Cumberland Council’s financial arrangements to be discussed at meeting next week

Councillors will next week get an insight into a number of “significant weaknesses” in Cumberland Council’s financial arrangements which were identified by auditors.

Members of the full council are due to meet at Allerdale House in Workington on Wednesday (April 2) to hear a presentation from auditors Grant Thornton on their report – External Auditor’s Annual Report 2023/24 (Statutory Recommendations).

Members are asked to:

-Accept the statutory recommendation in the auditor’s annual report;

-Agree the management response; and

-Request that audit and risk committee continue to monitor progress against the action plan.

It was originally considered by members of the council’s audit and risk committee in February before being referred to the full council with a number of statutory recommendations aimed at improving the situation.

At the audit committee meeting members heard that council staff had been under pressure due to the extra work required to publish the outstanding legacy accounts of the former authorities.

According to the report the significant weaknesses were in areas including: financial sustainability; governance; and improving economy, efficiency and effectiveness.

Relating to the statutory recommendation the report states: “The council must address the capacity challenges within the finance team, along with developing the capability of the team.

“The council should ensure arrangements are in place to meet the statutory deadlines for publishing financial statements including accelerating progress with the transformation and consolidation of financial systems.

“Council must decide whether to accept the statutory recommendation and what, if any, action to take in response to the recommendation.”

The report also states, relating to financial sustainability, the council is in a challenging financial position and has applied for ‘exceptional financial support’ over the three years from 2023/24 to 2025/26.

Auditors identified two significant weaknesses in relation to financial management and the delivery of the transformation programme to achieve required savings.

The report states: “We also raise two improvement recommendations. These relate to the delivery of the climate change action plan and development of the workforce strategy.”

Relating to governance, as a new organisation the council faces many challenges, including significant issues inherited from legacy bodies that have yet to be addressed, including a lack of a sufficient financial team capacity and preparedness in 2023/24 which contributed to delays in publishing draft financial statements.

Three risks of significant weaknesses were identified and auditors raised three improvement recommendations relating to counter-fraud controls, risk management and internal audit arrangements.

And, relating to improving economy, efficiency and effectiveness, there were significant weaknesses in the arrangements for monitoring performance throughout 2023/24.

These related to ensuring appropriate skills and capacity to deliver services and the transformation programme and one key recommendation was made which relates to procurement and contract management.