Agenda and minutes

To be notified of the appointment of any Substitute Members for the meeting.

There were no substitutes reported.

You are invited to declare any registerable and/or non-registerable interests in matters appearing on the agenda, and the nature of that interest.

You are also invited to disclose any dispensations that have been granted to you in relation to any matters appearing on the agenda.

There were no declarations of interest reported.

To confirm the minutes of the meeting held on 31 May 2023

Resolved that the minutes of the meeting held on 31 May 2023 be confirmed as a correct record and be signed by the Chair.

To give consideration to a report which provides an update on the progress being made in relation to the completion of the 2021/22 Audited Annual Statement of Accounts.

Consideration was given to a report which provided an update on the progress made in relation to the completion of the 2021/22 Audited Annual Statement of Accounts.

At the last meeting the Committee had been advised that the external auditors, Ernst and Young (EY), had received the outstanding information in relation to the provision of the pension assurance statement by the Tyne and Wear Pension Fund.  It was explained that EY’s pension experts had been working through the triennial pension report and awaiting the results of membership testing data from the pension fund.  No indication had been given as to when the Authority could expect the completion of the outstanding works so that the Final Statements of Accounts could be cleared for sign off.  It was explained that the delay in completing the accounts was a national issue and that across the country only 25% of authorities’ accounts had been signed off. 

Members expressed dissatisfaction that the external auditors were not present at the meeting and the Director of Resources undertook to advise EY of the Committee’s concerns.

Resolved that (1) The update provided be noted; and

(2) The previous decision of the Committee to delegate authority to the Director of Resources in consultation with the Chair of the Audit Committee to approve the Audited Annual Statement of Accounts 2021/22 be noted

To give consideration to a report which provides an update on the closure of the 2022-23 Accounts

Consideration was given to a report which provided an update in respect of the closure of the 2022/23 accounts.

It was explained that a draft statement of accounts 2022/23 had been produced and published on the Authority’s website on the 15 June 2023 after the 31 May deadline.  It was explained that this delay had been due to a national shortage in audit capacity which had resulted in delays nationally with only 40% of authority’s having managed to publish on time.

The external auditors had commenced work on the audit of the 2022/23 accounts on 23 June 2023 and with the aim that the signed off Statement of Accounts would be published by the end of November 2023.

The Committee was taken through the draft annual financial report.  It was noted that the cost of providing the Authority’s services had increased from £168M to £180M over the year and the level of external debt had remained consistent.  Reference was also made to a net overspend of £6.081M and an explanation of the reasons for this was provided.

The Committee was also provided with a copy of the revenue outturn.

Members sought clarification in relation to what were classed as central items and how demand for services was managed.  It was explained that work was ongoing with Directors in relation to the medium-term financial plan and the provision of a balanced budget. 

Clarification was also sought in relation to the household support grant and the impact that the recent pay award had on the budget.

An explanation was also provided on the various types of reserves held by the Authority and when they could or could not be used.

In response to questions officers undertook to provide members with additional information in relation to long term debtors and a breakdown in respect of debtors/creditors.

Resolved that (1) the publication of the draft Statement of Accounts be noted; and

(2) the commencement of the External Audit on the 23 June 2023 be noted.

To give consideration to a report which provides an update on the Authority’s compliance with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Financial Management Code.

Consideration was given to a report which provided an update on the Authority’s compliance with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Financial Management Code and also highlighted areas where compliance with the Code could be enhanced.

It was explained that the Financial Management Code had been based on 6 principles, Leadership, Accountability, Transparency, Standards, Assurance and Sustainability and each of the principles had been supported by a set of guidance standards against which authorities could carry out a self-assessment.

The Authority had undertaken an initial self-assessment in 2021 and a revised self-assessment had been undertaken in June 2023 against the FM Code which had identified compliance and highlighted those areas which required enhanced compliance, the findings of which had been built into the Authority’s service plans.

Members attention was drawn to the one amber risk that had been identified and which related to the insourcing of the financial service from Equans to the Authority in May 2023.  It was noted that the Finance Service Plan 2023/24 included measures to build skills, knowledge and ensure that the right proportion of the service was professionally qualified.  It was also explained that once the Service Plan had been put in place the risk would move from the amber category to the lower green risk.

Reference was also made to a number of high profile financial difficulties that had recently been in the public domain and had resulted in the issue of S114 notices under the Local Government Finance Act 1998 together with the measures that had been imposed on those authorities.  It was explained that the Authority had taken the opportunity to review the underlying issues which had been identified and these had been used as the basis of an enhanced assessment within North Tyneside to provide additional assurance that the Authority had strong financial governance in place. For each of the risks identified actions to mitigate and strengthen the overall financial stability and governance of the Authority had been put in place.

Resolved that (1) the work outlined to further enhance financial governance and sustainability in line with the Chartered Institute of Public Finance and Accountancy Financial Management Code be noted; and

(2) the actions identified to mitigate risks and strengthen the Authority’s financial management and governance processes be noted

The Chair announced that Richard Dunlop, the Interim Chief Internal Auditor, would leave the Authority in September.  He suggested that the Committee’s thanks be forwarded to Richard for his sterling work for the Authority.  Members endorsed the suggested course of action

The Committee was also advised that Claire Emmerson, the Head of Finance, was to leave the Authority to take up a senior role in another Local Authority.  Members of the Committee offered their thanks and commented on the helpful way in which Claire had presented complex information in a format that was easily understood and they wished her every success in her future career.