Agenda item

Georgia Jones, Key Audit Partner, presented the report.

Under the National Audit Office Code of Audit Practice, the external auditors were required to consider whether the Service had in place, proper arrangements to secure economy, efficiency, and effectiveness in its use of resources.

As reported, the audit was substantially complete, and the auditors expected to issue an unqualified audit opinion following the Audit Committee meeting subject to receipt of the management letter of representation and final quality procedures.

The review of value for money arrangement covered the 3 areas of: i) financial sustainability; ii) governance and iii) improving economy, efficiency, and effectiveness.

Georgia Jones drew the Members attention to Page 150 of the agenda pack and the overall summary of the Value for Money assessment of the Authority’s arrangements. Improvements had been made from the previous year and the 2023/24 Auditor judgements on arrangements were:

-        Financial Sustainability – No significant weaknesses in arrangements were identified, but one improvement recommendation had been made to support the Authority in improving arrangements relating to efficiency savings. The recommendation related to reporting of planned and achieved savings.

-        Governance – No significant weaknesses in arrangements were identified, but seven improvements had been made to support the Authority in continuing to improve its arrangements.

-        Improving economy, efficiency, and effectiveness.

Members noted that improvement recommendations were good practice and did not suggest that there were issues with exiting arrangements.

The auditor’s review did not identify any significant weaknesses in arrangements across any of these areas, but had made 10 improvement recommendations as set out on pages 167 to 171 of the agenda pack as now considered by Members:

1.     Recommendation – That the Authority should consider making improvements to the reporting of plans to bridge identified gaps in the revenue budget, and performance against savings and efficiency plans, by:

-        disaggregating efficiency savings from adjustments to revenue contributions to capital in the MTFS summary table; and

-        reporting specifically on efficiency savings achieved as compared to the approved plan, within the quarterly financial update.

The Authority should continue development of its savings plan in advance of 2026/27, including consultations and costing of invest-to-save projects, so that delays in implementation could be avoided. Savings plans should be subject to quality impact assessments where appropriate, and responsibilities for delivery of savings should be clearly assigned.

Management Comment – Noted, budget monitoring reports to the Resources Committee would be developed to include progress against agreed savings plans in the MTFS.

2.     Recommendation – The Authority should consider opportunities to improve risk management by:

-        consolidating very similar risks and actions to reduce duplication in the Corporate Risk Register;

-        adding environmental risks to the risk scoring criteria;

-        providing more comprehensive information to the Audit Committee, such as residual risk scores and action owners/timelines for implementation;

-        mapping corporate risks to the strategic objectives outlined in the Community Risk Management Plan.

Management Comment – Noted, the corporate risk register was based on NFCC national best practice and whilst it could look like duplication, the Service had adopted sector best practice. As part of the ongoing review of the risk management processes, the proposal would be considered.

3.     The Authority should consider enhancing the level of detail within Internal Audit progress reports to the Audit Committee, to include details of recommended actions, management’s response, timelines for completion of actions and confirmation that actions had been completed.

Management Comment – Noted, it would be discussed with the Internal Audit team.

4.     It was recommended that the Authority considered expanding the quarterly financial update to the Resources Committee to include:

-        year to date revenue outturn against year-to-date budgets, and reasons for variances; and

-        details of the best-case and worst-case outcomes against the revenue and capital budgets (and the basis for those estimates).

Management Comment – Noted, the Service would consider developing the monitoring reports further to provide additional analysis.

5.     The Authority should consider introducing referencing of meeting agendas and papers to the Authority’s strategic objectives around as outlined in the CRMP.

Management Comment – Noted, the Service continually reviewed the information provided to Members and would consider the improvement recommendation.

6.     The Terms of Reference for every Committee should include quoracy conditions and should be reviewed at least every three years.

Management Comment – Noted, the TOR had recently been updated to include this.

7.     The Authority should take action to review policies and procedures (including Service Orders) where this was identified as being overdue. Following review, policies and procedures should be approved by the Authority or appropriate Committee, even where no changes had been made.

Management Comment – Noted, out of date policies and procedures would be brought up to date.

8.     The Authority should establish, implement, and embed procedures to provide assurance that Contract Standing Orders were adhered to in all instances.

Management Comment – Noted, improvements were being put in place now resourcing issues in the procurement teams had been resolved.

9.     The Authority should consider including information on performance against the capital plan in the quarterly performance monitoring reports provided to the Performance Committee. The Authority should continue to seek to mitigate slippage and delays in the delivery of the capital programme.

Management Comment – Noted, the performance report included revenue performance and not capital and they were reported in detail to the Resources Committee and the CFA. The performance report would be reviewed to ensure consistency.

10. The Authority should implement a framework for structured and consistently applied contract management. Contract management for key service contracts such as North West Fire Control collaboration and PFI agreements should be prioritised. Arrangements should include:

-        regular reviews of existing contracts to safeguard the achievement of value for money and compliance with legal and regulatory requirements;

-        monitoring of contract performance and deliverables against key performance indicators and other measures to identify and resolve service performance issues; and

-        reporting of contract management activity to the Authority or Performance Committee.

Management Comment – Noted, the service would be reviewing Contract Management arrangements against best practice during 2025/26 as identified in the Procurement Strategy.

Georgia Jones informed Members that the external auditors were satisfied with the responses they had received to their recommendations.

Resolved: - That the Committee noted the management comments and endorsed the content of the report as presented.