GAC Covering report - Risk Update 27.11.2024

The Operational Risk Register (ORR) contains the operational risks that could affect the council’s day-to-day activities.

“Most operational risks should have an alignment back to one or more of the overarching strategic risks facing the council. However, there may be high risks at operational level that may not have a direct impact on any of the strategic risks.”GAC Covering report - Risk Update 27.11.2024

The report describes how the operational risks identified in the ORR affect each of the council's strategic areas, and which officers are responsible for managing them. It also lists 3 risks whose scores have changed, and 2 risks that have been deleted from the ORR. These are:

Procurement

The committee were scheduled to note a report on the Council's Procurement activity.

This annual report was prepared to meet the requirements of the Council's Contract Procedure Rules. It describes the work of the Council's 3 procurement teams, and how their activity has complied with the Contract Procedure Rules. It describes how the new Provider Selection Regime Regulations 2023 (PSR), which were introduced in January 2024, have affected the council's procurement activity. It also notes that the Public Contracts Regulations (PCR) thresholds were updated in December 2023.

The report notes that the Procurement Bill has received Royal Assent and is now the Procurement Act 2023. It provides detail about the new legislation, and says that it is expected to come into effect in February 2025. It explains that because of the Procurement Act 2023, the council will have to rewrite its Contract Procedure Rules.

“This will also require an extensive re-write of the Contract Procedure Rules, covering the Councils approach to procurement and contract modifications under the Procurement Act 2023, Provider Selection Regime 2023, and existing contractual arrangements under the Public Contracts Regulations 2015.”Procurement Annual Report 2023-2024

The report describes the 154 procurements that were completed during 2023/2024. The total value of the contracts associated with these procurements is £98 million.

The report then describes the Procurement Plan for 2023/2024 and how Waivers to the council’s Contract Procedure Rules were used. It says that the more robust challenge to waivers and exemptions has continued, but notes that there has been an increase in waivers in some areas because of the urgency of projects. The report concludes by noting that work has begun to look for efficiencies in the way the council procures goods and services.

Counter-Fraud Activity

The Committee were scheduled to note a report on Counter Fraud activity at the council.

This report describes the work of the Corporate Investigations Team between 1 April 2024 and 30 September 2024.

It describes how the Corporate Investigations Team investigate suspected financial irregularities at the council, make recommendations for how to reduce the risk of future losses, and how to improve the council's performance. It lists examples of work areas and savings that have been made, including:

• Right to Buy application checks
• Empty Residential Property checks
• School place application checks
• Housing benefit entitlement checks
• The use of National Anti-Fraud Network (NAFN) alerts
• Requests to access employees' emails, internet access, computer records, and building access records

The report lists the savings and notional savings that were made during the first half of the financial year, and gives details about how the National Fraud Initiative (NFI) will be used during the second half of the year.

Internal Audit

The Committee were scheduled to note an Internal Audit Work Progress Report.

This report provides an update on the progress that has been made on the Internal Audit work programme for 2024/25. It describes the Internal Audit function provided to the council by Veritau, and lists the audits that are currently underway, the final reports that have been issued, and the other work that Internal Audit have carried out this year. It notes that Veritau have taken a flexible approach to delivering the Internal Audit work programme, which is designed to include all potential areas that could be audited in the short to medium term.

“In determining which audits will be undertaken, the priority and relative risk of each area will continue to be considered throughout the remainder of the year, and as part of audit planning for 2025/26 (which will commence towards the end of the current quarter). “Appendix 1 - Internal audit progress report 2024-25 December 2024

The report concludes by describing how Internal Audit are ensuring that the control weaknesses identified in previous audits are being satisfactorily addressed, and noting that CIPFA are currently consulting on new public sector internal audit standards that will come into effect on 1 April 2025.