Agenda item

Report of the External Auditor attached.

The External Auditor apologised for the lateness of their report but reported that they were still confident that they would be in a position to sign off the accounts by 31 July 2018. They also gave thanks to the work of the Finance Team with a special mention going to James Mcnulty for providing timely responses throughout the process.

The Committee received a report of the External Auditor on their audit findings for the authority for the year ending 31 March 2018 that highlighted key matters arising from the Council’s financial statements.

Subject to outstanding queries being resolved, the Auditor intended to issue an unqualified opinion on the financial statements, these included:

·         receipt of management representation letter

·         completion of the cut-off testing

·         review of financial instruments

·         review of audit files by Engagement Lead and Manager, and

·         review of the final set of financial statements

Upon completion of their risk based review of the Council’s value for money arrangements the Auditor concluded that the authority did have proper arrangements to secure economy, efficiency and effectiveness in its use of resources, except for in relation to the Peer Challenge team, finding, that the pace of change remains slow, with progress hampered by a number of issues, including the lack of permanent senior capacity and the need to develop a coherent approach to corporate planning, financial planning and strategic risk and as such intended to issue a qualified ‘except for’ Value for Money conclusion on 31 July 2018.

In addition to the above requirements the external Auditor has additional powers and duties under the Local Audit and Accountability Act 2014 (the Act). The Auditor has concluded that it is appropriate to use these powers to make a recommendation under section 24 of the Act due to the slow progress made by the Council in respect of responding to the recommendations made by the Local Government Association (LGA) in their Corporate Peer Review 2017. This would require a response from the Council.

The statutory recommendation will mean that the Council needs to:

·         make demonstrable progress in relation to the eight recommendations that were made in the letter dated 16 March 2018 to the Chief Executive from the Local Government Association (LGA) in relation to the LGA Corporate Peer Challenge follow up visit to South Ribble Borough Council

·         in particular, the two recommendations in relation to the management structure to be implemented as a matter of urgency, which are to place particular focus in the short term upon:

o   implementing the new senior management restructure

o   developing the leadership potential of the new senior team to take forward the place, strategic finance and transformation agendas.

The Chair expressed his upmost disappointment to the Auditor, for the issuing of the statutory recommendation under Section 24 of The Act, feeling very strongly that this action was too extreme, given the vast improvements that had been made by the Council over the past 12 months. Councillors Caroline Moon, Deputy Leader and Warren Bennett, Cabinet Member (Assets and Transformation) also expressed their frustration with the Auditor’s view, stating that all the recommendations made by the Peer Review had either been completed or were in hand, evidenced by meetings with LGA Peer Members through the Improvement Reference Group.  A full management response including Action Plan had been completed which had met with their approval and was being reported to Cabinet in September.

RESOLVED: (Unanimously)

That the report be noted.