Agenda item

Somerset Joint Auditor's Annual Report

To consider the report.


The Audit Committee noted the Somerset Joint Auditor’s Annual Report and recommendations and requested further Management responses to be improved and strengthened and considered at Audit Committee 28 March 2024.


The Chair welcomed the Director and PSA Head of Audit Quality - Regulation, Audit Grant Thornton UK LLP, Barrie Morris, and the Value for Money Senior Manager, National VFM Team, Grant Thorton, Dan Povey.


The Director and PSA Head of Audit Quality - Regulation , introduced the report, highlighting: the issues identified from the review of the former five Councils;  the identification of seven significant weaknesses and the number of improvement recommendations and key recommendations; that the report covers the period and the year ending the 31 March 2023, with additional appropriate updates recognising the significant progress and actions that the Council has taken; and the current satisfied opinion that the Council is moving in the right direction.


The Value for Money Senior Manager , presented the report, highlighting: the main themes across financial sustainability, governance, economy, efficiency and effectiveness; the seven key recommendations and the reporting of overall significant weakness with financial sustainability.



The Audit Committee asked a number of questions and made a number of comments which were responded to at the meeting, as follows:


        Does this organization have the capacity and maturity to undertake a system wide transformation program at scale and pace, given the evidence of the slow pace in the last 18 months and in the auditor’s words, there is not significant pipeline savings identified and that if the budget gap remains at the current levels, Somerset Council will have negative reserves by 2025/26?

        What should this Committee do to record their concerns and stress them to the Executive?


In response, the Executive Director Resources and Corporate Services, Jason Vaughan, advised on the concerns set out in the budget report on maturity, pace of delivery and risks to be considered at the Executive meeting 7 February 2024. The Director further explained staff savings and transformation activities that have taken place and the challenge of the approach to transformation and recommended that the report be forwarded to Executive to be considered as part of budget report.


The Chair responded that it was for each member the Audit Committee to make an assessment on capacity and maturity, and clarified the action taken by the Audit Committee in response to the Financial Emergency and requested that the Transformation Programme report be considered at the Audit Committee meeting 28 March 2024 to provide understanding, clarity and assurance of the governance arrangements of the transformation programme. The Chair further commented on the scale and pace of the work required, the enormous challenge to set future budgets and the need for Government support.


During debate the following was discussed:


        The local and national impacts and factors contributing to the financial emergency – The Deputy Leader of the Council and Lead Member for Resources & Performance, Cllr Liz Leyshon, paid tribute to the finance team for all of their hard work, the work that has taken place to find a local solution and the need for a national solution to Local Government funding.

        The progress on delivering the £18m saving from the One Somerset Business case and the need for reprofiling due to the scale of the challenge.

        The quality of the management responses within the report, and the potential of an additional meeting to discuss the findings of the report.

        Contract management arrangements at the former Somerset County Council and the recommendation within the report to implement robust procurement and contract management arrangements at Somerset Council.

        The Commercial investment portfolio performance of the predecessor Councils assets and the options for asset disposal, financing and risk mitigation for Somerset Council – The Lead Member for Resources & Performance advised of the complexity of the program of work, overseen by specialists, to take place over a number of years to ensure that income is protected as much as possible.

        The High Needs Block, with the Department of Education grant not meeting provision and the Somerset Council response and deficit management plan.

        The backlog of unpaid supplier invoices and the progress of the finance team to positively address the issues and further develop the functionality of the finance system.

        The Audit Committee requested the report be shared in its entirety with the Executive – The Executive Director Resources and Corporate Services agreed to strengthen the cover report prior to presenting at Full Council and Democratic Services undertook to circulate the report to Executive prior to 7 February 2024 Executive meeting.


Having been duly proposed by Cllr Mike Stanton and seconded by Cllr Tim Kerley, the Audit Committee agreed an amendment to add to the recommendations:


That the Audit Committee request that Management responses to be improved and strengthened and considered at Audit Committee 28 March 2024


Following consideration of the officer report, appendices and discussion, the Audit Committee:


• Noted the Somerset Joint Auditor’s Annual Report and recommendations.


• Recommended the report to Full Council 20 February 2024.


• Requested that management responses to be improved and strengthened and considered at Audit Committee 28 March 2024.

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