Agenda Document Pack - Risk and Audit Scrutiny Committee - 06/05/2025
South Lanarkshire Council · 6 May 2025
Back to Risk and Audit Scrutiny Committee — 6 May 2025 and its agenda
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Council Offices, Almada Street Hamilton, ML3 0AA Monday, 28 April 2025 Dear Councillor Risk and Audit Scrutiny Committee The Members listed below are requested to attend a meeting of the Committee to be held as follows:- Date: Tuesday, 06 May 2025 Time: 10:00 Venue: Hybrid - Committee Room 1, Council Offices, Almada Street, Hamilton, ML3 0AA The business to be considered at the meeting is listed overleaf. Yours sincerely Paul Manning Chief Executive Members Elaine McDougall (Chair), Mary Donnelly (Depute Chair), Mathew Buchanan, Colin Dewar, Alistair Fulton, Ross Gowland, Celine Handibode, Susan Kerr, Richard Lockhart Substitutes Monique Equi, Gavin Keatt, Julia Marrs, Helen Toner 1
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BUSINESS 1 Declaration of Interests 2 Minutes of Previous Meeting Minutes of the meeting of the Risk and Audit Scrutiny Committee held on 18 February 2025 submitted for approval as a correct record. (Copy attached) 3 - 10 Item(s) for Noting 3 Internal Audit Activity as at 11 April 2025 Report dated 15 April 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 11 - 26 4 Audit Scotland Financial Bulletin 2023/2024 Report dated 8 April 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 27 - 32 5 Financial Resources Scrutiny Forum Activity Report dated 3 April 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 33 - 36 6 Forward Programme for Future Meetings Report dated 11 April 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 37 - 40 Urgent Business 7 Urgent Business Any other items of business which the Chair decides are urgent. Clerk Name: Elizabeth-Anne McGonigle Clerk Telephone: 07385403101 Clerk Email: elizabeth-anne.mcgonigle@southlanarkshire.gov.uk 2
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RISK AND AUDIT SCRUTINY COMMITTEE Minutes of meeting held via Confero and in Committee Room 1, Council Offices, Almada Street, Hamilton on 18 February 2025 Chair: Councillor Mary Donnelly (Depute) Councillors Present: Councillor Colin Dewar, Councillor Alistair Fulton, Councillor Ross Gowland, Councillor Julia Marrs (substitute for Councillor Elaine McDougall), Councillor Susan Kerr Councillors' Apologies: Councillor Mathew Buchanan, Councillor Celine Handibode, Councillor Richard Lockhart, Councillor Elaine McDougall (Chair) Councillor Also Present: Councillor Joe Fagan (for item 3) Attending: Chief Executive’s Service P Manning, Chief Executive (for item 3); T Little, Head of Communications and Strategy Community and Enterprise Resources M Wilkie, Performance and Policy Development Manager Education Resources G Lambie, Operations Manager Finance and Corporate Resources J Taylor, Executive Director; Y Douglas, Audit and Compliance Manager; B Hall, Administration Officer; E-A McGonigle, Administration Adviser; M Milne, Head of Personnel Services; A Norris, Administration Assistant; L O’Hagan, Head of Finance (Strategy); I Strachan, Head of Administration and Legal Services Also Attending: Audit Scotland J Boyd and A Barclay, External Auditors Chair’s Opening Remarks The Chair reminded members that there would be an awareness session for the Committee following the business of the meeting. 1 Declaration of Interests No interests were declared. 2 Minutes of Previous Meeting The minutes of the meeting of the Risk and Audit Scrutiny Committee held on 19 November 2024 were submitted for approval as a correct record. The Committee decided: that the minutes be approved as a correct record. 2 3
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3 Good Governance Update A report dated 30 January 2025 by the Executive Director (Finance and Corporate Resources) was submitted providing an update on the Council’s governance arrangements. Each year, the Council undertook a comprehensive review of the governance arrangements required to support its financial and operational controls. The annual review of governance arrangements informed the Governance Statement which was included within the Council’s Annual Accounts. As part of this annual review, the Council’s Local Code of Corporate Governance was reviewed, updated and republished. Compliance with the Code was also reviewed on an annual basis and Appendix 1 to the report provided details of the Council’s compliance with the Code. Details of the amendments made to the Code, following the review, were provided and the revised Code was attached as Appendix 2 to the report. Progress on the significant governance areas, as highlighted within the Annual Governance Statement 2023/2024, was detailed in Appendix 3 to the report. The Executive Director (Finance and Corporate Resources) responded to a member’s questions in relation to:- financial challenges, specifically the reported budget gap for 2025/2026 and the probable outturn South Lanarkshire Leisure and Culture (SLLC) and the progress against the 3 key workstreams The Committee decided: (1) that the findings from the annual compliance check against the Local Code of Corporate Governance be noted; (2) that the updated Local Code of Corporate Governance, as detailed in Appendix 2 to the report, be approved; and (3) that progress against the significant governance areas identified within the Annual Governance Statement 2023/2024, as detailed in Appendix 3 to the report, be noted. [Reference: Minutes of 26 March 2024 (Paragraph 3)] 4 Internal Audit Plan 2025/2026 A report dated 27 January 2025 by the Executive Director (Finance and Corporate Resources) was submitted seeking:- approval of the revised Internal Audit Mandate and Charter endorsement of the Audit Strategy approval of the proposed Internal Audit Plan for 2025/2026 Internal Audit formed part of the Council’s wider governance framework. Output from the function was the delivery of a planned programme of internal audit assignments. Each assignment was formally reported to the Committee and an audit opinion expressed which was based on the level of assurance that testing had provided. The definitions of the various levels of assurance that were expressed within an audit report were provided in Appendix 1 to the report. Those assurances informed an overall audit opinion of the adequacy and effectiveness of the Council’s framework of governance, risk management and control arrangements that were reported to the Committee and captured in the Council's Governance Statement which formed part of the Annual Accounts. 4
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In previous years, the function operated within the context of an Internal Audit charter and a set of internal audits standards known as the Public Sector Internal Audit Standards (PSIAS). From 1 April 2025, those Standards would be replaced by the Global Internal Audit Standards (GIAS). The new Standards had been issued by the Internal Audit Standards Board and endorsed by the Institute of Internal Auditors. The GIAS set out a role for those “charged with governance” within an organisation and within the Council, that was the Risk and Audit Scrutiny Committee. The requirements of the new Standards were set out in paragraphs 4.2 to 4.8 of the report and a copy of the proposed Internal Audit Mandate and Charter was attached as Appendix 2 to the report. A further element of the overall workplan that the Standards referenced was the Audit Strategy. The Audit Strategy, that underpinned the 2025/2026 Internal Audit Plan, was set out in Appendix 3 to the report. The broad aims of the Strategy were set out in paragraph 5.1 of the report. The Audit Strategy would be developed further in 2025/2026. At the outset of the planning process each year, capacity to deliver the Audit Plan had to be determined. Capacity in 2025/2026 had been adjusted to remove the time to deliver audit plans for the function’s 4 external clients, as detailed in paragraph 6.1 of the report. The process had determined that 1,208 days were available to deliver the Council’s Audit Plan for 2025/2026. Further details on the planning themes and content of the plan were provided in paragraphs 6.2 to 6.8 of the report. The draft Internal Audit Plan 2026/2026 was attached as Appendix 4 to the report. The Committee decided: (1) that the revised Internal Audit Mandate and Charter be approved; (2) that the Audit Strategy be endorsed; and (3) that the proposed Internal Audit Plan for 2025/2026 be approved. [Reference: Minutes of 26 March 2024 (Paragraph 4)] 5a South Lanarkshire Council Annual Audit Plan 2024/2025 The Committee considered the South Lanarkshire Council Annual Audit Plan for 2024/2025 submitted by Audit Scotland, the Council’s External Auditor. The Plan set out the audit work necessary to allow Audit Scotland to provide an independent auditor’s report and meet the wider scope requirements of public sector audit which included assessing arrangements for:- financial management financial sustainability vision, leadership and governance use of resources to improve outcomes The planned work on the wider scope responsibilities was risk based and, proportionate and in addition to local risks, challenges which were impacting the whole public sector would be considered. Based on the risk assessment process, significant risks of material misstatement to the financial statements had been identified and those were summarised in Exhibit 2 of the report. A risk around financial sustainability had been identified in the wider scope areas and Best Value and this was detailed in Exhibit 4 of the report. 5
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The Plan was structured around the following areas:- annual accounts wider scope and best value reporting arrangements, timetable and audit fee other matters Details were given on key aspects of those areas. As part of the annual work on Best Value, thematic reviews were conducted as directed by the Accounts Commission. In 2024/2025, the subject of the thematic review was service transformation and involved considering how the Council was redesigning services to maintain outcomes and deliver services more efficiently. The Committee decided: that the report be noted. Councillor Scott joined the meeting during this item of business 5b South Lanarkshire Council Charitable Trusts’ Annual Audit Plan 2024/2025 The Committee considered the South Lanarkshire Council Charitable Trusts’ Annual Audit Plan for 2024/2025 submitted by Audit Scotland, the Council’s External Auditor. The purpose of the Annual Audit Plan was to provide an overview of the planned scope and timing of the 2024/2025 audit of South Lanarkshire Council Charitable Trusts’ annual accounts. The audit was performed in accordance with the Code of Audit Practice, including supplementary guidance, International Standards on Auditing (UK), and other legislation. The Plan was structured around the following areas:- annual accounts wider scope and best value reporting arrangements, timetable and audit fee other matters Details were given on key aspects of those areas. The audit of the annual accounts was driven by materiality and the risks of material misstatement in the financial statements, with greater attention given to the significant risks of material misstatement. Based on a risk assessment process, significant risks of material misstatement to the financial statements had been identified and those were summarised in Exhibit 2 of the report. There were no significant risks identified in the wider scope areas or Best Value from the risk assessment process. The Senior Auditor advised of a typographical error in Exhibit 3 whereby the date of signing the Independent Auditor’s Report and issue of Annual Auditor Report should be 30 September 2025. An updated copy of the report would be circulated to members following the meeting. The Committee decided: that the report be noted. 6
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6 Global Internal Audit Standards A report dated 28 January 2025 by the Executive Director (Finance and Corporate Resources) was submitted setting out the requirements and responsibilities of the new Global Internal Audit Standards (GIAS), Application Note: Global Internal Audit Standards in the UK Public Sector and the draft Code of Practice for the Governance of Internal Audit in UK Local Government, applicable from 1 April 2025. Internal Audit within the Council formed part of the Council’s wider governance framework. Previously, the function operated within the context of the Internal Audit charter and a set of audit standards known as the Public Sector Internal Audit Standards (PSIAS). From 1 April 2025, those Standards would be replaced by the GIAS. As an audit committee, the Risk and Audit Scrutiny Committee had a key role to play in ensuring that the internal function adhered to the GIAS and fulfilled its mandate effectively and efficiently. Therefore, the Risk and Audit Scrutiny Committee must be familiar with the new Standards and their implications. The Standards were supplemented by 2 documents:- a draft Code of Practice for the Governance of Internal Audit in Local Government which reflected the legislation and practices of local government bodies an application note that would assist with the implementation of the GIAS by addressing areas where interpretation or adjustments were required for the public sector From an organisational perspective, the core principles of Internal Audit, codes of ethics, standards and guidance were now incorporated within a single Standard. Those Standards provided confidence that a quality internal audit service, based on conformance with standards, delivered assurance alongside advice, insight, oversight and foresight. The role of the internal audit function was envisaged as one that enhanced an organisation's ability to serve the public interest. The Standards were based on 15 core principles and set across the following 5 domains, which were fully detailed in paragraph 4.6 of the report:- purpose of internal auditing ethics and professionalism governance of the Internal Audit function managing the internal Audit function performing Internal Audit Services Compliance with the Standards continued to be a self-assessment exercise, with periodic independent external inspection, and for this to be reported on an annual basis. For the Council, the outcome of the first self-assessment would be reported within the 2025/2026 Annual Assurance Report, with the first external assessment anticipated to be in 2027/2028. A summary of the main changes in the GIAS were detailed in paragraph 4.9 of the report. The current audit process was being reviewed to ensure compliance. An action plan was being developed as required. A new requirement, as set out in the GIAS, was the development of an Internal Audit Mandate and Charter and details were provided in paragraphs 4.11 and 4.12 of the report. Circumstances might require either, or both, the Internal Audit Mandate or elements of the Internal Audit Charter to be amended or updated. Should such a revision be required, the updated Mandate or Charter would be presented to the Committee and senior management for approval. 7
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Separately, the Chief Internal Auditor was required to develop an Audit Strategy that underpinned the Annual Internal Audit Plan and supported the strategic objectives of the organisation. Both the Mandate, Charter and Audit Strategy were presented along with the Internal Audit Plan for approval as part of a separate report presented to the Committee. The role of the audit committee was set out in some detail in Domain Three “governance of the Internal Audit function”, and the main element of this Domain was detailed in paragraph 4.16 of the report. Audit assignments undertaken in 2025/2026, and the Annual Report for this year and onwards, would also reflect the requirements of the new Standards. The Committee would receive routine updates within Internal Audit Activity Reports on compliance with the new Standards. The Committee decided: that the requirements and responsibilities of the new Global Internal Audit Standards, Application Note: Global Internal Audit Standards in the UK Public Sector and the draft Code of Practice for the Governance of Internal Audit in UK Local Government, applicable from 1 April 2025, be noted. 7 Internal Audit Activity as at 24 January 2025 A report dated 24 January 2025 by the Executive Director (Finance and Corporate Resources) was submitted on work completed by Internal Audit during the period 1 November 2024 to 24 January 2025. Findings from internal audit assignments were reported to this Committee throughout the year and the last progress report was considered by this Committee on 19 November 2024. Information was provided for Internal Audit work completed during the period 1 November 2024 to 24 January 2025. As at 24 January 2025, 98% of the 2024/2025 Audit Plan was in progress with only one assignment in relation to the annual update of fraud risk registers still to commence. Of the 98% of the Plan that was in progress, 34% was at draft report stage with a further 24% which related to assignments that run throughout the year and would be closed at 31 March 2025. Assignments completed in the period 1 November 2024 to 24 January 2025, together with a summary of overall assurances, were detailed in Appendix 1 to the report. Key performance indicators for the period to 31 December 2024 were included in Appendix 2 to the report. The Internal Audit function within the Council would continue to comply with the Public Sector Internal Audit Standards (PSIAS) in delivery of the Internal Audit Service in 2024/2025. Preparatory work was underway to ensure that the Internal Audit function complied with the new Global Internal Audit Standards (GIAS) which would apply from 1 April 2025. An update was also provided on progress against the Audit Strategy which was a requirement of the PSIAS. Delivery of the 2024/2025 Strategy would be evidenced by the completion of the Internal Audit Plan in year and monitored during the year by performance indicators which were regularly reported to the Committee. The Committee decided: that progress on Internal Audit activity be noted. [Reference: Minutes of 19 November 2024 (Paragraph 3)] 8
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8 Fraud Statistics 6 Monthly Update 2024/2025 A report dated 22 January 2025 by the Executive Director (Finance and Corporate Resources) was submitted on fraud statistics for the 6 month period to 30 September 2024. Details were given on the number, types, outcomes and costs of fraud investigations, together with performance measures for the 6 month period to 30 September 2024. A comparison with the statistics for the same period in 2023 was also provided. The fraud statistics for the 6 month period to September 2024 highlighted that:- 27 investigations, with a total value of £8,000, had been reported in the period, representing a decrease in number from the same period in 2023 of the 198 open cases, 13, valued at £14,000, had been closed within the period, representing a decrease when compared to the closed investigations for the same period in 2023 10 of the 13 cases closed in the period were founded and those were all external Referrals from the Department for Work and Pensions (DWP) had been removed from the statistics to ensure that the caseload reflected only those cases where a potential fraud had been identified by the Council. Concerns reported in the 6 months to 30 September 2024 were relatively low, with cases coming primarily from suspected benefit fraud and whistle-blowing allegations. In addition to those cases summarised in the report, a further 35 South Lanarkshire Council investigations were being progressed by the DWP with a potential cumulative housing benefit/fraud value of around £50,000. On conclusion of investigations, the Council would seek repayment in line with standard recovery procedures. Services worked with the Security Coordinator or with Internal Audit to review and address gaps in controls identified during the investigation of cases. Where appropriate, improvement plans were agreed with the relevant Heads of Service and the actions followed up by Internal Audit to ensure implementation. Outcomes for concluded investigations were reported to the Committee as part of Internal Audit’s Annual Assurance report. Fraud was recognised as one of the top risks facing the Council, as detailed in paragraph 8.1 of the report. The Council’s Serious and Organised Crime (SOC) Working Group progressed the delivery of various actions which would be revised if new or emerging threats were identified through the pan Lanarkshire Multi Agency SOC Group. Updates would be presented to the Committee periodically. The Committee decided: that the contents of the report be noted. [Reference: Minutes of 24 September 2024 (Paragraphs 5 and 8)] 9 Performance and Review Scrutiny Forum Annual Update A report dated 28 January 2025 by the Chief Executive was submitted on reports considered by the Performance and Review Scrutiny Forum in the period from January to December 2024. A report on the business considered by the Performance and Review Scrutiny Forum would continue to be submitted to the Risk and Audit Scrutiny Committee on an annual basis. The Committee decided: that the report be noted. [Reference: Minutes of 30 January 2024 (Paragraph 5)] 9
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10 Forward Programme for Future Meetings A report dated 13 January 2025 by the Executive Director (Finance and Corporate Resources) was submitted on the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 10 March 2026. As part of future arrangements, members were invited to suggest topics for inclusion in the Committee’s forward programme. The Committee decided: that the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 10 March 2026 be noted. [Reference: Minutes 19 November 2024 (Paragraph 5)] 11 Urgent Business There were no items of urgent business. 10
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 6 May 2025 Report by: Executive Director Finance and Corporate Resources Subject: Internal Audit Activity as at 11 April 2025 1. Purpose of Report 1.1. The purpose of the report is to:- update the Risk and Audit Scrutiny Committee (RASC) on progress of the Internal Audit service in the period 25 January to 11 April 2025 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that progress is noted. 3. Background 3.1. Findings from internal audit assignments are reported to the Committee throughout the year. The last progress report to the Committee was in February 2025 and reported on work completed in the period 1 November 2024 to 24 January 2025. This report covers all work completed in the period 25 January to 11 April 2025. Performance information is also included. 4. Delivery of the Internal Audit Plan: Progress and Performance 4.1. As at 11 April 2025, 100% of the 2024/2025 Audit Plan is in progress. Of this, 94% of the Plan is at draft report stage. 4.2. Appendix 1 lists all assignments completed in the period 25 January to 11 April 2025 together with a summary of overall assurances from each area of work. 4.3. Key performance indicators for the period to 11 April 2025 are included at Appendix 2. 4.4. Members are asked to note progress. 5. Global Internal Audit Standards 5.1. The Internal Audit function within South Lanarkshire Council will continue to comply with the Public Sector Internal Audit Standards (PSIAS) in its delivery of an internal audit service in 2024/2025. 5.2. The new Global Internal Audit Standards (GIAS) will apply from 1 April 2025 with all future activity reports to the Committee reflecting the requirements of these new Standards. 3 11
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6. Chief Internal Auditors Group 6.1. Throughout the year, the Chief Internal Auditor’s Group in Scotland has convened meetings that have provided an opportunity to share best practice and attend presentations on topical issues. 6.2. A copy of the 2024 annual report is attached at Appendix 3 setting out the Group’s activities during the year. 7. Progress against Strategy 7.1. The PSIAS require progress against the audit strategy to be monitored and reported to the Committee as part of regular monitoring reports that are presented at each meeting. 7.2. Delivery of the strategy in 2024/2025 has been evidenced by the completion of the Internal Audit Plan in-year and monitored through the performance indicators regularly reported to the Committee. 8. Employee Implications 8.1. There are no employee issues. 9. Financial Implications 9.1. A breakeven position for 2024/2025 is anticipated at the end of the financial year for the Internal Audit section. 10. Other Implications 10.1. The main risks to the delivery of the Audit Plan are, generally, vacancies and team up-skilling requirements, unforeseen service demands and delays with client sign-off. These are mitigated by coaching and training, regular meetings and escalation processes as well as inclusion of contingency time within the annual plan. The risk of significant, subsequent amendments to the Plan, arising from a change in the Council’s priorities or risks, are mitigated by regular re-assessment of capacity and Audit Plan content to allow incremental adjustments as the year progresses. 10.2. There are no implications for sustainability in terms of the information contained in this report. 11. Integrated Impact Assessment and Consultation Requirements 11.1. There is no requirement to equality assess the contents of this report. 11.2. Heads of Service are consulted on each and every audit assignment. Jackie Taylor Executive Director Finance and Corporate Resources 15 April 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent 12
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Previous References Risk and Audit Scrutiny Committee - 2024/2025 Internal Audit Plan, 26 March 2024 Risk and Audit Scrutiny Committee - Internal Audit Activity as at 31 May 2024, 25 June 2024 Risk and Audit Scrutiny Committee - Internal Audit Activity as at 30 August 2024, 24 September 2024 Risk and Audit Scrutiny Committee - Internal Audit Activity as at 31 October 2024, 19 November 2024 Risk and Audit Scrutiny Committee - Internal Audit Activity as at 24 January 2025, 18 February 2025 List of Background Papers Figtree extracts of Action Plans Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Audit and Compliance Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 13
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Assignments completed 25 January to 11 April 2025 Appendix 1 Job Number Assignment name Draft Issue Final Issue Assurance Info I810046 2025/2026 Audit Plan 18/02/2025 18/02/2025 Preparation and presentation of the 2025/2026 Internal Audit Plan to RASC. I261119 External Audit Work 2024/2025 31/03/2025 31/03/2025 Provided data to External Audit re 2023/2024 and 2024/2025 financial year ends. I411098 Informal Follow Up 2024/2025 31/03/2025 31/03/2025 Provided quarterly advance prompts of actions falling due. Collated monthly responses for reporting. I614224 Refunds Duplicate Checks 31/03/2025 31/03/2025 Developed weekly duplicate refund checks. Analysed results and reported to Services for review. I640216 National Fraud Initiative (NFI) 2024/2025 31/03/2025 31/03/2025 Facilitated and administered closure of 2022 NFI Exercise and commencement of the 2024 NFI Exercise. I650221 Fraud Risk Register Review 31/03/2025 31/03/2025 Completed annual review of Resource Fraud Risk Registers. I710097 Child and Justice Advice and Guidance 2024/2025 31/03/2025 31/03/2025 Developed electronic monitoring records. I730090 Procurement Working Group 2024/2025 31/03/2025 31/03/2025 Attendance at and participation in internal working groups. I731092 Information Governance Board 2024/2025 31/03/2025 31/03/2025 Attendance at and participation in internal working groups. I732093 Scottish Local Authority Chief Internal Auditors Group (SLACIAG) 2024/2025 31/03/2025 31/03/2025 Attendance at and participation in external working groups. I732094 Scottish Local Authority Investigators Group (SLAIG) 2024/2025 31/03/2025 31/03/2025 Attendance at and participation in external working groups. I732095 Computer Audit Sub Group 31/03/2025 31/03/2025 Attendance at and 14
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(CASG) 2024/2025 participation in external working groups. I733096 PSIAS Conformance 31/03/2025 31/03/2025 Completion of PSIAS self-assessment. Findings will be reported within 2024/2025 Internal Audit Annual Assurance Report presented to RASC in June 2025. I737091 Risk Sponsors Group 2024/2025 31/03/2025 31/03/2025 Attendance at and participation in internal working groups. Job Number Assignment name Draft Issue Final Issue Assurance Info External Clients I910236 South Lanarkshire Leisure and Culture (SLLC) Admin 31/03/2025 31/03/2025 Reported to SLLC. I914245 SLLC Informal Follow Up 31/03/2025 31/03/2025 Reported to SLLC. I916246 SLLC Fraud Alerts 31/03/2025 31/03/2025 Reported to SLLC. I921248 Lanarkshire Valuation Joint Board (LVJB) 2025/2026 Audit Plan 03/03/2025 03/03/2025 Reported to LVJB. I921249 LVJB Admin 2024/2025 31/03/2025 31/03/2025 Reported to LVJB. I926252 LVJB Fraud Alerts 2024/2025 31/03/2025 31/03/2025 Reported to LVJB. I936254 SEEMIS Admin 31/03/2025 31/03/2025 Reported to SEEMIS. I941260 Integration Joint Board (IJB) 2025/2026 Audit Plan 05/03/2025 05/03/2025 Reported to IJB. I946258 IJB Admin 31/03/2025 31/03/2025 Reported to IJB. 15
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Key audit performance indicators Appendix 2 Indicator Numbers Percentage Target Comment Assignments delivered within budget 28/28 100% 80% Draft reports delivered within 6 weeks of file review 28/28 100% 80% 2024/2025 Audit Plan completed to draft by 30 April 2025 51/54 94% 100% As at 11 April 2025. Internal Audit recommendations delivered on time 8/8 100% 90% Client to agree findings and actions within 4 weeks of draft issue 28/28 100% 80% 16
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Appendix 3 ANNUAL REPORT FROM THE CHAIR – 2024 “WORKING TOGETHER TO SUPPORT THE KEY ROLE OF INTERNAL AUDIT” 1. INTRODUCTION 1.1 Membership of the CIPFA Scottish Local Authorities Chief Internal Auditors’ Group (SLACIAG) is open to the chief internal auditor from each Scottish local authority and the Strathclyde Partnership for Transport (SPT). SLACIAG is a Special Interest Group of CIPFA in Scotland, with operational arrangements, vision, and objectives set out in a formal Constitution. 1.2 SLACIAG’s Vision is to be the voice of internal audit across Scottish local authorities and a driving force for best practice in respect of local authority and public transport bodies internal audit, governance, and operations. 1.3 In support of that Vision, SLACIAG has the following objectives: • Secure a quality and responsive service for members of the group. • Develop the influence of the group with key decision makers and institutions in Scotland, as the key representative body for internal audit in local government with a particular emphasis on governance, risk, control and assurance matters. • Strengthen links and build long term relationships across the internal audit community within the public service. • Provide an effective group for the discussion of issues of common concern, sharing of good practice and commissioner of work to develop advanced practice. • Consider the development and training needs of our people as a collective to ensure that the best available products are procured at the best price. • Uphold the group’s key values, including: respect; openness and honesty; adding value; professional team working; sharing best practice; integrity; continuous improvement. 1.4 The purpose of this annual report to key stakeholders is to provide an update on SLACIAG’s activities and achievements over the course of 2024 and to recognise actions required to achieve its Vision. 1.5 SLACIAG has two long-established sub-groups whose activity is reflected in this report: • the Computer Audit Sub-Group (CASG); and • the Scottish Local Authorities Investigators’ Group (SLAIG). 1.6 Further sub-groups were established by SLACIAG in 2023 to lead on development actions arising from the SLACIAG Conference held in June 2023 within specific themes, including risk, data analytics, resourcing, and sustainability/climate change. Their activity in 2024 is also reflected in this report. 17
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2. MANAGEMENT COMMITTEE 2.1 I, Jill Stacey, Scottish Borders Council, was appointed as Chair of SLACIAG at the AGM in March 2024, continuing as Chair following a 2-year term during 2022-2023 to facilitate succession planning within the Management Committee. I previously served as Chair of SLACIAG during 2014-2015. In accordance with SLACIAG’s Constitution, my term of office will expire after serving 2 years at the SLACIAG AGM in March 2026. The Chair of SLACIAG joins the meetings of the CIPFA Scotland Branch Executive Committee, as SLACIAG is a special interest group of CIPFA in Scotland. 2.2 Yvonne Douglas, South Lanarkshire Council, was re-elected as Treasurer of SLACIAG at the AGM March 2024 having initially been appointed to the role in June 2020. Yvonne provided regular updates on the financial position of SLACIAG to enable the Management Committee to plan activity. 2.3 The appointments to the SLACIAG Management Committee were approved at the AGM March 2024. New members were welcomed to the Management Committee, including each sub-group Lead to ensure all sub-groups were represented. The Chairs of both CASG and SLAIG participate in the Management Committee meetings to derive benefits from their sectoral expertise and to ensure synergy when forward planning the regular meetings. 2.4 The same membership has continued during 2024, as follows: SLACIAG MANAGEMENT COMMITTEE 2024 Jill Stacey Scottish Borders Council Chair SLACIAG Yvonne Douglas South Lanarkshire Council Treasurer SLACIAG Pamela Redpath Fife Council Member; Lead for EQA and Risk Sub-Groups Gillian McConnachie East Dunbartonshire Council Member Duncan Stainbank East Lothian Council Member; Lead for Sustainability/ Climate Change Sub-Group Duncan Black Glasgow City and Shetland Islands Councils Member; Lead for Data Analytics Sub-Group Gordon O’Connor Stirling Council Member; EQA Moderation Panel Jamie Dale Aberdeenshire and Aberdeen City Councils Member Laura Calder City of Edinburgh Council Member; Lead for Resourcing Sub-Group Paul Brown East Dunbartonshire Council Chair CASG Barry Moncur East Dunbartonshire Council Chair SLAIG 2.5 There were Management Committee virtual meetings held in April, May, August and October 2024. The purpose of these meetings was to forward plan SLACIAG and Sub-Group meetings, considering topics, setting dates and arranging speakers. 18
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2.6 The Management Committee also oversees the External Quality Assessment (EQA) process, which is a peer review process established by SLACIAG to enable external validation of compliance with the Public Sector Internal Audit Standards (PSIAS). The Management Committee monitors progress with completion against a recommended programme of reviews each year to ensure that all participating organisations comply with the requirement to undertake an EQA once every 5 years. 19
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3. SCOTTISH LOCAL AUTHORITIES’ CHIEF INTERNAL AUDITORS GROUP (SLACIAG) SLACIAG Meetings 2024 3.1 There were four SLACIAG virtual meetings in 2024 with topics/speakers set out in the table below in addition to core business. The network continues to be strongly supported by members with a focus on significant and current issues. Date Topics / Speakers 15 March 2024 AGM • SLACIAG Annual Report 2023 (Chair) • SLACIAG Constitution (Chair) • SLACIAG Annual Accounts 2023 (Treasurer) • SLACIAG Subscriptions • Election of Officers Bearers CIPFA Technical Update • Naomi Whitmore, Public Finance Technical Adviser, CIPFA Assurance arrangements on Housing Benefit Subsidy Claims in Scotland • John Cornett, Audit Scotland Fraud Benchmarking in Scotland - SLAIG • Barry Moncur, East Dunbartonshire Council, Chair of SLAIG, and Carol Cleland, Renfrewshire Council 07 June 2024 Director of Finance perspective on Financial Sustainability and the role of Internal Audit • Jamie Robertson, Executive Officer for Finance & Digital Services, East Dunbartonshire Council (Chair of CIPFA Directors of Finance forum) 20 September 2024 Strategic Workforce Risks – Best Value area of focus Workforce Innovation • John Cornett and Blyth Deans, Audit Scotland Financial Sustainability indicators within LGBF • Website demo by Emily Lynch, Improvement Service New Global Internal Audit Standards • Andrew Paterson, EQA Sub-Group and Orkney Islands Council on behalf of Pamela Redpath, EQA Sub-Group Lead and Fife Council 20
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Date Topics / Speakers 6 December 2024 Strategic Workforce Risks – ‘Building a Sustainable Scottish Local Government Workforce for the Future’ and overview of the Improvement Service “Local Government Workforce Report 2024” • Amanda Spark, Improvement Service New CIIA Global Internal Audit Standards (GIAS), IASAB Application Note for GIAS in UK Public Sector, and CIPFA Code of Practice for Governance of Internal Audit in Local Government • Jill Stacey, SLACIAG Chair and Scottish Borders Council, and Pamela Redpath, EQA Sub-Group Lead and Fife Council 3.2 The Treasurer produced the 2023 annual accounts, which were considered in draft by the Group at the AGM in March 2024. Thanks to those at South Ayrshire Council for completing the independent audit of the 2023 Accounts. Thanks to Yvonne for her professionalism in fulfilling the Treasurer role and providing regular updates during 2024 on the financial position of SLACIAG which is important to ensure the Group remains financially sustainable. 3.3 A report on behalf of the Management Committee was issued to members containing an analysis of the benefits of SLACIAG membership, benchmarking with some other professional bodies’ subscription fees, and a proposal on subscriptions for 2025 which was approved. External Quality Assessment (EQA) 3.4 There continued to be challenges for the completion of the EQA2 schedule including staff resourcing issues in Councils, knock-on effect of delays during the pandemic response and recovery periods, and conflicts of interest arising from increased Internal Audit shared services arrangements. Responsibility is on the reviewee Council CAE to meet EQA requirements and to keep their Audit Committee informed of any delays in meeting the 5-year timeframe. 3.5 The EQA Sub-Group members set out below have been active in 2024 to oversee the completion of the EQA2 schedule and to plan the EQA3 schedule. The draft schedule of EQA3 peer reviews (involves 29 Councils with 21 CAEs due to shared services arrangements) was approved. The vacancy on the Moderation Panel is not deemed to be a significant resourcing issue currently. EQA Sub-Group Moderation Panel Pamela Redpath Fife Council Paul MacAskill Argyll & Bute Council Andrew Paterson Orkney Islands Council Gordon O’Connor Stirling Council Cecilia McGhee South Ayrshire Council vacancy 3.6 The new Global Internal Audit Standards in the UK Public Sector (GIAS), which incorporate the CIIA Global Internal Audit Standards, IASAB Application Note for the UK Public Sector, and CIPFA Code of Practice for the Governance of Internal Audit in Local Government, will have implications 21
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for the SLACIAG EQA3 Peer Review Process and Templates. These will be updated by the EQA Sub-Group. Sub-Groups 3.7 At each of the quarterly SLACIAG meetings during 2024 updates were received from the Sub-Groups in accordance with their respective terms of reference to derive significant benefits from them. 3.8 The Data Analytics Group has had four virtual workshops during 2024 coordinated by GCC team. There has been good participation as an opportunity to share practices, insights, data set examples, data analytics strategies, etc. to improve our Digital Skills within our Internal Audit teams and beyond. 3.9 The Resourcing Group met virtually three times in 2024 to discuss all matters on resourcing our teams including recruitment, succession planning, training, soft skills, ways of working, and mentoring. 3.10 The Sustainability / Climate Change Group shared the Internal Audit Programme on Climate Change Strategy that it had developed, linked to new statutory guidance that is being developed by Sustainable Scotland Network in collaboration with SLACIAG and Audit Scotland on the Role of Audit. 3.11 The Risk Group expanded its small membership to share practice within its approved Terms of Reference and to progress risk benchmarking through use of risk management maturity models. SLACIAG Knowledge Hub 3.12 All Agendas, Minutes, and Presentations of SLACIAG meetings, Conference, EQA Framework Guidance, and other relevant documents are uploaded to the SLACIAG Knowledge Hub to enable access by all members in a secure way. New Members have been registered on the SLACIAG Knowledge Hub, including new starts from within audit teams of Councils, thus enabling greater participation. 4. COMPUTER AUDIT SUB-GROUP 4.1 The main aim of the Computer Audit Sub-Group (CASG), which is a permanent sub-group of SLACIAG, is to provide a forum to share and discuss computer audit practices and developments. This includes raising awareness of new standards, updates to legislation, new and current topics of interest, and computer audit developments, resources, and techniques. 4.2 The Computer Audit Sub-Group (CASG) met two times in 2024, all meetings were virtual, with topics/speakers as follows in addition to core business: Date Topics / Speakers 29 May 2024 Cyber Threats and the Role of a Security Operation Centre (SOC) - A presentation of the current threats that organisations are facing and the importance of having a SOC in mitigating the effects of such attacks. • Paul Cullimore, Quorum Cyber Business Continuity Audit – A summary of issues noted as part of a 22
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recently completed audit. • Yvonne Trundle, North Ayrshire Council 09 October 2024 Power BI – A presentation and walkthrough of examples of the uses of Power BI in a Local Authority. • Hunter Dallas, South Lanarkshire Council Ransomware Attack, Western Isles Council – Presentation to provide an overview of the attack that occurred in 2023, and any lessons learned. • Malcolm Nicol, Western Isles Council 4.3 This year has seen a change in the constitution of the Group, with a new Chair and Secretary taking up their roles in the second half of the year, to ensure the sustainability of the sub- group. The participation in the group remains good. 4.4 Within the SLACIAG Annual Report 2023 reference was made to expanding the role and outputs of CASG to cover, for example, Digital Transformation, Artificial Intelligence (AI), and IT/Cyber Security, in addition to core Computer Audit work. This is still under consideration and would involve a change to the Terms of Reference of the Group. In the first instance, 3 topics were suggested: · Shared Learning from the Western Isles Council from a ransomware attack · Cyber Security Maturity Assessment – tools and role of Internal Audit · Contracts via the Local Authority IT Security Group 4.5 The first topic has been covered with an informative presentation given to the group by the Western Isles Council in October 2024. The Group has had discussions with respect to the maturity assessment and further work is planned in 2025, as is increasing communication with the Local Authority IT Security Group. Furthermore, a presentation covering Artificial Intelligence is planned for April 2025. 4.6 Due to the changes in the constitution of the group some Agendas, Minutes, and Presentations for CASG meetings 2024 are still to be uploaded to the SLACIAG Knowledge Hub (CASG sub-folder) to enable access by all members in a secure way. This will be updated in the coming months as well as improving oversight of each Council’s ICT audit plans during 2025. 23
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5. SCOTTISH LOCAL AUTHORITY INVESTIGATORS GROUP (SLAIG) 5.1 The main aim of the Scottish Local Authority Investigators Group (SLAIG), which is a permanent sub-group of SLACIAG, is to provide a forum to share and discuss counter fraud practices and developments. This includes raising awareness of updates to legislation, new and current topics of interest, and developments in counter fraud activities. 5.2 The Scottish Local Authority Investigators Group (SLAIG) met four times in 2024, all meetings bar one were virtual, with topics/speakers as follows in addition to core business: Date Topics / Speakers 20 March 2024 Presentation on Scotland Excel information sharing, artificial intelligence, and cyber security issues. Shared training opportunities discussed and progressed. • Danielle Pettigrew, Governance and Performance Manager, Scotland Excel 20 June 2024 Presentation on the 2022/23 National Fraud Initiative, the forthcoming 2024/25 exercise, in particular data quality issues and how LA’s could increase outcomes. • Tim Bridle, Audit Scotland 18 September 2024 Presentation and overview of the Investigatory Powers Act, and outline of the services, particular to the Act, that NAFN could provide. • Paul Choudry, National Anti-Fraud Network (NAFN) Case Study - Sharing lessons learned from a case study relating to the evasion of Council Tax with the provision of fictitious details. • Bobbi Irvine, West Lothian Council 11 December 2024 Presentation on the services available to local authorities from Transunion with regards credit reference data. • Lydia Johnson and Greg Flewitt, Transunion Case Study - Sharing lessons learned from a case study relating to a recent embezzlement case which resulted in a successful prosecution. Control weaknesses and red flags were discussed and good practice shared. • Matthew Dickson, Aberdeen City Council 5.3 One specific task assigned to SLAIG was the Benchmarking on fraud activity and resources to align with the vison and objectives of SLACIAG and SLAIG’s Terms of Reference. The proposal was agreed in March 2024 that all local authorities will participate in a benchmarking exercise. The core content of the exercise will include resources, training, and outcomes. 24
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5.4 One of the SLACIAG Management Committee members is assigned as Senior Sponsor of SLAIG to provide direction re Group’s meetings and agendas. 5.5 All Agendas, Minutes, and Presentations of SLAIG meetings, and other relevant documents are uploaded to the SLAIG Knowledge Hub to enable access by all members in a secure way. 25
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6. CONCLUSION 6.1 Notwithstanding the challenges that continue to affect our organisations, SLACIAG and its Sub-Groups have had another successful year, as evidenced by the participation in our virtual meetings and the range of topics discussed. 6.2 During the year Chief Audit Executives considered significant matters facing our organisations such as Financial Sustainability Risks and Strategic Workforce Risks, engaged in the consultation of new Global Internal Audit Standards and assessed their impact on the provision of assurance and advisory services, and discussed other key issues and shared approaches being taken to address these. In line with their remits, the CASG and SLAIG Sub- Groups respectively focussed on computer audit and counter fraud matters that are affecting our organisations and our functions/individuals. The Data Analytics, Resourcing, Sustainability/Climate Change and Risk Sub-Groups are excelling in their exploration of specific matters. I give thanks to those who volunteer their time to achieve this. 6.3 I would like to thank the Management Committee and the Leads of our Sub-Groups for their work in organising meetings and responding to the challenges that have arisen. I would also like to thank our speakers for giving up their time to join us at our virtual meetings during 2024 and assist us in enhancing our effectiveness as providers of assurance and compliance services. 6.4 My thanks are also extended to our members for their support, as evidenced by engaging in our virtual meetings during 2024, but also by the generous advice and assistance provided in relation to the myriad of audit, risk and governance questions which have arisen within our membership during the year. SLACIAG relies on the dedicated and hard-working public sector professionals within its membership and look forward to our biennial 2-day in-person Conference on 5 and 6 June 2025. Jill Stacey Chief Officer Audit & Risk, Scottish Borders Council Chair of SLACIAG 14 March 2025 26
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 6 May 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Audit Scotland – Financial Bulletin 2023/2024 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] provide a summary of the information contained within the Audit Scotland Financial Bulletin 2023/2024, published in January 2025 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that the key messages and recommendations of the Audit Scotland Financial Bulletin 2023/2024 (detailed in Sections 4 and 5), be noted; and (2) that the commentary on the Council’s position as included in the Audit Scotland report (Section 6), be noted. [1rec 3. Background 3.1. In January 2025, Audit Scotland published the Financial Bulletin 2023/2024 report on behalf of the Accounts Commission. Audit Scotland will publish a budget briefing examining the 2025/2026 budgets set by councils, including analysis of anticipated budget gaps and the decisions made by councils when setting their budgets in spring 2025. This will be followed by a report focused on service performance later in 2025. 3.2. The subject of this paper is the Local government in Scotland: Financial bulletin 2023/24 | Audit Scotland report which can be found on the Audit Scotland website. The report is divided into 3 parts:- Part 1: Council Funding and Budgets Part 2: Financial Performance Part 3: Financial Position and Outlook 3.3. The key messages from each of the 3 parts are outlined in Sections 4 and 5 of this report. Section 6 notes commentary on the Council’s data included in the Audit Scotland report. 4. Part 1 – Council Funding and Budgets 4.1. A number of key messages are presented by Audit Scotland in their report in relation to 2023/2024 Council funding and budgets. Comments in relation to the Council’s position on these are included in italics alongside the Audit Scotland key messages: Funding and Budgets a. Councils are reliant on Scottish Government funding which makes up over 60 per cent of income. 4 27
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Government Grant made up 75% of the Council’s Revenue funding for 2023/2024. b. Revenue funding from the Scottish Government fell by 1.8 per cent in real terms in 2023/2024, despite significant in-year allocations. c. In 2023/2024, ring-fenced and directed funding amounted to almost £2.7 billion, which is 21 per cent of Scottish Government revenue funding to councils. This is lower than in 2022/2023. The Council’s Specific Grant grants amounted to 6.5% of the overall Government Grant in 2023/2024, however, that did not take account of monies earmarked for specific policy intent. d. Councils identified £759 million of budget gaps at the start of 2023/2024 and planned to use savings and reserves to address these. The 2024/2025 budget gap identified by all 32 councils was £585 million. The Council previously declared a Budget Gap of £77 million across the period 2025/2026 to 2027/2028. e. With Scottish Government capital funding remaining constrained, councils are increasingly reliant upon borrowing to fund planned investment decisions. Borrowing is only used within the Council when permission is given. For financial year 2023/2024, Members approved additional borrowing of £13 million for the Transformation Fund. f. Capital funding from the Scottish Government (at the spring revision) fell by 1.2 per cent in real terms between 2022/2023 and 2023/2024 and was 21 per cent lower than 2018/19. On a like for like basis, the Council’s core General Capital Grant fell into 2023/2024 by £0.155 million. 5. Part 2 – Financial Performance 5.1. A number of key messages are presented by Audit Scotland in their report in relation to financial performance, namely: a. Councils’ total revenue funding and income fell by 3.3 per cent in real terms in 2023/2024, with income from service fees still below pre-pandemic levels. It is not possible to provide the Council’s total revenue funding and income movement in real terms. The base grant position for 2023/2024 was a cash increase of £19.098 million with a like for like increase in grant of £4.641 million. b. Overall, councils remained within their agreed revenue budgets, but some services spent more than planned. 9 out of 29 councils reported overspends against their agreed revenue budgets. The Council presented an underspend position at the end of 2023/2024. c. Councils delivered significant savings, but some remain reliant on one-off measures and reporting against savings targets should be more transparent. 11 out of 30 councils achieved all their planned savings. 28
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The Council achieved 97% (£4.985 million) of its £5.115 million of savings for financial year 2023/2024 with the remainder being pursued into 2024/2025. d. Capital expenditure was 20 per cent lower than planned and funded by increased borrowing. 25 out of 30 councils reported lower expenditure than planned across their capital programmes in 2023/2024. The Council’s Capital General Fund Programme reported an underspend of £14.121 million compared to the £78.635 million budget (18% lower). The Housing Capital Programme reported an underspend of £5.203 million compared to the £67.443 million budget (8% lower). e. Managing their capital programmes is an important tool for councils to control their annual expenditure. All but two councils reported having a multi-year capital plan in place. These covered a range of periods from five to 30 years, with most covering five to ten years. South Lanarkshire council has a capital strategy in place, which initially covered a 10-year period and approves its annual capital programmes in- line with this, and Stirling council reported only having an annual capital plan in place. A multi-year plan allows councils to manage their capital spending over this period. As noted by Audit Scotland, the Council has a long-term capital investment strategy which will be refreshed during 2025/2026. Alongside that, it sets a new capital budget each year in line with annual Government Grant allocations. f. Borrowing means debt has again increased, and further borrowing will be needed to invest in new schools. The Council has a first-class schools estate as a result of its significant investment in schools over the period since 2004, covering its early years, primary and secondary estate. g. £19.8 billion was the councils’ net debt in 2023/2024, a 15.8 per cent increase on 2022/2023, as councils become more reliant on borrowing to finance their capital programmes. The Council’s debt position at the end of 2023/2024 was £1,008 million. 5.2. Part 3 – Financial Position and Outlook A number of key messages are presented by Audit Scotland in their report in relation to financial position and outlook, namely: h. Councils’ usable reserves remain higher than before the pandemic, mainly due to the use of financial flexibilities, but decreased in 2023/24. In 2023/24, councils’ total usable reserves decreased by five per cent to £4.1 billion which equates to around 25 per cent of net cost of services. The Council has a reserves policy (presented to Finance and Corporate Resources Committee on 30 October 2024) which details the approach to managing its reserves taking cognisance of strategic, operational and financial risks facing the authority at a local level. Total useable reserves at the end of financial year 2023/2024 were £133.689 million of which £120.646 million (90%) were committed for specific purposes. 29
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i. General Fund reserves increased slightly but over 80 per cent are committed for specific purposes. All Transfers to Reserves are approved by Elected Members. These monies are set aside for contract commitments or to carry forward grant received for a specific purpose. The total approved transfers to reserves in 2023/2024 was £26.351 million. j. Some councils’ levels of uncommitted reserves are low, but they have specific reserves earmarked for contingency. The Council’s Unearmarked General Fund, the Reserve held for unforeseen events, and which has no specific commitments, remains at £13.043 million. Against an expenditure budget of £955 million for 2024/2025, this represents a 1.4% reserve. k. Councils continue to use their reserves to manage budget pressures, but this is not sustainable. 12 out of 29 councils made unplanned use of their reserves in 2023/24 to manage budget pressures. Any use of reserves to balance the budget is done in a considered way, with Elected Members being informed of the repercussions into the next financial year – reserves can only be used once. l. Councils could improve how clearly they report on how they intend to use their reserves. As noted above, Elected Members are sighted and indeed approve any use of Reserves as part of the Budget Setting process (Reserves policy presented to Finance and Corporate Resources Committee on 30 October 2024). m. Councils have medium-term financial plans in place but must now make progress on transformation and reform. 15 out of 30 councils have long-term financial plans in place, with councils reporting difficulty planning for the longer term due to future uncertainty. The Council will present a refreshed long-term financial plan to the Executive Committee in June 2025. This will be based on a range of assumptions. 6. South Lanarkshire Council – Financial Overview 2023/2024 6.1. The Audit Scotland report contains a number of tables that set out information for all councils, however, there are 2 tables of data which show the performance of individual councils. Commentary on the Council’s position in each of these tables is provided below. 6.2. The bridging actions councils identified within their 2023/2024 budgets as a proportion of net cost of services ranged between 1% and 9% with the Council being second highest behind Moray. These 6 bridging actions relate to increase to council tax, agreed savings recurring, agreed savings non-recurring, use of reserves, financial flexibilities and other. Bridging actions making up just over 8% of the net cost of services, of which over 5.5% was use of reserves. Recurring savings and using reserves made up the majority of how councils intended to meet their identified budget gaps. The Council is ranked high due to the planned use of reserves from the Loans Fund Review managed as part of its budget strategy. 30
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6.3. The proportion of savings targets achieved in 2023/2024, split by recurring and non-recurring savings (based on 27 councils that can split their savings in this way) shows the Council rank 7th and has achieved 97% of their recurring savings for 2023/24. 7. Employee Implications 7.1. None. 8. Financial Implications 8.1. The Audit Scotland Report raises a number of financial areas for consideration by councils, however, there are no direct financial implications as a result of the content of this report. 9. Climate Change, Sustainability and Environmental Implications 9.1. There are no implications for climate change, sustainability or the environment in terms of the information contained in this report. 10. Other Implications 10.1. None. 11. Integrated Impact Assessment and Consultation Requirements 11.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and therefore no impact assessment is required. 11.2. There is also no requirement to undertake any consultation in terms of the information contained in the report. Jackie Taylor Executive Director (Finance and Corporate Resources) 8 April 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References None List of Background Papers Local Government in Scotland – Financial Overview 2023/2024. Audit Scotland, January 2025. Contact for Further Information If you would like to inspect the background papers or want further information, please contact: Jackie Taylor, Executive Director of Finance and Corporate Resources Ext: 5637 (Tel: 01698 455637) E-mail : jackie.taylor@southlanarkshire.gov.uk 31
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 6 May 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Financial Resources Scrutiny Forum Activity 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] provide a summary of reports considered by the Financial Resources Scrutiny Forum from August 2024 to March 2025, for information 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that the summary of reports considered by the Financial Resources Scrutiny Forum for the period August 2024 to March 2025, as detailed in Appendix 1 of this report, be noted. [1rec 3. Background 3.1. In May 2017, the Council agreed details relating to the review of Member Scrutiny Forums. This included consideration of the Terms of Reference and Powers and Responsibilities for the Forums. In respect of the Financial Resources Scrutiny Forum, the focus can be summarised as:- scrutinise all of the Council’s revenue budgets review the financial and operational progress of the Council’s capital programmes review the financial and operational progress of the Council’s trading operations 3.2. This report will cover items submitted to the Financial Resources Scrutiny Forum since the last update to the Committee in June 2024. 4. Agenda Items 4.1. The table attached at Appendix 1 notes the reports submitted to the Financial Resources Scrutiny Forum during the period August 2024 to March 2025, under the main areas of responsibility. The meeting on 15 August 2024 was the first of the new financial year, 2024/2025 and also covered the closing position of the old year (2023/2024). 4.2. Further reports will be provided to this Committee on an annual basis advising of the business presented to the Financial Resources Scrutiny Forum. 5. Employee Implications 5.1. There are no employee implications. 5 33
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6. Financial Implications 6.1. There are no financial implications. 7. Other Implications 7.1. The main risk associated with the Council’s Revenue Budget is that there is an overspend. The risk has been assessed as low given the detailed budget management applied across the Resources. The risk is managed through four weekly Budget Monitoring Meetings at which any variance is analysed. In addition, the probable outturn exercise ensures early warning for corrective action to be taken where appropriate. 7.2. The main risk associated with the Council’s Capital Programme is that there is an overspend. The risk has been assessed as low given the detailed project management plans prepared and monitored for each project. The risk of an overspend is managed through four weekly Investment Management Meetings. 7.3. There are no implications for sustainability in terms of the information contained in this report. 8. integrated Impact Assessment and Consultation Requirements 8.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 8.2. There is also no requirement to undertake any consultation in terms of the information contained in the report. Jackie Taylor Executive Director (Finance and Corporate Resources) 3 April 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References Risk and Audit Scrutiny Committee, 24 June 2024 List of Background Papers None Contact for Further Information If you would like to inspect the background papers or want further information, please contact: Lorraine O’Hagan, Head of Finance (Strategy) Ext: 5637 (Tel: 01698 455637) lorraine.o’hagan@southlanarkshire.gov.uk 34
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Reports Submitted to Financial Resources Scrutiny Forum Appendix 1 Date Revenue Monitoring Capital Monitoring 15 August 2024 Provide an update on the position as at 31 March 2024: • Revenue Budget Monitoring 2023/2024 • Revenue Budget Monitoring 2023/2024 - Detailed Resource Analysis Provide an update on the position as at 14 June 2024 (period 03) for the following: • 2024/2025 Financial Monitoring • 2024/2025 Detailed Resource Analysis for the General Services Budget and Housing Revenue Account Provide an update on the position as at 31 March 2024: • 2023/2024 General Fund Capital – Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects • 2023/2024 Housing Capital Programme – Financial Information and Physical Progress Provide an update on the position as at 14 June 2024 (period 03) for the following: • 2024/2025 Housing Capital Programme - Financial Information and Physical Progress • 2024/2025 General Services Capital Programme - Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects 12 September 2024 Provide an update on the position as at 12 July 2024 (period 04) for the following: • 2024/2025 Financial Monitoring • 2024/2025 Detailed Resource Analysis for the General Services Budget and Housing Revenue Account Provide an update on the position as at 12 July 2024 (period 04) for the following: • 2024/2025 Housing Capital Programme - Financial Information and Physical Progress • 2024/2025 General Services Capital Programme - Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects 10 October 2024 Provide an update on the position as at 09 August 2024 (period 05) for the following: • 2024/2025 Financial Monitoring • 2024/2025 Detailed Resource Analysis for the General Services Budget and Housing Revenue Account Provide an update on the position as at 09 August 2024 (period 05) for the following: • 2024/2025 Housing Capital Programme - Financial Information and Physical Progress • 2024/2025 General Services Capital Programme - Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects 21 November 2024 Provide an update on the position as at 04 October 2024 (period 07) for the following: • 2024/2025 Financial Monitoring • 2024/2025 Detailed Resource Analysis for the General Services Budget and Housing Revenue Account Provide an update on the position as at 04 October 2024 (period 07) for the following: • 2024/2025 Housing Capital Programme - Financial Information and Physical Progress • 2024/2025 General Services Capital Programme - Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects 35
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Date Revenue Monitoring Capital Monitoring 19 December 2024 Provide an update on the position as at 01 November 2024 (period 08) for the following: • 2024/2025 Financial Monitoring • 2024/2025 Detailed Resource Analysis for the General Services Budget and Housing Revenue Account Provide an update on the position as at 01 November 2024 (period 08) for the following: • 2024/2025 Housing Capital Programme - Financial Information and Physical Progress • 2024/2025 General Services Capital Programme - Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects 20 February 2025 Provide an update on the position as at 30 December 2024 (period 10) for the following: • 2024/2025 Financial Monitoring • 2024/2025 Detailed Resource Analysis for the General Services Budget and Housing Revenue Account Provide an update on the position as at 30 December 2024 (period 10) for the following: • 2024/2025 Housing Capital Programme - Financial Information and Physical Progress • 2024/2025 General Services Capital Programme - Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects 20 March 2025 Provide an update on the position as at 24 January 2025 (period 11) for the following: • 2024/2025 Financial Monitoring • 2024/2025 Detailed Resource Analysis for the General Services Budget and Housing Revenue Account Provide an update on the position as at 24 January 2025 (period 11) for the following: • 2024/2025 Housing Capital Programme - Financial Information and Physical Progress • 2024/2025 General Services Capital Programme - Financial Information, Programme exceptions approved by Executive Committee and Physical Progress for Build, Non-Build and Roads Projects 36
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 6 May 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Forward Programme for Future Meetings 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] advise members of the forward programme for the meetings of the Risk and Audit Scrutiny Committee to 26 May 2026 invite members to suggest topics for inclusion in the Committee’s forward programme [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [recs] (1) that the report and the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 26 May 2026, attached as an Appendix to the report, be noted. [1recs] 3. Background 3.1. As part of a range of improvement measures introduced as a result of Audit Scotland’s report on the Audit of Best Value and Community Planning (2009), an Action Plan was prepared. One of the actions was to include, as a standard agenda item, a list of items proposed for consideration at subsequent meetings of this Committee to provide an opportunity for members to inform future agendas. The outline forward programme to 26 May 2026 is attached, for members’ information, as an Appendix to the report. 4. Employee Implications 4.1. There are no employee implications. 5. Financial Implications 5.1. There are no financial implications. 6. Climate Change, Sustainability and Environmental Implications 6.1. There are no Climate Change, Sustainability or Environmental implications in terms of the information contained within this report. 7. Other Implications 7.1. There are no risk implications in terms of the information contained within this report. 6 37
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8. Integrated Impact Assessment and Consultation Requirements 8.1. The report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 8.2. There was no requirement to undertake any consultation in terms of the information contained in this report. Jackie Taylor Executive Director (Finance and Corporate Resources) 11 April 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References Executive Committee 8 July 2009 List of Background Papers Audit Scotland Audit of Best Value and Community Planning Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Elizabeth-Anne McGonigle, Administration Adviser Tel: 0738 5403101 E-mail:- elizabeth-anne.mcgonigle@southlanarkshire.gov.uk 38
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APPENDIX – RASC OUTLINE FORWARD PROGRAMME Meeting Date Item Responsibility 25 June 2025 Internal Audit Assurance Report 2024/2025 Audit and Compliance Manager Annual Governance Statement for 2024/2025 and Significant Governance Areas Quarter 4 Progress Report Head of Administration and Legal Services Unaudited Annual Accounts 2024/2025 Head of Finance (Strategy) Internal Audit Activity Report Audit and Compliance Manager 2024 NFI Exercise Audit and Compliance Manager Fraud Statistics Annual Report 2024/2025 Audit and Compliance Manager 30 September 2025 External Auditor’s Annual Report to South Lanarkshire Council 2024/2025 External Audit Audited Annual Accounts 2024/2025 Head of Finance (Strategy) Audit Scotland: Best Value Thematic Report External Audit Internal Audit Activity Report Audit and Compliance Manager Year End Insured Risks Report 2024/2025 Head of Finance (Transactions) Year End Risk Management Report 2024/2025 and Review of Council’s Top Risks 2025/2026 Head of Finance (Transactions) 9 December 2025 Internal Audit Activity Report Audit and Compliance Manager Audit Scotland Report: Local Government in Scotland Overview 2024 Head of Communications and Strategy Performance and Review Scrutiny Forum Annual Update Head of Communications and Strategy 39
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Good Governance Update Head of Administration and Legal Services 2025/2026 Six Monthly Fraud Report Audit and Compliance Manager Global Internal Audit Standards - Update Audit and Compliance Manager 10 March 2026 Internal Audit Activity Report Audit and Compliance Manager 2026/2027 Internal Audit Plan Audit and Compliance Manager Fraud Statistics Six Monthly Update 2025/2026 Audit and Compliance Manager Annual Audit Plan External Audit 26 May 2026 Internal Audit Activity Report Audit and Compliance Manager 2025 NFI Exercise Audit and Compliance Manager Audit Scotland – Financial Bulletin 2024/2025 Head of Finance (Strategy) Financial Resources Scrutiny Forum Activity Head of Finance (Strategy) N.B:- Audit Scotland national studies and reviews will appear as a recurring item but the frequency and subject matter will vary according to their programme. 40