Agenda item

Budget Setting & Budgetary Control Arrangements


(a)          That the report be noted; and


(b)          That the report of the Corporate Finance Manager be submitted to each Overview & Scrutiny Committee to seek feedback on the effectiveness of budget scrutiny arrangements.


The Corporate Finance Manager introduced a report with information on the Council’s budget setting and budgetary control systems to assist the Committee in fulfilling those responsibilities it had in relation to the Council’s financial affairs.  The report had been brought to provide clarity in this area, in response to previous discussion at the Committee.


The report set out the role of the Committee on financial matters as set out in its Terms of Reference, in comparison to that of Overview & Scrutiny and County Council.  It was noted that Overview & Scrutiny Committees had a role in scrutinising the use and value for money of expenditure in services and making recommendations to Cabinet on areas within their remit.  The Corporate Finance Manager gave an overview of the budget setting process including consultation on detailed proposals with Overview & Scrutiny Committees at the end of each year prior to final budget setting by 11 March.  He referred to regular budget monitoring reports submitted to Overview & Scrutiny Committees and explained that officer responsibilities for budgetary control, monitoring and reporting were set out in the Financial Procedure Rules which were reviewed by the Audit Committee.


Mr. Paul Williams welcomed the report and asked the Wales Audit Office (WAO) colleagues present for their views on what the Committee could do further to gain assurance on budgetary control systems and whether the Overview & Scrutiny Members on the Committee were satisfied with the system in place.  Mr. John Herniman of WAO said that the Committee must satisfy itself that the process was effective and suggested that assurance could be sought through the Overview & Scrutiny function.


As Chairman of the Lifelong Learning Overview & Scrutiny Committee, Councillor Ian Roberts gave his view that the process was effective as Members were consulted on detailed budget proposals and were given the opportunity to make recommendations for endorsement at full Council.  The Chairman of the Audit Committee shared this view in respect of the Corporate Resources Overview & Scrutiny Committee.


Councillor Arnold Woolley referred to concerns raised on the auditing of value for money at a recent meeting of the Corporate Resources Overview & Scrutiny Committee.  The Head of Legal & Democratic Services said that increasing financial pressures would require the Cabinet to be assured of value for money or undertake more work to seek further efficiencies.  Overview & Scrutiny would need to ascertain whether efficiencies could be found elsewhere to protect cuts to services.  The Terms of Reference of the Audit Committee included statutory provisions along with a broader role on financial issues, enabling the Committee to seek clarity on value for money work.  At the previous meeting, the Chief Executive had agreed to discuss with the Internal Audit Manager a consistent mechanism for checking controls to help Overview & Scrutiny Committees in gaining assurance on value for money and information on this would be brought by the Internal Audit Manager.


The Internal Audit Manager confirmed that following discussion with the Chief Executive, work was underway on the value for money review, taking into account areas of best practice from outside organisations.


Mr. Herniman said that the Annual Governance Statement was a key document for the Committee in relation to assuring effective arrangements including budgetary controls, and that scrutiny of budget setting on services should remain under the remit of Overview & Scrutiny.


Mr. Williams suggested that it may be useful for the Corporate Finance Manager’s report to be shared with Overview & Scrutiny Committees and for them to feed back to the Audit Committee on their satisfaction with the systems in place.  The Head of Legal & Democratic Services said that the report could be shared with Overview & Scrutiny Chairs or perhaps more appropriately, through the informal meeting arrangement, together with discussion on exploring the development of value for money reporting.


Mr. Williams felt that a more formal process was needed to receive feedback from the Overview & Scrutiny Chairs.


Councillor Woolley suggested that the Committee may wish to extend consideration of value for money issues to include procurement and tendering, particularly where contractors successful in the tendering process had used sub-contractors on those jobs.  No support was forthcoming from the Committee on this suggestion.


The Head of Legal & Democratic Services said that specific concerns on tendering should be brought to the attention of himself, the Internal Audit Manager or Corporate Finance Manager, and gave a reminder that such items could be included on the Audit Plan, although availability of time was limited.


In response to Mr. Williams’ suggestion, Councillor Roberts proposed that the Corporate Finance Manager’s report be shared with each Overview & Scrutiny Committee meeting to seek their feedback on the effectiveness of budget scrutiny arrangements, rather than just receiving the views of Chairs.  This was duly seconded by the Chairman and agreed by the Committee.


Councillor Haydn Bateman referred to the budget monitoring element on identifying variances to determine whether these were likely to be one-off or recurring.  The Head of Legal & Democratic Services explained that any underspends were analysed by service managers to establish whether to remove those allocations from the budget.  The Audit Committee should be satisfied that this process was working effectively and being monitored by Overview & Scrutiny in respect of one-off underspends and those recurring for future years.


When asked by Mr. Williams how the Audit Committee was able to monitor and challenge this, Mr. Herniman said that analysis of variances were reported and that in preparing the Annual Governance Statement (AGS), the Committee could seek assurance from Overview & Scrutiny Members and decide whether further work was needed.


In response to Mr Williams’ suggestion that this could be built into the process for the AGS this year, the Democracy & Governance Manager stated that preparations were at an advanced stage, as discussed informally with the Committee prior to the meeting.  Whilst the Committee timetable did not allow sufficient time for feedback to be sought from Overview & Scrutiny Committees prior to submitting the AGS for approval within the deadline this year, this could be addressed for next year’s AGS.  He added that the informal meeting with Members and questionnaire previously sent to Overview & Scrutiny Chairs responded to the previous request for more Member involvement in the AGS process.


Councillor Glyn Banks said that duplication in workload should be avoided, although it was inevitable that there would be some overlap between the roles of the Audit Committee and Overview & Scrutiny Committees, which should be acceptable if the right outcome was achieved.


On the point raised by Councillor Woolley, Councillor Banks commented on the likelihood of a sub-contracting element in most cases of contract work.  Councillor Woolley said that this raised a number of issues such as verification of health and safety, qualifications and performance to ensure delivery of a quality service and value for money.


Ms. Amanda Hughes of WAO said that in preparation for next year’s Annual Governance Statement, the Committee may wish to have assurances on procurement and value for money along with assurances on budgetary control.




(a)          That the report be noted; and


(b)          That the report of the Corporate Finance Manager be submitted to each Overview & Scrutiny Committee to seek feedback on the effectiveness of budget scrutiny arrangements.

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