Agenda item

We received the Wales Audit Office (WAO) financial resilience assessment for Monmouthshire County Council.  We were informed that a piece of work had been carried out by the Wales Audit Office across each Council in Wales.  The focus was on answering the question is Monmouthshire County Council managing financial reductions effectively to ensure financial resilience?

In carrying out this piece of work, the WAO looked at financial planning, financial control and financial governance to assess whether the authority was effectively supporting financial resilience.

For each council, the WAO risk rated each of these three areas being low, medium and high and in the case of Monmouthshire County Council, each element was rated as follows:

Financial Planning            -           medium

Financial Control                 -           medium

Financial Governance        -           low

The WAO concluded that Monmouthshire County Council has generally effective financial governance but its financial planning and control arrangements are not fully embedded or delivering effectively in the face of some significant financial challenges.  In respect of the three themes, financial planning, it was concluded that the Council’s financial planning arrangements continued to improve, although, the Medium Term Financial Plan was not fully balanced.  Some budget mandates did not define how savings would be achieved and some planned savings were unlikely to deliver.

In terms of financial control, the Council has established financial control arrangements, but the Council was uncertain whether it would remain within its 2015/16 revenue budget due to pressures in Social Services and non-delivery of parts of the savings plan.

In respect of financial governance, the Council, generally has effective financial governance arrangements in place.

The Head of Finance informed the Committee that she welcomed the report and it was pleasing that there was only one recommendation arising from it. In terms of the Authority’s risk rating in respect of financial control that was recorded at a time when the Authority didn’t know whether the forecast would come in on budget.  The 2015 financial year is now closed and the Authority drove a surplus out of that arrangement last year.  The Authority will take on board the recommendation made by WAO.

Having received the report and the views expressed, the following points were noted:

·         In response to a Member’s question regarding the level of savings and the level of understanding of Members when they make such decisions, the WAO representative stated that the WAO would hope that Members had clear information so that they understood the impact of the decisions that they were undertaking.  It was considered that Members did not have that level of understanding of the detail.

·         In response to a Member’s question regarding underspends and overspends, as outlined in paragraph 21 of the report, the WAO representative stated that what was being reflected in that paragraph was a considerable overspend in Social Services and considerable underspends in other services.  Therefore, in terms of financial control there is a question for the WAO regarding the Council’s level of financial control.

·         It was noted that if a post had been vacant for some time, then it would not be unreasonable for councils to put this post forward as a potential saving.

·         It had been recognised that some mandates had not been clear and the Authority had struggled last year in formulating its mandates.  The Future Monmouthshire review will address these issues.

We resolved to receive the report and noted its content.