Agenda item

The Assistant Director of Corporate Governance and Strategic Financial Management presented a report which provided the Committee with an update on the draft Annual Governance Statement for the financial year 2020/21.

The Committee noted this report supported the draft Statement of Accounts which were considered elsewhere on the Agenda.

The Committee was informed that the Council, as part of its Statement of Final Accounts produced an Annual Governance Statement. This identified the significant governance issues that the Council needed to consider at the financial year-end to reduce its risk.

Members noted that, at regular meetings of the Committee, update reports had been produced, highlighting the progress made on issues identified for improvement in the Annual Governance Statement produced for 2019/20 and identifying new issues that required consideration. This had informed the production of the Annual Governance Statement for 2020/21.

The 2019/20 Annual Governance Statement (AGS) had identified a total of nine issues for the Council, which had been were monitored in the financial year 2020/21 understand how the risk to the Council was being reduced. The issues highlighted included the need to strengthen internal control within both the Payroll Service and the financial administration systems in Adult Social Care. Both matters had been long term issues for the Council to address.

The Committee was informed in respect of payroll there had continued to be improvements in administration which, supported by the implementation of the new MYHR system, meant there was potential in 2021/22 for the opinion to be improved to adequate. The Annual Report showed, due in part to COVID, the administration linked into Adult Social Care had not improved, and as the opinion for the Residential Care audit showed, had declined in 2020/21. As such this might be an area for the Audit Committee to request be subject to a future report when the annual work programme was prepared for the September meeting.

Members noted that progress made to improve arrangements linked into contracting and commissioning would also be incorporated into the future work programme. It was suggested that reports be submitted on this topic to the planned September and March meetings.

Members were informed that, along with other issues to be included in the 2020/21 AGS, it was proposed to add one extra issue linked into ongoing legal issues which were not resolved, involving third parties and other local authorities. If the local authorities lost those cases, it had the potential to impact the future resilience of the Council in future financial years.

Pre COVID it was planned that 2020/21 would be the year local authorities implemented the Financial Management Code. The Council had continued its preparation for this during the financial year and completed a self-assessment which had identified the Council was compliant with a number of requirements in advance of the financial year 2021/22. Looking forward, the most challenging Principle for the Council to demonstrate compliance would be Principle A, involving the management arrangements for Statutory Officers.

Members asked for clarification of the issues around Adult Social Care and were informed that this was a challenging area in most authorities. It had been difficult to programme financial reviews and additional support was being considered. The service was looking to make improvements and this would be a long-term issue.

RESOLVED that the draft Annual Governance Statement included within the draft Statement of Accounts for the financial year 2020/21 be noted.