Agenda item

Gareth Mills, Grant Thornton, presented the external auditor’s 2021-22 annual report for Value for Money (VFM).  Under the National Audit Office Code of Practice, external auditors were now required to consider whether the Authority had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.  Auditors now reported in more detail on the Authority’s overall arrangements as well as key recommendations on any significant weaknesses in arrangements identified during the audit.

Grant Thornton had identified risks in respect of:-

Financial Sustainability

-        No significant weaknesses in arrangements identified but an improvement recommendation made

-        The Authority had maintained a steady financial position which had improved in the past 2 years. 

Conclusion

·       Overall satisfaction that the Council had appropriate arrangements in place to ensure it managed risks to its financial sustainability

·       No risks of significant weaknesses identified

·       One improvement recommendation in respect of refining arrangements for monitoring of the Capital Programme to ensure the spend profile and timing of capital expenditure remained accurate and supported delivery of the Programme and Council Plan

Governance

-        No significant weaknesses in arrangements identified but an improvement recommendation made

Conclusion

·       No significant weaknesses identified in respect of the Council’s governance arrangements

·       Overall satisfaction that the Council had appropriate arrangements in place including for budget setting and risk management

·       One improvement recommendation to draw out in the Corporate Risk Register and associated published risk management reporting, the degree of risk appetite and the possible upside of taking on a degree of managed risk

Improving economy, efficiency and effectiveness

-        The ongoing significant weaknesses in arrangements as at 31^st March, 2022, regarding the SEND report

Conclusion

·       Overall satisfaction that there were appropriate arrangements in place in relation to improving economy, efficiency and effectiveness except for arrangements in implementing Special Educational Needs and/or Disabilities (SEND) Reforms as set out in the Children’s and Families Act 2014

·       Under the terms of the NAO’s VFM guidance, Grant Thornton considered it appropriate to still report that the SEND system in Rotherham as a significant weakness in the Council’s arrangements as at 31^st March, 2022.  The resultant key recommendation made in 2020-21 remained relevant to the 2021-22 VFM work, however, the actions taken by the Council during 2022-23 would be considered as part of the 2022-23 VFM work later in the year

·       As at December 2022, the Health and Safety Executive had not formally reported any decisions/conclusions relating to their investigation of November 2021.  The Council had taken pro-active improvement action to address the informal feedback received from the HSE.  No further work would be performed until the investigation was completed and the HSE published a final report

·       The Council was named the ‘most improved Council in the country’ at the Local Government Chronicle Awards in 2022

·       One improvement recommendation that consideration should be given as to whether the KPI performance report could be streamlined to provide more summarised and integrated performance, finance and risk reporting.  Consideration should also be given to reducing the volume of KPIs and targets to a more manageable level to assist clearer reporting of actions for any KPIs/targets not delivering

The report also included an update on the progress made to date with regard to previous recommendations. 

This report concluded the 2021/22 audit work and would expect to issue the audit certificate at some point during the month.

The Chair thanked all who had been involved in the production of the Value for Money report.

Discussion ensued with the following issues raised/clarified:-

-        Levels of useable reserves – Rotherham was compared to other metropolitan councils in England (32) of which it was at the lower end.  It was recommended that reserves be at 5-10%; there would be concern is the level was below 5% of the Authority’s General Fund balance

-        The recommendation made regarding the reporting of Capital Projects was not unique to Rotherham.  However, work was being undertaken to change the reporting to be by themes rather than by Directorates

Resolved:-  That the update be noted.