This report informed the Committee of the matters arising from the audit of the 2021- 22 Statement of Accounts. The audited Statement of Accounts were approved by the Committee on 26 January 2023. Following completion of the audit, Audit Wales made a number of recommendations. Their letter is attached at Appendix A.
Appendix 1 of the Audit Letter set out six recommendations following the audit of the Council’s Statement of Accounts. Officers have taken on board the recommendations, and progress against those recommendations is also noted in the Appendix. Audit Wales will conduct a review of those recommendations during their audit of the 2022-2023 Statement of Accounts.
A Member drew attention to the issue of duplicate payments. Testing of eighteen expenditure transactions identified one duplicate payment, and further testing of an additional thirteen potential duplicate payments identified a further two duplicates. The value of the three duplicate payments identified totalled £4,884.71.
The Member was concerned about the management response to this given how many possible duplicate payments there could be every year. Three out of thirty-one is virtually 10% and 10% of all payments would be a large number. He wanted to know what practices have been put in place to pick up duplicate payments that were not considered in the sample and asked what happens when duplicate payments cannot be recovered.
The Group Manager – Chief Accountant indicated that the council processed a huge volume of payments and transactions during the year and there were processes whereby before payment runs are issued, there are a number of checks done to look for as many duplicates as possible. They looked at things like identical invoice numbers, dates, descriptions, etc, but unfortunately a number of these, as were identified in that sample, have fallen through those checks. He indicated that they needed to go back and see how checks could be strengthened so the Council isn't paying twice for anything.
The Chief Officer – Finance, Performance and Change indicated there were recovery processes in place, and she made a commitment to summarise them and send them to Members.
A Member noted that recipients of duplicate payments must be under an obligation to return the money and wondered if contracts could be strengthened with conditions obliging repayment in those circumstances.
A Lay Member drew attention to the discussion later in the meeting on the Audit Plan and in particular, the review of financial systems, a rolling programme of audits adopted. He stressed that it would be good to know what the programme looks like and where payments fit in the cycle. Payments could be a good contender for review.
Another Member drew attention to the issue of surplus assets and the example highlighted in the report.
The Group Manager – Chief Accountant confirmed the Council holds the assets discussed and they aren't sold assets. He indicated that the appropriate process will be applied moving forward for any assets declared surplus to the Council’s needs.
A representative from Audit Wales, referring to the issue of duplicate payments, highlighted that because it was an issue last year, it will form part of their risk assessment this year. He also drew attention to the work of the National Fraud Initiative, which he described as another defence mechanism in terms of public money.
A Member thought it worth noting that the letter was clear that Audit Wales had no concerns about the qualitative aspects of the council’s accounting practices and financial reporting. They did not identify any material weaknesses in internal controls, but they did identify some potential areas for improvement.
The Chairperson made a number of concluding remarks about those issues highlighted in the report, and discussed by Members, including duplicate payments, journal authorisations procedures, surplus assets, and IT server-room risks.
Subject to the strengthening of the responses, the Committee noted the matters arising letter from Audit Wales, along with the recommendations and responses as attached at Appendix A.