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Stafford Borough Council ordered to improve financial planning arrangements following audit

Stafford Borough Council has been ordered to improve its financial planning and monitoring arrangements after an external audit found five 'significant weaknesses'.

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Stafford Borough Council ordered to improve financial planning

The authority needs to ensure it has adequate capacity in its finance team and make sure budget holders receive formal financial monitoring reports during the year, auditors Grant Thornton have said in a report covering the years 2021/22 and 2022/23.

But council bosses have said action is being taken to address the issues raised, which happened at the time of the Covid pandemic. And it was acknowledged by Grant Thornton director Avtar Sohal that the council had “moved on” from the position described in the report.

Speaking at a joint cabinet and Audit and Accounts Committee meeting on Tuesday Mr Sohal said: “Our work identified five significant weaknesses and one which has a statutory recommendation; the reason for it being a statutory recommendation is to express that there is an urgent action needed to address the weakness and put measures in place so that the council can get back on track.

"The statutory recommendation is around financial monitoring arrangements and putting back in place the measures that were there pre-Covid, where members were getting adequate financial monitoring, financial statements done on time and making sure all financial arrangements are robust and in place.

“From my perspective, the reason why the council is probably in this position is over Covid there has been a lack of capacity. There had to be decisions on what to prioritise.

“I don’t think it’s been done by negligence or want of doing things, it’s just the council making choices of what to prioritise. Over that period we know there were some staff sicknesses and retirements and there’s implications of a new financial ledger – all of these pressures add to a financing team which was probably at full capacity at that point in time.

“As time moves forward we can see there are movements in place that are addressing some of these weaknesses. But it does take time to address them.”

The council’s chief executive Tim Clegg thanked the auditors for their work to highlight the issues. He said: “It’s never comfortable to understand that there are things we need to improve on, but it’s a really helpful thing.

“It’s given us the opportunity to reflect on our response to the issues that have happened. This is a backward-looking report out of necessity and we have taken steps to remedy the shortcomings that we’ve had.

“I think it’s been really helpful for us to be able to reflect not just on the issues identified by this audit report but also to look ahead to other issues that we may need to address in the future. We take responsibility for the issues set out in the in the report and we are committed to making the improvements we have set out in the recovery plan.”

Deputy chief executive Chris Forrester said additional money has been allocated for the finance team – £300,000 across both Stafford Borough and Cannock Chase councils, as well as £200,000 across the two authorities to support transformation.

The additional resources, for both staffing and IT systems, will be used to increase capacity as well as development of the finance system, budget monitoring, training for managers and support for key projects. Mr Forrester added that learning from what had happened would help the team going forward.

He said: “We can see there have been a number of areas we haven’t performed as well as we would have hoped, primarily around preparation and audit of final accounts, budget monitoring and then we have some weaknesses in our arrangements around IT systems, risk management and procurement and performance management.

"I think this is a moment in time, but it is also worth noting the world has moved on, driven by Covid, and subsequently demands on the corporate and back office functions are much greater now than they were previously.

“We’re doing a lot more projects, we’re having to do a lot more returns and certification work on top of the things we used to do. It’s a lot more challenging and it’s a complex environment to work in.”

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