The Audit and Governance Committee noted the 2022-2023 Annual Audit Report, the 2023-2024 Annual Internal Audit Report, and the Internal Audit Progress Report. They also discussed issues relating to the outturn position of the Council's budget.

Annual Audit Report 2022-2023

The Committee received the Annual Audit Report for 2022-2023, which was prepared by the Council’s external auditor EY.¹ The report concluded that the Council's accounts were accurate and properly managed. However, it did raise several recommendations for improvement. You can read the full report on the Council's website: Appendix A North Northamptonshire Council AAR 2022-23 - Final - 16 May 2024.

The Committee discussed the report's findings, particularly its conclusion that the Council’s financial statements were “misstated” and needed to be corrected before they could be formally signed off.

These misstatements were not identified by the Council and were subject to an adjustment at the end of the audit.

This issue was of significant concern to the committee, who questioned why the Council’s own internal checks had not identified these problems earlier. The assistant director of finance gave the following response:

The errors that were made that related to the misstatement were as a result of human error.

The assistant director of finance assured the committee that measures were being put in place to prevent similar errors from happening again. These included:

...strengthening our financial procedures... We are also investing in training for our staff...

The Committee noted the report and its recommendations.

Internal Audit Plan 2024/25

The Committee reviewed and approved the draft Internal Audit Plan for 2024/25. The plan outlined the areas of the council that would be reviewed by the internal audit team over the coming year. The Executive Director of Finance will have the authority to agree amendments to the plan throughout the year in consultation with the Chair of the Audit and Governance Committee. You can read the full plan on the Council's website: Annual Report of IA 2024 Appendix 1.

Internal Audit Progress Report

The Internal Audit Progress Report provided an update on the work of the internal audit team. The committee noted the report, which can be read on the council's website: Appendix 1 IA Progress report.

Outturn position

The committee discussed the council’s current financial position in comparison to the budget that was agreed at the start of the year. It was noted that there were some areas where spending was likely to be higher than expected, and others where income was lower than expected.

The assistant director of finance explained that the main pressures on the budget were:

• Increased demand for services, particularly in social care.
  
• The rising cost of energy and fuel.
  
• The impact of inflation on the cost of goods and services.

The committee expressed concern about the potential impact of these pressures on the Council’s ability to balance its budget. They asked for more information to be brought to future meetings so that they could scrutinise the council's financial performance.