Agenda Document Pack - Audit and Scrutiny Committee - 07/05/2025
Moray Council · 7 May 2025
Back to Audit and Scrutiny Committee — 7 May 2025 and its agenda
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Audit and Scrutiny Committee Wednesday, 07 May 2025 NOTICE IS HEREBY GIVEN that a Meeting of the Audit and Scrutiny Committee is to be held at Council Chambers, Council Office, High Street, Elgin, IV30 1BX on Wednesday, 07 May 2025 at 09:30. BUSINESS 1. Sederunt 2. Declaration of Group Decisions and Members Interests * 3. Minute of meeting of 12 February 2025 5 - 12 4. Written Questions ** 5. Internal Audit Section Update Report Report by Audit and Risk Manager 13 - 60 6. Internal Audit Review - Special Investigation - Building Services - Windows Replacement Programme Report by Audit and Risk Manager 61 - 80 7. The National Fraud Initiative in Scotland Report by Audit and Risk Manager 81 - 90 8. Annual Audit Plan for the Year Ending 31 March 2025 Report by Depute Chief Executive (Economy, Environment and Finance) 91 - 188 9. Local Government Benchmarking Framework 2023-24 Results Report by Depute Chief Executive (Education, Communities and Organisational Development) 189 - 212 Page 1
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Summary of Audit and Scrutiny Committee functions: Audit Functions - Consider reports from the Council's internal auditor & Audit Scotland concerning Council Functions. Scrutiny Functions - Scrutinising the policies of the Council and their effectiveness in meeting the action plans of the Council as set out in the Corporate Development Plan and evaluating the actions of Committees in implementing the action plans set out in the Corporate Development Plan. Performance Monitoring - To receive reports on the performance of and trends within all of the Council’s services in terms of service standards and performance information. Standards - To ensure that the highest standards of probity and public accountability are demonstrated. Watching the Meeting You can watch the webcast live by going to: http://www.moray.gov.uk/moray_standard/page_43661.html Webcasts are available to view for 1 year following the meeting. You can also attend the meeting in person. If you wish to attend in person, please come to the High Street entrance door and a member of staff will let you into the Chamber. Page 2
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GUIDANCE NOTES * Declaration of Group Decisions and Members Interests - The Chair of the meeting shall seek declarations from any individual or political group at the beginning of a meeting whether any prior decision has been reached on how the individual or members of the group will vote on any item(s) of business on the Agenda, and if so on which item(s). A prior decision shall be one that the individual or the group deems to be mandatory on the individual or the group members such that the individual or the group members will be subject to sanctions should they not vote in accordance with the prior decision. Any such prior decisions will be recorded in the Minute of the meeting. ** Written Questions - Any Member can put one written question about any relevant and competent business within the specified remits not already on the agenda, to the Chair provided it is received by the Proper Officer or Committee Services by 12 noon two working days prior to the day of the meeting. A copy of any written answer provided by the Chair will be published on the Council’s committee management system by 4pm the day before the meeting. The Member who has put the question may, after the answer has been published, ask one supplementary question directly related to the subject matter at the meeting, but no discussion will be allowed. No supplementary question can be put or answered more than 10 minutes after the Council has started on the relevant item of business, except with the consent of the Chair. If a Member does not have the opportunity to put a supplementary question because no time remains, then he or she can submit it in writing to the Proper Officer who will arrange for a written answer to be provided within 7 working days. Page 3
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MORAY COUNCIL Audit and Scrutiny Committee SEDERUNT Councillor Scott Lawrence (Chair) Councillor Theresa Coull (Depute Chair) Councillor Peter Bloomfield (Member) Councillor Tracy Colyer (Member) Councillor John Divers (Member) Councillor Jérémie Fernandes (Member) Councillor Donald Gatt (Member) Councillor David Gordon (Member) Councillor Sandy Keith (Member) Councillor Marc Macrae (Member) Councillor Paul McBain (Member) Councillor Neil McLennan (Member) Councillor John Stuart (Member) Councillor Sonya Warren (Member) Mr Ivan Augustus (Non-Voting Member) Ms Margaret Wilson (Non-Voting Member) Clerk Name: Caroline O'Connor Clerk Telephone: 07779 999296 Clerk Email: committee.services@moray.gov.uk Page 4
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MORAY COUNCIL Minute of Meeting of the Audit and Scrutiny Committee Wednesday, 12 February 2025 Council Chambers, Council Office, High Street, Elgin, IV30 1BX PRESENT Mr Ivan Augustus, Councillor Peter Bloomfield, Councillor Tracy Colyer, Councillor Theresa Coull, Councillor John Divers, Councillor Jérémie Fernandes, Councillor Donald Gatt, Councillor David Gordon, Councillor Sandy Keith, Councillor Elaine Kirby, Councillor Scott Lawrence, Councillor Marc Macrae, Councillor Shona Morrison, Councillor John Stuart, Ms Margaret Wilson APOLOGIES Councillor Neil McLennan IN ATTENDANCE Interim Chief Executive; Depute Chief Executive (Education, Communities and Organisational Development); Depute Chief Executive (Economy, Environment and Finance); Audit and Risk Manager; Head of Governance, Strategy and Performance; Head of Financial Services; Head of Housing and Property Services; Housing Services Manager and Caroline O'Connor, Committee Services Officer, all Moray Council and Angela Pieri, Grant Thornton - External Auditors. 1. Chair Councillor Lawrence, as Chair of Audit and Scrutiny Committee, chaired the meeting. 2. Declaration of Group Decisions and Members Interests * In terms of Standing Orders 21 and 23 and the Councillors' Code of Conduct, there were no declarations from Group Leaders or Spokespersons in regard to any prior decisions taken on how Members will vote on any item on the agenda or any declarations of Member's interests in respect of any item on the agenda. With regard to Item 10 "Internal Audit Plan Year Ending 31 March 2026", Councillor Gatt stated, for transparency, that he is Convener of the Grampian Valuation Joint Board and would be taking part in the debate. Mr Augustus stated, for transparency, that he was carer representative on the Moray Integration Joint Board and would be taking part in the debate. 3. Resolution The Chair sought agreement from the Council in terms of Section 50A (4) and (5) of the Local Government (Scotland) Act 1973, as amended, the public and media representatives be excluded from the meeting for Item 11 of business on the ground that it involves the likely disclosure of exempt information of the class. Item 3. Page 5
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Councillor Keith sought to move Item 11 on the agenda into the open session of the agenda given the unusual level of public interest in how the Council arrived at its decision to enforce the collection of non-domestic rates liability and on the balance of harms, it was in the public interest to deal with the matter in public. This was seconded by Councillor Stuart. The Chair sought clarification from the Monitoring Officer on Item 11 on the agenda. In response, the Monitoring Officer confirmed that in terms of legislation it is for members to decide on where to discuss items on the agenda based on advice from Officers. He further added that the advice on Item 11 is that, as the report refers to the tolerances for rates enforcement which could prejudice the Council's ability to enforce for other properties, the report should be heard in the confidential section. This would allow for more candid discussion and following the meeting today, while the Chair would hold authority to grant publicity rights on the information contained in the report, there would still be sensitivity around some of the details to be publicly shared. The Chair confirmed he was in favour of the report being head in the confidential section to allow more robust discussion following the advice of the Monitoring Officer and was in agreement with providing a public statement following the meeting sharing as much information within the constraints highlighted. As an amendment Councillor Macrae moved the Resolution as there remained questions from the report which answers would not be forthcoming in a public session and would require to be the subject of further external investigation. In response, the Monitoring Officer confirmed the report was being held confidentiality due to it containing information relating to the financial of business affairs of any particular person(s) and whilst the issues raised by Councillor Macrae would be a knock-on effect, the primary reason for holding the report in the confidential session must be related to one of the paragraphs in the exemption information schedule in the Resolution. Following the advice from the Monitoring Officer, Councillor Macrae reworded his amendment to move the Resolution to discuss the report in the confidential section as should the report be discussed in public, it may prejudice any future potential external investigation. This was seconded by Councillor Gatt. On a division there voted:- For the Motion (5) Councillors Keith, Stuart, Divers, Fernandes, Morrison For the Amendment (8) Councillors Macrae, Gatt, Bloomfield, Colyer, Coull, Gordon, Kirby, Lawrence Abstentions (0) Accordingly the Amendment became the finding of the meeting and the Committee agreed to consider Item 11 in the confidential section of the agenda. The meeting resolved that in terms of Section 50A (4) and (5) of the Local Government (Scotland) Act 1973, as amended, the public and media Page 6
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representatives be excluded from the meeting for Item 11 of business on the grounds that it involves the likely disclosure of exemption information of the class. Para number of the minute Para Number of Schedule 7a 11 Para 6 Information relating to the financial or business affairs of any particular person(s) 4. Written Questions ** The Committee noted that no written questions had been submitted. 5. Minutes of meeting of 20 November 2024 The minutes of the Audit and Scrutiny Committee on 20 November 2024 had been submitted. The Chair advised Councillor McLennan had submitted a number of amendments relating to Paragraph 6 of the Minute "Internal Audit Section Update Report" which he was happy to accept if the Committee were minded to do so, namely:- 1. Para 6, seventh paragraph, third line - after "sought a seconder", add new sentence "The Chair said Councillor McLennan could seek a seconder or speak to him after the meeting." 2. Para 6, seventh paragraph, sixth line - after "added to the Audit Plan", add "The Audit and Risk Manager asked Councillor McLennan what was to be added. Councillor McLennan said the circumstances of circa £860k being paid out to be investigated to ensure it met Best Value and compliance through appropriate processes". 3. Para 6, seventh paragraph, tenth line - replace "thanked the Interim Chief Social Work Officer for the reassurance provided regarding the progress being made and confirmed he was happy to discuss scrutiny of the case with the Chair and Interim Chief Social Work Officer following the meeting." with "thanked the Interim Chief Social Work Officer for the correspondence provided regarding the progress being made and confirmed he was happy. to discuss scrutiny of the case offline." 4. Para 6, between seventh and eighth paragraphs - add two new paragraphs - "Cllr Gordon tabled a Point of Order, citing SO 29, but this was not pursued by the Chair." followed by "Ms Wilson then asked if any similar cases were in the pipeline. The Interim Chief Social Work Officer confirmed not that he was aware of. However there was one case that was bubbling away but no sign of that going through a court process any time soon." Subject to the above amendments, the Committee unanimously agreed the minute of the meeting. 6. Internal Audit Section Update Report The meeting had before it a report by the Audit and Risk Manager providing Committee with an update on the work of the Internal Audit Section. Page 7
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In response to a question from Councillor Coull asking if there was any update on the recruitment challenges detailed in paragraph 4.2, the Audit and Risk Manager advised following the unsuccessful recruitment of an Assistant Auditor and in order to meet the requirements of the Public Sector and Internal Audit Standards, having reviewed within the budget, an Auditor position on a part time basis had been advertised which he hoped would address some of the resource concerns. As a follow-up question, Councillor Gatt asked if the Audit and Risk Manager could provide Committee with assurance that there were enough staff resources and budget to carry out the audit role to the standard required. In response, the Audit and Risk Manager explained he had raised concerns regarding resources previously as part of the Public Sector Internal Audit Standards requirements and it was also an issue raised by as part of the external quality assessment from another Chief Internal Auditor. He advised the resources also cover the auditing requirements of the Moray Growth Deal, the Moray Integration Joint Board and the Levelling Up Fund and he was concerned that the level of resources is soon reaching a critical point in whether it can meet the demands on the service. The Interim Chief Executive advised he had been in dialogue with the Audit and Risk Manager on the issues and had responded formally to advise the matter would be addressed as part of phase 2 corporate management structure and had also discussed with the new permanent Chief Executive who was mindful of the issues raised. Following consideration the Committee unanimously agreed to note the report. 7. Internal Audit Review - Out of Area Placements The meeting had before it a report by the Audit and Risk Manager advising the Committee on an internal review completed for the period from 20 November 2025 to 12 February 2025. On the invitation of the Chair, Councillor Mustard, in relation to Recommendation 4 in Appendix 1 regarding determination of the ordinary residence, sought clarification on the circumstances which it would be necessary to escalate determination of an individual and ensure any actions are taken in conjunction and agreement with the individual and their families. The Audit and Risk Manager advised a number of criteria requires to be taken into consideration however within the report the reference is to review care delivery and care packages to the meet the needs of the individual with responsibility for the cost to either remain with the Council or move to the new council where the individual resides. In response to a question from Mr Augustus asking why financial monitoring had not taken place, the Audit and Risk Manager confirmed monitoring was taking placing, however the audit recommended further development on the monitoring requirement in taking out of area costs from larger budgets to consider them within a more defined budget. With reference to Recommendation 3 in Appendix 1, Councillor Stuart, noting that some of the issues contained in the report had been highlighted in previous adult social care commissioning reports, asked for confirmation that the timescale for implementation date accepted by the service for all placements to receive interim Service Level Agreements or contracts was 30 June 2026 as noted. In response, Page 8
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the Audit and Risk Manager advised the follow up review of adult social care and commissioning of contracts with external care providers was included in Internal Audit Plan for next year and confirmation will be sought regarding the implementation date of recommendations. As a follow-up, Councillor Stuart expressed concern at the implementation date given the financial factor given the substantial amounts of money involved and, in respect of best value in terms of outcomes and experiences for individuals, would have hoped this could have been implemented earlier. In response, the Audit and Risk Manager advised, with no one from the service in attendance to confirm, he expected implementation recommendations to be undertaken sooner rather than later. The Interim Chief Executive further confirmed he would discuss with the Chief Officer the possibility of an earlier implementation date. Councillor Colyer, appreciating the financial position of the Moray Integration Joint Board (MIJB), asked for individuals coming into Moray with expensive care packages whether there is a limit that can be set for a care package or if it is set in statute that the full package requires to be funded. In response, the Audit and Risk Manager advised the question would require a response from the service however it was his understanding that it would depend on the care requirement of the individual. Councillor Gatt expressed concern regarding how the situation had occurred as monitoring out of area expenditure should be automatic given the level of expenditure involved and what actions could be taken to resolve it. The Chair made reference to the Care First system being overdue for replacement and asked whether the replacement would assist implementation of some of the recommendations. In response, the Audit and Risk Manager confirmed the delayed replacement of Care First was concerning as it was the primary recording database within the service and from an audit perspective, in terms of the sensitivity of the information held within it, there was a need to progress with an updated system. He confirmed as the Auditor, he was required to provide an annual opinion on the control and governance arrangements of the MIJB and would be considering between this meeting and June the audit work that has been done, recommendations that have been implemented, not implemented, developments still to be done and whether there was a need to limit his annual opinion and raise concerns with this Committee. Councillor Coull stated it was positive the recommendations were accepted by the Chief Officer and asked whether there was any follow-up given that the timescale for implementation of 31 January 2025 in Recommendation 2 on Appendix 1 had now passed. In response the Audit and Risk Manager confirmed a follow-up review of the entire audit would commence after the last recommendation date had passed to evidence whether recommendations were being implemented which would be reported back to this Committee. Following on from concerns raised by members of the Committee, Councillor Keith stated the Committee had limited assurance given the wording used in the report and high risk identified and suggested it would have been beneficial if an officer from the service had attended the meeting to answer questions from the Committee. In relation to Recommendation 6 of Appendix 1, Councillor Keith noted the timescale for implementation for reviewing Care and Support Plans was 31 December 2025, and he would have liked to ask someone from the service what is involved in reviewing a Support Plan and understand why it would take so Page 9
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long to implement this recommendation. In response the Interim Chief Executive agreed he would have expected an officer from the MIJB to be in attendance at the meeting and, while expressing concern about a number of historical issues and capacity, he would discuss the concerns and issues raised including a review of the timescales proposed in the audit report with the Chief Officer. He confirmed he would provide Committee members with a note to provide assurance that the issues raised would be moved forward appropriately. Councillor Stuart welcome the assurance provided by the Interim Chief Executive and asked the Monitoring Officer whether it was within the remit of Committee to propose an amendment to have the timescale formally reviewed and reported back at an earlier date if the Committee felt the recommendations in the audit report were not strong enough. In response, the Monitoring Officer that the recommendations in the audit report would be followed up as part of the follow-up review undertaken by the auditor within the timescales agreed with the service however if Committee become frustrated at a lack of progress in relation to actions, it may be appropriate at that stage for this Committee to discuss with the appropriate bodies, namely MIJB. The Audit and Risk Manager confirmed until such time as the follow-up review is reported back, in other similar cases the service have provided progress update reports to this Committee to provide some assurance of progress in the implementation of the recommendations. The Interim Chief Executive, whilst having given commitment to seek a review, confirmed he could see no reason why the Committee could not challenge a date and ask for a particular deadline to be reviewed, however it would be entirely inappropriate for Committee to set a date as there required to be dialogue with officers through support and challenge to review any implementation dates. In response to a question from Councillor Kirby asking if it was possible for the follow-up review to take place before the last timescale for implementation date, the Audit and Risk Manager advised it would not be possible due to resources and audits to undertaken within the Action Plan. Councillor Colyer asked how the Interim Chief Executive proposed to share the information with the Committee following discussions with the Chief Officer. In response the Interim Chief Executive confirmed he would either speak with or write to the MIJB Chief Officer with a view to getting a written response back to members as soon as practicable. Following lengthy consideration, and with the assurance from the Interim Chief Executive to provide a written response to Committee following discussions with the Chief Officer, the Committee unanimously agreed to note the report. 8. Internal Audit Review - Treasury Management The meeting had before it a report by the Audit and Risk Manager advising Committee on an internal audit review completed for the period from 20 November 2024 to 12 February 2025. Following consideration the Committee unanimously agreed to note the report. 9. Internal Audit Review - Housing Rents Collection and Arrears Management Page 10
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The meeting had before it a report by the Audit and Risk Manager advising Committee on an internal audit review completed for the period from 20 November 2024 to 12 February 2025. In relation to Recommendation 1 of Appendix 1 and noting that the Rent Arrears Policy had not been reviewed since its introduction in 2013, Councillor Gatt noted there was a recurring theme in terms of policies not being reviewed for a considerable time and suggested introduction of a corporate policy register to avoid repetition of policies not being reviewed for considerable periods of time. In response the Head of Housing and Property Services acknowledged the slippage due to resource however confirmed a resource was assigned to review the policy as part of this years’ service plan and other housing related policies would be reviewed on a similar basis. Following consideration the Committee unanimously agreed to note the report. 10. Internal Audit Plan Year Ending 31 March 2026 The meeting had before it a report by the Audit and Risk Manager providing the Committee with details of the planned internal audit covering for the year ending 31 March 2026. With reference to paragraph 8.2 of Appendix 1 relating to Council Fraud Work, Councillor Macrae asked if the internal auditor has ever been notified of any such matters such as collecting non-domestic rates. In response the Audit and Risk Manager confirmed previously if there is a suspicion of an irregularity or fraud, he should be informed and would then review any such notifications in terms of any further investigations to be taken and any potential referral to Police Scotland. On the invitation of the Chair, Ms Pieri provided an update on the progress of the external audit plan confirming the draft plan would be issued in the next few weeks and would be reported to the next meeting of this Committee in May. Following consideration the Committee unanimously agreed to note the proposed internal audit coverage for the 2025/26 financial year. 11. Internal Audit Review - St Giles Shopping Centre - Non-Domestic Rates [Para 6] The meeting had before it a report advising Committee on an internal audit review completed for the period from 20 November 2024 to 12 February 2025. Councillor Gatt welcomed the internal audit recommendations contained in the audit report and, in order to highlight the importance of the audit recommendations being progressed, moved to change the wording of the recommendation in the report replacing the word "note" with "endorse". This was seconded by Councillor Lawrence. Following consideration and there being no one otherwise minded, the Committee unanimously agreed to endorse the report. Page 11
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Report to: Audit and Scrutiny Committee Meeting Date: 7 May 2025 Report by: Audit and Risk Manager Report No: GSP007/25/DL Author: Dafydd Lewis Contact Email: dafydd.lewis@moray.gov.uk Subject: Internal Audit Section Update Report 1. PURPOSE ☒ For Decision ☐ For Information 1.1 The purpose of this report is to consider an update on the work of the Internal Audit Section. 1.2 This report is submitted to Committee in terms of Section III (I) (2) and (8) of the Council’s Scheme of Administration relating to consideration of reports from the Council’s Internal Auditor and monitoring delivery of the audit service through receipt of quarterly reports on work carried out by Internal Audit. 2. SUMMARY 2.1 Public Sector Internal Audit Standards requires the Audit and Risk Manager to prepare and present reports to committee on internal audit’s activity, performance relative to its Audit Plan, and any other relevant matters. 2.2 This report provides an update on audit activity and projects progressed since the last meeting. 3. RECOMMENDATIONS 3.1 It is recommended that Committee: i) Considers and notes the contents of this report, seek clarification on any points. Dafydd Lewis Audit and Risk Manager 4. BACKGROUND AND CONTEXT Item 5. Page 13
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Internal Audit Plan Update 4.1 The Audit Plan is a means of determining the priorities of the internal audit activity and how these align with the broader goals of the Council. Enclosed in Appendix 1 is an update on the progress made by the Internal Audit Section in completing audit review projects in accordance with the Annual Audit Plan. As detailed to this Committee on 12 February 2025 (refer to paragraph 6 of the minutes), there has been a requirement to carry forward the reviews of absence management and payroll payment testing to the 2025/26 Internal Audit Plan. Follow Up Reviews 4.2 Internal Audit reports are regularly presented to Members detailing not only findings but also the responses by management to the recommendations with agreed dates of implementation. Internal Audit will also undertake follow up reviews to evidence the effective implementation of these recommendations. Please see detailed the following completed follow up reviews: Domestic Refuse 4.3 This follow-up review examined the implementation of recommendations made in a previous review of systems and procedures related to the collection of domestic waste. The audit also assessed the procedures for disposing of recyclable waste. Moray Council collects refuse from approximately 46,000 domestic properties at an annual cost of £3.5 million. A previous follow-up review was reported to this Committee on 25 June 2024 (paragraph 7 of the minutes refers). It was noted that one recommendation remained outstanding due to the Scottish Government’s delay in introducing the national Deposit Return Scheme, now scheduled for October 2027. It was agreed that another audit review on this subject would be included in a future audit plan to assess implementation. However, one recommendation concerning the formalisation of arrangements for recycling aluminium and steel cans included a revised implementation date of 10 February 2025. I am pleased to report that a dry mixed recyclates contract, including can recycling, has been awarded. Foster and Kinship Care Payments 4.4 A follow-up review was undertaken to assess the implementation of recommendations from a previous audit of the administrative arrangements for fostering and kinship care payments. The reporting template for this review follows a new format, developed in consultation with the Audit Management Software Supplier. This format aims to enhance understanding and transparency in reporting the findings and tracking the implementation of recommendations by services. There will be a transition period between the previous and current reporting formats. 4.5 The audit reviewed the processing of fostering and kinship payments, ensuring that fees and allowances are administered in accordance with agreed policies and procedures. It is pleasing to report that, within the scope of the audit, the management of fostering and kinship payments was well managed. However, some administrative control improvements were identified, particularly regarding the recording of information and the introduction of additional verification checks to confirm eligibility for ongoing kinship allowance payments. The follow-up review found that the implementation of recommendations had progressed, but further checks were required to verify the educational status of individuals residing outside Moray. The Follow-Up Report reviewing the implementation of the agreed recommendations is provided in Appendix 2. Page 14
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Self Directed Support (SDS) 4.6 An audit was previously conducted on the financial monitoring arrangements within the SDS Team for direct payments made to individuals receiving adult social care services. The audit assessed the effectiveness of procedures for monitoring funds issued to service users. This involved randomly selecting a sample of care packages and verifying compliance with operating procedures, ensuring that service user expenditures aligned with agreed budgets and support plans, and confirming that surplus funds were recovered where appropriate. 4.7 The Follow-Up Report, reviewing the implementation of the audit's agreed recommendations, is provided in Appendix 3. Significant progress has been made by the Service in implementing these recommendations. While workload and staffing concerns are acknowledged, several recommendations remain only partially implemented. This is the third follow-up review conducted by the Internal Audit Section for this audit. The Service has indicated that all recommendations should be fully implemented during 2025/26. It is proposed that no further follow-up review be conducted; however, an audit of Self-Directed Support for direct payments will be included in a future Internal Audit Plan. Keith Sports and Community Centre 4.8 This follow-up review assessed the implementation of recommendations from an audit of Keith Sports and Community Centre. The audit evaluated the effectiveness of internal controls related to income and expenditure. It also included a review of the income collection and monitoring arrangements for the FitLife? membership scheme. Additionally, the audit examined whether the processing of debit and credit card transactions complies with the Payment Card Industry Data Security Standard. The follow-up review noted the implementation of recommendations contained within the audit report, with the Service undertaking significant action in the recovery of outstanding FitLife? membership fees due to the Council. The Follow-Up Report reviewing the implementation of the agreed recommendations is provided in Appendix 4. Building Services - Planned Maintenance Projects 4.9 This follow-up review examined the implementation of recommendations made in a previous audit of Planned Maintenance Projects undertaken by Building Services. The audit undertook an overview of how the annual planned maintenance programme is determined and the contract management arrangements for individual projects within Building Services. Additional testing was also conducted on the systems for managing and controlling overtime payments to officers. The follow-up review was delayed to align with a responsive repairs audit to minimise further operational disruptions within Building Services. It was found that good progress has been made in implementing the recommendations. However, further development is still required to ensure greater transparency in the rates used, as well as in the accounting arrangements for determining budgets and recovering the costs of planned maintenance work. The Follow-Up Report, which evaluates the implementation of the agreed recommendations, is provided in Appendix 5. 5. PROPOSALS 5.1 It is recommended that Committee agree to note the progress made by Internal Audit in the period from 12 February 2025 to 7 May 2025. Page 15
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6. SUMMARY OF IMPLICATIONS 6.1 The table below shows whether risks and implications apply if the recommendations are agreed: SUBJECT YES NO Corporate Plan and 10 Year Plan (Local Outcome Improvement Plan) × Policy and Legal × Financial × Risk × Staffing × Best Value and Transformation × Property × Information Communications Technology/Digital × Equalities. Social Inclusion and Economic Impact × Climate Change, Biodiversity and Sustainability × 6.2 Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Improved Collaborative Leadership, as part of continuous improvement through Best Value, will better enable the Council to fulfil the ambitions set out in its strategic plans. a) Links to Council Corporate Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities: ☐ Tackle Poverty and Inequality. ☐ Build Stronger Greener Vibrant Economy. ☐ Build Thriving, resilient, empowered Communities. b) Links to Local Outcomes Improvement Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following local Outcomes Improvement Plan priorities: ☐ Developing a diverse, inclusive, and sustainable economy ☐ Building a better future for our children and young people in Moray. ☐ Empowering and connecting communities. ☐ Improving wellbeing of our population 6.3 Policy and Legal No implications directly arising from this report. 6.4 Financial No implications directly arising from this report. One off Costs: Service Area Budget Budget Years Proposed Spend this Year Virement From Other Comments Page 16
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Annually Recurring Costs: Service Area Budget With Effect From Annual Net Impact Virement From (if applicable) Other Comments 6.5 Risk The independent review of selected systems and procedures mitigates the risk associated with inadequate or ineffective control procedures. 6.6 Staffing No implications directly arising from this report. 6.7 Best Value and Transformation Internal audit work supports good governance and the delivery of efficient services. 6.8 Property No implications directly arising from this report. 6.9 Information Communications/Technology/Digital No implications directly arising from this report. 6.10 Equalities, Social Inclusion and Economic Impact No implications directly arising from this report. 6.11 Climate Change and Biodiversity Impacts No implications directly arising from this report. 7. CONSULTATION 7.1 There have been no direct consultations during the preparation of this report. 8. BACKGROUND PAPERS 8.1 None Page 17
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APPENDIX 1 MORAY COUNCIL INTERNAL AUDIT SERVICE ANNUAL AUDIT PLAN 2024/25 CORE FINANCIAL SYSTEMS Area Type of coverage Status/ Comments Payroll Continuous auditing to confirm the adequacy of the systems and procedures for the payment of salaries. Audit Review to be carried forward to a future Audit Plan Procurement and Creditor Payments Continuous auditing of samples of non- pay expenditure to test compliance with procurement and payment processing regulations. Completed ICT Hardware Asset Management review of systems and practices to record / monitor the location and use of ICT hardware. Audit Review and Draft Report Completed Stocks and stores - year end valuations Attendance at stocktaking and reconciliation of stocks held to ledger balances. Year end stock valuations agreed OTHER SYSTEMS Area Type of coverage Housing and Property Reactive Maintenance Works Audit of works undertaken within Building Services for the completion of reactive maintenance works (Council Housing). Completed Grant Claims Certification of grant claims as required: strategic timber; network support grant, regeneration schemes as appropriate The review of the Network Support Grant to Transport Scotland for the period up to 13 October 2024 is ongoing. Page 18
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APPENDIX 1 Housing Rent Collection & Arrears Management A review of the income collection and accounting arrangements for housing rents. Completed Moray Growth Deal An audit review of the governance and administrative procedures within the Council for the management of the Moray Growth Deal. The scope will include the concerning partnership working, financial management and measuring success. Completed Education – Secondary School Establishment visits as part of cyclical review. Audit Review and Draft Report Completed Treasury Management To provide assurance that processes and controls are continuing to operate effectively for the Council's treasury management system. Completed Commercial Refuse Collection To consider whether adequate control is in place covering trade waste income and expenditure, that appropriate agreements and other paperwork is in place, and that accounting arrangements are robust. Completed Governance arrangements to prevent Fraud and Corruption Overview of the Councils governance arrangements to prevent fraud and corruption. The audit will use the Cipfa Code of practice on managing the risk of fraud and corruption as the basis in developing the audit programme for the review. Completed Education- Secondary School Premises Security Review the controls in place to mitigate the risk of unauthorised access to Secondary School Premises. Audit Review and Draft Report Completed Page 19
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APPENDIX 1 Absence Management An audit to consider the effectiveness of sickness absence monitoring and reporting. Audit Review to be carried forward to a future Audit Plan Following the Public Pound To ensure that there is proper accountability for public funds used in delivering services, irrespective of the means of service delivery. Completed Moray Integration Joint Board Residential Care An audit to review the adequacy of procedures and administrative arrangements regarding the third party suppliers appointed to provide care home services The audit will also include testing to verify the accuracy of the financial assessments and the charging for residential care of both respite and permanent care residents. Audit Review Ongoing Out of area placement A review of the systems and procedures regarding adult services users that are out of area but responsibility remains to meet their eligible care and support needs under the Care Act. Completed Fostering and Kinship payments A review to ensure that the internal controls in place for administering Fostering and Kinship Care Allowances are operating effectively. Completed Follow Up reviews to be undertaken from previous Audit Assignments * Audit Review: Original Scope Status/ Comments Page 20
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APPENDIX 1 Self Directed Support (SDS) – Option 1 This audit remit was to review Option 1 Direct Payments under the SDS scheme, where a payment is made by the local authority directly to a supported person for the provision of support. The scope of the audit was to ensure compliance with operating guidelines in the financial management of SDS packages, expenditure incurred is in accordance with the agreed budget and support plans, and surplus funds are recovered from service users where appropriate. Completed Self Directed Support (SDS) – Option 2/3 The scope of the audit was to review systems and procedures in the delivery and management of adult social care provided under Options 2 and 3 of the SDS scheme. This included examination of the processes to support individuals in determining their preferred care delivery option, contractual relationships with care providers, financial management and monitoring of individual care packages. Follow Up Review currently in progress Building Services - Planned Maintenance Projects An overview was undertaken of how the annual planned maintenance programme is determined and the contract management arrangements of these projects by Building Services. The audit also involved a random selection of projects to verify costs can be evidenced to supporting documentation. Additional testing was also undertaken of the systems regarding the management and control of overtime paid to officers. Completed Emergency Planning The objective of this audit was to provide assurance over the adequacy and effectiveness of current controls over emergency planning. The audit scope included a check to ensure adequate training, planning and testing has been developed in the event of an emergency. Follow Up Review currently in progress Page 21
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APPENDIX 1 Domestic Refuse Collection The scope of this audit was to review systems and procedures to ensure the most effective and efficient use is made of resources for the collection of domestic waste. The audit also checked the arrangements for disposing of recyclable waste. This included disposal of plastic, glass and biodegradable waste, in addition to paper / card, aluminium and steel cans for which the Council received regular payments from recycling contractors. Completed Pool Cars Scheme The scope of this audit was to review systems and procedures in the management and use of pool cars. Policies and procedures were checked to ensure they provide appropriate operating guidance to officers in the booking and use of pool cars. The audit included a review of arrangements for internal recharging to services and also exploration if further use of pool cars could provide additional value for money opportunities to the Council. Follow Up Review currently in progress Cyber Security The audit reviewed systems, practices and an assessment of the controls in place to protect the Council from a cyber-attack. The audit also reviewed Information, Communication and Technology (ICT) security policies and procedures to ensure they are regularly reviewed and promote best practices. The audit programme has been developed from the Scottish Government Cyber Resilience Framework and other good practice guidelines. Completed Moray Integrated Community Stores The audit reviewed the management of the Moray Integrated Community Stores. This included reviewing the procedures for ordering and issuing occupational therapy equipment to service users. In addition, a check was made to compare stock Follow Up Review currently in progress Page 22
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APPENDIX 1 records to the actual equipment held within the Stores. Forres Academy The audit reviewed the operation of the Devolved School Management Scheme regarding the allocation of funding and the management of these funds at the school level. The review involved a study of the management of the significant staffing costs involved in delivering the curriculum, a review of procurement practices, an examination of the School's administration of income and also confirming accountability for School Fund monies. Completed Email Security The audit checked the system controls and supporting policies and procedures used to administer the Council's email system. The audit also reviewed the arrangements for risk identification and actions undertaken to protect the Council from phishing emails. In addition, in response to a request from an elected member, the audit included a review of the password management controls for members access to the Council networks and systems. Follow Up Review currently in progress Keith Sports & Community Centre The audit scope reviewed the processes and procedures in place at the Keith Sports and Community Centre and evaluate the effectiveness of internal controls relating to income and expenditure. This involved the sample testing of individual transactions to ensure compliance with Regulations and Guidelines. In addition, an appraisal of working practices was also undertaken to assess if the Service was maximising the income due to the Council Completed Foster and Kinship Care Payments The audit scope reviewed policies and procedures for the management of fostering and kinship payment of fees and allowances are Completed Page 23
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APPENDIX 1 administered in accordance with these policies and procedures and are operating within budgetary control. Early Learning and Childcare Premises Security The scope of the audit reviewed policies, procedures, and an appraisal of the security controls within nursery buildings and play areas. The audit included a review of guidelines issued centrally by the Early Learning and Childcare Service and instructions or handbooks that individual nurseries may have developed. The audit process involved selecting a sample of both Council and privately run nurseries to visit, where the actual security controls operating in practice were observed and tested Follow Up Review currently in progress * Additional follow up reviews may be reported depending on the implementation dates detailed by Services for recommendation Page 24
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APPENDIX 2 1 Final Internal Audit Report (Follow-up Review) Fostering and Kinship Care Payments March 2025 Distribution: Chief Social Work Officer Children and Families Social Work Service Manager The Internal Audit Section provides Management with an opinion on the internal control environment and also categories risk ratings for recommendations as high, medium or low (detailed explanation provided in Appendix1). The audit recommendations for this review have been classified as follows Assurance Level Risk Ratings for Recommendations Substantial Priority 1 0 Priority 2 1 Priority 3 2 Confidentiality and Disclosure Clause This report (“Report”) was prepared by the Internal Audit Section of Moray Council. The matters raised in this Report are only those which came to our attention during our internal audit work. Whilst every care has been taken to ensure that the information provided in this Report is as accurate as possible, the Moray Council Internal Audit Section has only been able to base findings on the information and documentation provided and consequently, no complete guarantee can be given that this Report is necessarily a comprehensive statement of all the weaknesses that exist, or of all the improvements that may be required. This Report was prepared solely for the use and benefit of the Moray Council, Moray Integration Joint Board or the Grampian Valuation Joint Board. Moray Council's Internal Audit Section accepts no responsibility and disclaims all liability to any third party who purports to use or rely for any reason whatsoever on the Report, its contents, conclusions, any extract, reinterpretation, amendment and/or modification. Accordingly, any reliance placed on the Report, its contents, conclusions, any extract, reinterpretation, amendment and/or modification by any third party is entirely at their own risk. Please refer to the Statement of Responsibility in Appendix 2 of this report for further information about responsibilities, limitations and confidentiality. Page 25
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Appendix 2 2 Contents Page Fostering and Kinship Care Payments 1. Introduction & Scope 3 2. Key Issues 3-4 Detailed Report 3. Findings/Recommendations 5-9 4. Management Response 5-9 Appendices 1. Audit Terms of Reference and Definitions 2. Statement of Responsibility Page 26
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Appendix 2 3 1. Introduction and Audit Scope The 2024/25 Annual Audit Plan provides for a review of the administration of Fostering and Kinship Care Payments. Fostering occurs when a child cannot be cared for by their birth parents, or by their extended family or close friends, and need to be cared for by an approved foster family. Whereas kinship care is where a child is unable to live with their birth parent and resides instead with a relative or other individual with whom they have a pre-existing relationship, e.g., a sibling or close family friend. In August 2023, the Scottish Government and COSLA agreed on the Scottish Recommended Allowance for foster and kinship carers. In addition, foster carers are also paid a weekly fee depending on their skill levels and experience. A review of the Council’s Financial Management System noted that fostering and kinship payments made to carers in 2023/24 amounted to £1.2 million and £443,000 respectively. At the time of the audit, the Council financially supports 47 children in foster care and 80 children within kinship arrangements. The audit scope reviewed policies and procedures for the management of fostering and kinship payment of fees and allowances are administered in accordance with these policies and procedures and are operating within budgetary control. The audit was carried out in accordance with Public Sector Internal Audit Standards (PSIAS). 2. Key Issues The audit found that the management and processing of fostering and kinship payments were well managed. However, some systems and administrative control improvements were noted, including: • The audit noted the Service has detailed case recording procedures to assist officers in managing foster and kinship arrangements. However, audit testing of a sample of care arrangements noted that some documents, although found, had not been saved in the correct location in accordance with agreed procedures. In addition, it was also noted a need to update the Kinship Carer Agreement between the Council and carers to reflect current data protection legislation. • The scope of this audit included reviewing the controls in place to verify the ongoing entitlement of allowances and fees paid to carers. It was noted that a financial irregularity has occurred within another Scottish Local Authority concerning a significant overpayment of a kinship Page 27
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Appendix 2 4 payment made to a carer. The irregularity related to the ongoing payment when the child no longer stayed with the kinship carer. It is pleasing to note that the Service has controls in place to check carers eligibility to maintain continued allowance payments; however, further verification testing should also be considered. Page 28
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5 Findings/Recommendations - Fostering and Kinship Care Payments 2024/25 Ref Risk Ratings for Recommendations Audit Finding Audit Recommendation 1. Low A requirement of the kinship care placement process for a child is for a carer to agree and sign a Kinship Carer Agreement with the Council. This document details the duties and obligations of both the Council and the carer regarding the ongoing care responsibility for the child. The audit found that on review of the Kinship Carer Agreement, reference is made to previous data protection legislation. The Kinship Carer Agreement template should be reviewed and updated with reference to the current data protection legislation. Management Response Responsible Officer Accepted (Yes/ No) Timescale for Implementation (Date Required) Agreed Management Action/Management Comment Children and Families Social Work Service Manager Yes Implemented Kinship Carer Agreement template has been amended to reflect current data protection legislation. Follow Up Review Implementation Status Revised Implementation Date Internal Audit Review Outcome Implemented N/A Follow up review has confirmed that that Kinship Carer Agreement template has been updated to reflect current data protection legislation. Page 29
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6 Ref Risk Ratings for Recommendations Audit Finding Audit Recommendation 2. Low In addition to a review of the arrangements for administering fostering and kinship payments, a check was also made to ensure that documentation retention of information and key documents for managing the relationship between the Council and the carer was saved in accordance with the Case Recording Procedures. Audit testing of a sample of care arrangements noted that some documents, although found, had not been saved within a location that was per these agreed procedures. All officers administering fostering and kinship arrangements with carers should be reminded that the recording and retention of documents should be in accordance with the Case Recording Procedures. Management Response Responsible Officer Accepted (Yes/ No) Timescale for Implementation (Date Required) Agreed Management Action/Management Comment Children and Families Social Work Service Manager Yes 31/10/2024 Reminder will be issued by the Business Support Team to officers of the requirement to follow Case Recording Procedures around recording and retention of documents. Page 30
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7 Follow Up Review Implementation Status Revised Implementation Date Internal Audit Review Outcome Implemented N/A Business Support Team has issued a reminder to officers of the requirement to follow Case Recording Procedures regarding the recording and retention of documents. Page 31
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8 Ref Risk Ratings for Recommendations Audit Findin Audit Recommendation 3. Medium As part of the research for this audit, it was noted that a financial irregularity had occurred within another Scottish Local Authority concerning a significant overpayment of a kinship payment made to a carer. The overpayment occurred due to ongoing payment when the child no longer stayed with the kinship carer. The Council concerned was contacted to gain a further understanding of the issues that have assisted in developing the audit programme of testing for this review. It is pleasing to note that the Service introduced a requirement a few years ago for carers to make a self-declaration of eligibility to maintain continued allowance payments. However, it is considered that further verification checks should also be considered. In accordance with the Children (Scotland) Act 1995, a carer is entitled to a kinship allowance payment until the young person is 18 if they remain in full time education. Further to discussions with the Service, consideration should be given to undertaking regular verification checks to confirm details of educational status and address for children within a kinship residence order arrangement with Education Services. Management Response Responsible Officer Accepted (Yes/ No) Timescale for Implementation (Date Required) Agreed Management Action/Management Comment Children and Families Social Work Service Manager Yes Implemented A new process has been implemented for residence carers to complete the details of the child’s school on their annual return. This information will be checked regularly with Page 32
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9 Education Services to ensure there is no change in circumstances. Follow Up Review Implementation Status Revised Implementation Date Internal Audit Review Outcome Implemented N/A The follow up review has found that processes have been amended to require residence carers to complete the details of the child’s school on their annual return. Testing confirmed that for locally resident carers, information is checked regularly with Education Services to ensure no change in circumstances. For out of area residence carers processes are now in place for residence details to be verified directly with the child’s school. Page 33
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10 Appendix 1 AUDIT TERMS OF REFERENCE AND DEFINITIONS 1. Audit Objectives 1.1 The overall audit objective is to provide an objective independent opinion on the adequacy and effectiveness of controls / processes. 1.2 The audit will for each controls / process being considered: • Walkthrough the processes to consider the key controls; • Conduct sample testing of the identified key controls, and • Report on these accordingly 1.3 All audit reviews are carried out in accordance with Public Sector Internal Audit Standards (PSIAS). 2. Definitions for Auditing Opinions and Findings 2.1 In order to assist management in using our reports: The Internal Auditor will categorise audit assurance opinion according to their overall assessment of the risk management system, effectiveness of the controls in place and the level of compliance with these controls and the action being taken to remedy significant findings or weaknesses. Assurance Level System and Testing Conclusion Full The controls tested are being consistently applied Substantial There is evidence that the level of non compliance with some of the controls may put some of the system objectives at risk. Limited The level of non compliance puts the system objectives at risk. None Significant non-compliance with basic controls leaves the system open to error or abuse. 2.2 Risk ratings for each recommendation is based on the following criteria: High Fundamental control weaknesses that require immediate attention by management to action and mitigate significant exposure to risk Medium Less critically important controls absent, not being operated as designed or could be improved Low Lower level controls absent, not being operated as designed or could be improved. Page 34
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11 Appendix 2 STATEMENT OF RESPONSIBILITY The responsibility for designing and maintaining a sound system of internal control to prevent and detect fraud and other irregularities rests with management, with internal audit providing a service to management to support them to achieve this objective. The Internal Audit Section will assess the adequacy and effectiveness of the system of internal control arrangements implemented by management and perform sample testing on those controls in the period under review with a view to providing an opinion on the extent to which risks in this area are managed. The Internal Audit Section will undertake testing with the objective of detecting significant control weaknesses. However, the audit approach alone should not be relied upon to identify all strengths and weaknesses in internal controls nor to find any fraud or irregularity. Even sound systems of internal control can only provide reasonable and not absolute assurance and may not be proof against collusive fraud. The matters raised in this report are only those that came to our attention during the course of the audit review and are not necessarily a comprehensive statement of all the weaknesses that exist or all improvements that might be made. Recommendations for improvements should be assessed by management for their full impact before they are implemented. The performance of the audit review undertaken should not be taken as a substitute for management’s responsibilities for the application of sound management practices. This report must not be disclosed to any third party or reproduced in whole or in part without the written consent of the Moray Council’s Audit and Risk Manager. Page 35
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APPENDIX 3 Moray Council Internal Audit Section 1 BODY: Health & Social Care Moray SUBJECT: Self-Directed Support Financial Review REPORT REF: 22'013 Follow Up Audit Review Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation Key Control: Clear and current policy documents and operational guidelines have been developed for the financial administration of SDS packages. 5.01 The SDS Direct Payment guidance and financial monitoring procedures should be reviewed and updated on a regular basis. Low Yes 30/04/2022 Implemented. Implementation completed as detailed in the follow-up report presented to the Council’s Audit & Scrutiny Committee on 10/05/2023 (para 7 of minute refers) and MIJB’s Audit, Performance & Risk Committee on 29/06/2023 (para 5 of minute refers). Page 36
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APPENDIX 3 Moray Council Internal Audit Section 2 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation Key Control: Financial reviews are being carried out to monitor the usage of SDS funding in accordance with operational guidelines. 5.02 Annual financial reviews should be undertaken in line with the direct payment financial monitoring procedures. High Yes 31/01/2022 (Revised Implementation Date 31/08/2023; Further Revised Implementation Date 30/09/2024) Part Implemented. Significant progress has been evidenced as made in undertaking annual financial reviews with the appointment of a temporary Finance Assistant post in September 2023. As an indication of the improvement in scale, 331 reviews were carried out in the 2024 calendar year compared to 107 undertaken in 2023. The additional resource has allowed all unmanaged accounts to be subjected to an annual review and although a backlog of managed account annual reviews is still in existence, this is being worked through using a Page 37
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APPENDIX 3 Moray Council Internal Audit Section 3 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation logical system of risk-based prioritisation and all overdue reviews have been allocated to officers within the SDS Team for future undertaking. Accurate records are being kept of completed activities and due reviews and management are employing effective monitoring to direct limited resources to best use. It is considered that the service is applying focus to the financial review requirements and are on a clear path to address the recommendation fully by 31/03/2026 within current staff resources. 5.03 Consideration should be given to the routine production of reports Medium Yes 31/12/2021 Implemented. Implementation completed as detailed in the follow-up report presented to the Page 38
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APPENDIX 3 Moray Council Internal Audit Section 4 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation from the Care First System which can be used to detail financial reviews falling due and allow management to prioritise workloads accordingly. The requirement of manual spreadsheets should be minimised wherever possible to ensure information reference points come direct from the Care First system. Council’s Audit & Scrutiny Committee on 10/05/2023 (para 7 of minute refers) and MIJB’s Audit, Performance & Risk Committee on 29/06/2023 (para 5 of minute refers). 5.04 A risk based approach should be initiated by management to prioritise outstanding financial reviews and work through the backlog in an order which makes High Yes 31/12/2021 (Revised Implementation Date 31/08/2023) Implemented. Implementation completed as detailed in the follow-up report presented to MIJB’s Audit, Performance & Risk Committee on 26/10/2023 (para 7 of minute refers) and the Council’s Audit & Scrutiny Committee on Page 39
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APPENDIX 3 Moray Council Internal Audit Section 5 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation best use of limited resources. 22/11/2023 (para 5 of minute refers). 5.05 A reminder should be issued to people receiving services, and approved payroll providers where applicable, to inform the Authority when funds in excess of the contingency amount are held. This may assist in the prioritisation of early financial reviews and highlight issues for further investigation. High Yes 30/04/2022 Implemented. Implementation completed as detailed in the follow-up report presented to the Council’s Audit & Scrutiny Committee on 10/05/2023 (para 7 of minute refers) and MIJB’s Audit, Performance & Risk Committee on 29/06/2023 (para 5 of minute refers). Page 40
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APPENDIX 3 Moray Council Internal Audit Section 6 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation 5.06 A review should be undertaken of all people receiving a service in regard to the current balances held within their SDS bank account. Action should then be taken to recover excess funds. High Yes 30/04/2022 (Revised Implementation Date 31/08/2023; Further Revised Implementation Date 30/09/2024) Implemented. Annual reviews for unmanaged accounts has allowed appropriate surpluses to be recovered on an ongoing basis. In relation to managed accounts where some annual reviews remain overdue as detailed at recommendation 5.02, bank balances are being obtained monthly and surpluses reclaimed where appropriate even though a comprehensive review has not yet been undertaken. Surpluses reclaimed in the 24/25 financial year to date, 10 months from April to December, amount to the significant sum of £932,337, illustrating the progress made by the SDS Team. Page 41
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APPENDIX 3 Moray Council Internal Audit Section 7 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation 5.07 In compliance with established procedures, one-off direct payments should be subject to a financial monitoring review 3 months (or in limited circumstances at another interval) after the funding has been distributed to confirm its appropriate usage. Medium Yes 30/04/2022 (Revised Implementation Date 31/08/2023; Further Revised Implementation Date 31/03/2024) Part Implemented. Significant progress has been evidenced as made in undertaking reviews falling due, as detailed at recommendation 5.02. Although a small number of one-off payment reviews remain overdue, the backlog is being worked through using a logical system of risk-based prioritisation and all overdue reviews have been allocated to officers within the SDS Team for future undertaking. It is considered that the service is applying focus to the financial review requirements and are on a clear path to address the recommendation fully by 31/03/2026 within current staff resources. Page 42
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APPENDIX 3 Moray Council Internal Audit Section 8 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation 5.08 The Service should comply with the monitoring requirements detailed within an agreement between the Council and the Service User for the purchase and adaptation of a mini van. Medium Yes 31/12/2021 (Revised Implementation Date 31/03/2023; Further Revised Implementation Date 31/12/2023) Implemented. Inspection visits have been undertaken and current MOT, road tax and insurance has been confirmed as held. The regulatory requirements will continue to be monitored by ongoing reviews for the period of the legal agreement. 5.09 Closing financial reviews of SDS care packages should be undertaken in accordance with agreed procedures. Evidence should be retained of any expenditure outwith the agreed support plan and of the full Medium Yes 31/12/2021 (Revised Implementation Date 31/08/2023; Further Revised Implementation Part Implemented. Significant progress has been evidenced as made in undertaking reviews falling due, as detailed at recommendation 5.02 and in common with recommendation 5.07. Although a number of closing reviews remain overdue, the backlog is being worked through and all overdue reviews have been allocated to Page 43
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APPENDIX 3 Moray Council Internal Audit Section 9 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation discussions held and decisions made by Social Workers regarding retrospective authorisation. Date 30/09/2024) officers within the SDS Team for future undertaking. It is considered that the service is applying focus to the financial review requirements and are on a clear path to address the recommendation fully by 31/03/2026 within current staff resources. Key Control: SDS Funding is only used to support the service user's support plan outcomes and compliance is monitored to ensure public funds are spend appropriately. 5.10 Care and Support Plans should be reviewed annually to ensure the agreed care is being provided and High Yes 01/05/2022 (Revised Implementation Outstanding. The issue of annual reviews of care and support plans not being able to be resourced has also been raised in the audit of Page 44
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APPENDIX 3 Moray Council Internal Audit Section 10 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation continues to meet the needs of the person receiving the service. Date 31/08/2023; Further Revised Implementation Date 30/09/2024) SDS Option 2/3 and the recent Out of Area Placements audit. The Heads of Service have stated a review schedule is to be established and reviews considered as part of efficiencies strategies. An implementation date of 31/12/2025 has now been set and progress will be reported in the Out of Area Placements follow-up review in due course. 5.11 All Social Workers should be reminded of the requirement to inform the SDS Team of any amendment to a Support Plan that will have a financial change to a the care package of a person receiving a service. High Yes 01/12/2022 Implemented. Implementation completed as detailed in the follow-up report presented to the Council’s Audit & Scrutiny Committee on 10/05/2023 (para 7 of minute refers) and MIJB’s Audit, Performance & Risk Committee on 29/06/2023 (para 5 of minute refers). Page 45
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APPENDIX 3 Moray Council Internal Audit Section 11 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation Key Control: SDS service has effective arrangements in place to monitor support packages and report on performance. 5.12 Consideration should be given to the development of appropriate performance monitoring measures to be reported to service management on a regular basis. Given the current backlog of reviews and consequences of direct payment accounts not being scrutinised on a timely schedule, it may be beneficial for performance information to be made available Low Yes 30/09/2022 (Revised Implementation Date 31/03/2023) Implemented. Implementation completed as detailed in the follow-up report presented to MIJB’s Audit, Performance & Risk Committee on 26/10/2023 (para 7 of minute refers) and the Council’s Audit & Scrutiny Committee on 22/11/2023 (para 5 of minute refers). Page 46
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APPENDIX 3 Moray Council Internal Audit Section 12 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation for management to identify any resourcing issues arising and assess risks involved. Page 47
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APPENDIX 4 Moray Council Internal Audit Section 1 DEPARTMENT: Education, Communities & Organisational Development SUBJECT: Keith Sports and Community Centre REPORT REF: 24'024 Follow Up Audit Review Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation 5.01 In accordance with Financial Regulations and Petty Cash Guidance, reimbursement of parking fees must be made through an officer’s expenses claim and not from the petty cash account. Low Yes Implemented Implemented – The Keith Sports and Community Centre (Centre) no longer has a petty cash fund; officers will be reimbursed for parking fees by submitting a Mileage & Other Expenses Claim Form to the Payroll Service. Page 48
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APPENDIX 4 Moray Council Internal Audit Section 2 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation 5.02 Details of the numbered receipt provided by a security company for cash collections should be recorded within the income records at the Centre Medium Yes 30/06/2024 Implemented - Details of the numbered receipt provided by the security company for cash collections are now attached to the income records held at the Centre. 5.03 Officers must use their individual login credentials when using the Gladstone system. Medium Yes 30/06/2024 Implemented – It was noted that officers at the Centre have been reminded to use their individual log-in credentials when logging in and using the Gladstone system. 5.04 A reconciliation between the Gladstone system and FMS should be undertaken to identify service users with no agreed payment plans. New payment plans should then be agreed Medium Yes 31/07/2024 Implemented - A reconciliation exercise has been undertaken between the Gladstone system and the Council’s Financial Management System (FMS). It was found that 50 accounts had active membership but with no Page 49
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APPENDIX 4 Moray Council Internal Audit Section 3 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation for the service users identified, or membership should be cancelled. established direct debit payment arrangement. The total outstanding amount due to the Council has been calculated as £32,652. The Service is undertaking action to recover this outstanding income due to the Council. 5.05 Failure in direct debit payments should result in the immediate suspension of a service users FitLife? membership. Medium Yes 30/09/2024 Implemented - The payment of direct debits for FitLife? Membership is now managed through the Gladstone system. Any payment failures are automatically flagged and continued use of membership by a service user is only permitted on payment of the outstanding balance. 5.06 Regular reviews should be undertaken of FitLife? Service users to ensure they remain within the correct category of membership. Medium Yes 30/06/2024 Implemented – The follow-up review has noted that an exercise has been undertaken to identify historical instances of family memberships where a child has turned 18, and a membership status change is required. Monthly procedures Page 50
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APPENDIX 4 Moray Council Internal Audit Section 4 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation are now in place to identify any family membership users where a child will soon be 18 years of age, with contact then made with the account holder detailing a need to amend their membership category. 5.07 A review should be undertaken to assess the need to maintain a Repairs and Works Log. If required, processing of minor work orders should be in accordance with agreed Centre procedures Low Yes 30/06/2024 Implemented - A review of repair work logs maintained at the centre was carried out and all works were found to be recorded in accordance with local procedures. 5.08 Sporting equipment and clothing bought for re-sale should be purchased in accordance with Medium Yes 31/08/2024 (Revised Implementation Part Implemented - The follow up review noted that stock control records detailing the quantity of items held for resale are now being maintained. However, it was found that the Page 51
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APPENDIX 4 Moray Council Internal Audit Section 5 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation Procurement Guidelines. In addition, appropriate stock control records should be maintained of sporting clothing and equipment held for resale. Date 30/06/2025) Service is still in the process of agreeing to a revised contractual agreement for the supply of sporting equipment and clothing for resale. A revised implementation date of 30/06/2025 has been agreed with the Service. Page 52
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APPENDIX 5 Moray Council Internal Audit Section 1 DEPARTMENT: Economy, Environment & Finance SUBJECT: Building Services – Planned Maintenance REPORT REF: 23'017 Follow Up Audit Review Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation Key Control: Planned maintenance works are managed in accordance with contract, procurement and financial regulations. 5.01 A review should be undertaken of the revised working time arrangements for craft and manual officers agreed at a meeting of the Communities Medium Yes 30/09/2023 (Revised Implementation Part Implemented – Further to consultation with officers and unions in 2023, it was agreed to continue with current working time shift patterns. However, no approval was obtained Page 53
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APPENDIX 5 Moray Council Internal Audit Section 2 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation Committee on 22 October 2013 (para. 21 of the minute refers). If the benefits of these changes to core hours and shift patterns remain, an agreement should be sought to continue with current arrangements. Date 30/09/2025) from committee to continue with these revised arrangements. The Building Services Manager has indicated that he intends to undertake another consultation exercise with officers and the unions regarding working time arrangements. The results of this exercise will be reported to committee. A revised implementation date of 30/09/2025 has been agreed with the Service. 5.02 Consideration should also be given in developing performance targets for the time taken to complete works from comparisons or benchmarking with the private sector. Medium Yes 31/03/2024 (Revised Implementation Date 30/06/2025) Outstanding – Discussion with the Building Services Manager noted that contracts for the Housing Investment Programme 2024/25 relating to housing energy efficiency improvements regarding heating, kitchens, bathrooms, and insulation works have been awarded by area to external contractors, but Page 54
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APPENDIX 5 Moray Council Internal Audit Section 3 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation also to Building Services. It is intended to use the charges for the work done by the external contractors to benchmark against costs within Building Services. Benchmarking in relation to other works will also be conducted separately. A revised implementation date of 30/06/2025 has been agreed with the Service. 5.03 A review should be undertaken of the rates used and accounting arrangements for determining budgets and recovery of costs of planned maintenance works. Medium Yes 31/03/2024 (Revised Implementation Date 31/03/2026) Outstanding – As noted in the review of the reactive repairs audit, an exercise was undertaken to determine individual costs and overhead recovery rates several years ago. The Building Services Manager stated that the annual percentage increase in rates is uplifted every year after consultation with Property and Housing Services, with consideration also given to the Building Cost Information Service (BCIS) Page 55
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APPENDIX 5 Moray Council Internal Audit Section 4 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation indices. It is appreciated that a review of costings and overhead recovery rates for all works will be a significant exercise that may also require the assistance of other services. The Building Services Manager has detailed a revised implementation date of 31/03/2026. 5.04 Procedures should be developed to allow the recording and monitoring of the metal collected for recycling. Low Yes 31/05/2023 Implemented - Procedures are now in place detailing arrangements for recording and monitoring scrap metal collected for recycling. 5.05 Officers should be reminded of the Council’s Retention Schedule to ensure all have a clear understanding of the time periods regarding the retention of records. Medium Yes 30/06/2023 Implemented –Officers involved in the storage of records have been reminded of the need to comply with retention schedules and notices detailing retention time periods have been affixed to filing cabinets holding historic records. Page 56
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APPENDIX 5 Moray Council Internal Audit Section 5 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation 5.06 Officer timesheets should be amended to allow any overtime undertaken to be recorded against a specific job number. In accordance with agreed operating arrangements, officers’ timesheets must be authorised by a supervisor and a co-ordinator. Medium Medium Yes Yes 31/03/2023 31/03/2023 Implemented – Timesheets have now been amended to allow overtime against specific job numbers to be recorded. Implemented - Sample testing was carried out and it was found that time sheets were being correctly authorised by supervisors. 5.07 The use of C-track system should be investigated as an aid to allow the monitoring of officers timesheets of the working time charged to jobs. Medium Yes 31/03/2023 Implemented – Periodic and exception based reviews are now being undertaken by management to review information held on C- track to officers timesheets. It was further noted that Safe Driver training had been provided to 82% of drivers within Building Service; this has included highlighting the requirement to utilise the C-track system in accordance with detailed Page 57
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APPENDIX 5 Moray Council Internal Audit Section 6 Risk Ratings for Recommendations High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. No. Audit Recommendation Priority Accepted (Yes/ No) Date of Completion Status / Explanation procedures. Training will be provided to remaining drivers within Building Services by 31 March 2025. 5.08 All Clerk of Works Instructions should be recorded detailing the requirement for any additional work needed within planned works. Medium Yes 30/06/2023 Implemented - Sample testing confirmed that additional works carried out for planned works were supported by Clerk of Works Instructions. 5.09 Contracts should be agreed with companies used regularly for the supply of goods and materials where annual expenditure exceeds the Quick Quote threshold of £5000. Medium Yes 31/03/2024 Implemented. Testing undertaken has confirmed that the Service now uses national frameworks or local contacts to purchase goods and services where cumulative expenditure to a supplier is in excess of £5,000. The Service is also reviewing on an ongoing basis all payments made to off-contract suppliers to determine whether there is a need for a more formal contractual relationship. Page 58
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APPENDIX 5 Moray Council Internal Audit Section 7 Page 59
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Report to: Audit and Scrutiny Committee Meeting Date: 7 May 2025 Report by: Audit and Risk Manager Report No: GSP006/25/DL Author: Dafydd Lewis Contact Email: dafydd.lewis@moray.gov.uk Subject: Internal Audit Review – Special Investigation - Building Services - Windows Replacement Programme 1. PURPOSE ☒ For Decision ☐ For Information 1.1 The report advises Committee on an internal audit review completed for the period from 12 February 2025 to 7 May 2025. 1.2 This report is submitted to Committee in terms of Section III (I) (2) and (8) of the Council’s Scheme of Administration relating to consideration of reports from the Council’s Internal Auditor and monitoring delivery of the audit service through receipt of quarterly reports on work carried out by Internal Audit. 2. SUMMARY 2.1 This report provides details of the internal audit review completed of a Special Investigation - Building Services - Windows Replacement Programme during the period from 12 February 2025 to 7 May 2025. 3. RECOMMENDATIONS 3.1 It is recommended that Committee: i) Considers the contents of this report, seeks clarification on any points noted, and endorses the recommendations contained within the report. Dafydd Lewis Audit and Risk Manager 4. BACKGROUND AND CONTEXT Item 6. Page 61
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4.1 A review of a contract for a window replacement programme for properties at Carnie Place, Buckie has been undertaken. The Head of Housing and Property Services requested the audit after concern had been raised by an Elected Member that windows had been purchased for a housing estate that could not be installed. 4.2 Building Services awarded a contract in 2021 for manufacturing replacement windows for 101 properties, which included 1 house and 16 flats at Carnie Place, Buckie, to a value of £40,412. A total of 96 replacement windows were manufactured for the properties at Carnie Place and delivered to Building Services in 2022. However, it was found that on the installation of the replacement windows, they could not be fitted as the dimensions of the windows manufactured were greater than the rough openings at the properties. The audit report on Appendix 1 details the findings and recommendations from a review undertaken of the contract. 5. PROPOSALS 5.1 This report provides Committee with a summary of findings arising from an audit project completed during the review period. 6. SUMMARY OF IMPLICATIONS 6.1 The table below shows whether risks and implications apply if the recommendations are agreed: SUBJECT YES NO Corporate Plan and 10 Year Plan (Local Outcome Improvement Plan) × Policy and Legal × Financial × Risk × Staffing × Best Value and Transformation × Property × Information Communications Technology/Digital × Equalities. Social Inclusion and Economic Impact × Climate Change, Biodiversity and Sustainability × 6.2 Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Improved Collaborative Leadership, as part of continuous improvement through Best Value, will better enable the Council to fulfil the ambitions set out in its strategic plans. a) Links to Council Corporate Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities: ☐ Tackle Poverty and Inequality. ☐ Build Stronger Greener Vibrant Economy. ☐ Build Thriving, resilient, empowered Communities. Page 62
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b) Links to Local Outcomes Improvement Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following local Outcomes Improvement Plan priorities: ☐ Developing a diverse, inclusive, and sustainable economy ☐ Building a better future for our children and young people in Moray. ☐ Empowering and connecting communities. ☐ Improving wellbeing of our population 6.3 Policy and Legal No implications directly arising from this report. 6.4 Financial No implications directly arising from this report. One off Costs: Service Area Budget Budget Years Proposed Spend this Year Virement From Other Comments Annually Recurring Costs: Service Area Budget With Effect From Annual Net Impact Virement From (if applicable) Other Comments 6.5 Risk The independent review of selected systems and procedures mitigates the risks associated with inadequate or ineffective control procedures. 6.6 Staffing No implications directly arising from this report. 6.7 Best Value and Transformation Internal audit work supports good governance and the delivery of efficient services. 6.8 Property No implications directly arising from this report. 6.9 Information Communications/Technology/Digital No implications directly arising from this report. 6.10 Equalities, Social Inclusion and Economic Impact No implications directly arising from this report. 6.11 Climate Change and Biodiversity Impacts No implications directly arising from this report. Page 63
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7. CONSULTATION 7.1 There have been no direct consultations during the preparation of this report. 8. BACKGROUND PAPERS 8.1 None Page 64
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APPENDIX 1 1 Final Internal Audit Report Special Investigation- Building Services- Windows Replacement Programme March 2025 Distribution: Head of Housing and Property Services Building Services Manager The Internal Audit Section provides Management with an opinion on the internal control environment and also categories risk ratings for recommendations as high, medium or low (detailed explanation provided in Appendix1). The audit recommendations for this review have been classified as follows Assurance Level Risk Ratings for Recommendations Priority 1 1 Limited Priority 2 2 Priority 3 0 Confidentiality and Disclosure Clause This report (“Report”) was prepared by the Internal Audit Section of Moray Council. The matters raised in this Report are only those which came to our attention during our internal audit work. Whilst every care has been taken to ensure that the information provided in this Report is as accurate as possible, the Moray Council Internal Audit Section has only been able to base findings on the information and documentation provided and consequently, no complete guarantee can be given that this Report is necessarily a comprehensive statement of all the weaknesses that exist, or of all the improvements that may be required. This Report was prepared solely for the use and benefit of the Moray Council, Moray Integration Joint Board or the Grampian Valuation Joint Board. Moray Council's Internal Audit Section accepts no responsibility and disclaims all liability to any third party who purports to use or rely for any reason whatsoever on the Report, its contents, conclusions, any extract, reinterpretation, amendment and/or modification. Accordingly, any reliance placed on the Report, its contents, conclusions, any extract, reinterpretation, amendment and/or modification by any third party is entirely at their own risk. Please refer to the Statement of Responsibility in Appendix 2 of this report for further information about responsibilities, limitations and confidentiality. Page 65
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Appendix 1 2 Contents Page Special Investigation- Building Services- Windows Replacement Programme 1. Introduction & Scope 3 2. Key Issues 3-4 Detailed Report 3. Findings/Recommendations 5-13 4. Management Response 10-14 Appendices 1. Audit Terms of Reference and Definitions 2. Statement of Responsibility Page 66
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Appendix 1 3 1. Introduction and Audit Scope The Head of Housing and Property Services, after consulting with the Corporate/ Senior Management Team, requested a review of a contract for a window replacement programme for properties at Carnie Place, Buckie. This was due to concern raised by an Elected Member in October 2024 that “large quantities of ill-fitting windows” had been purchased for a housing estate that could not be installed. A contract for the manufacture of windows of 765 windows for 101 properties in Dufftown, Rothes, Cullen, Raffan and Buckie was awarded by Building Services in 2021. The contract was for a total tender value of £297,174.00 and included the manufacture of 96 windows for 1 house and 16 flats at Carnie Place, Buckie, for £ 40,412. The contract was for the manufacture of windows, while the installation was awarded to another contractor. As part of the contract tender documents, Property Services undertook external sizing measurements for the windows, but a condition of the contract required the window manufacturer to carry out onsite dimensional surveys to ensure the new windows fitted the external wall openings. Property Services provided sizing measurements for the windows to allow cost comparisons between manufacturers as part of the tender evaluation. The contract conditions also allowed for an intrusive survey to be done if required at the properties to determine the actual sizing for manufacturing the windows. The audit scope was to check the contract for manufacturing replacement windows for properties at Carnie Place. This involved discussions with officers, review of documentation, emails, and minutes of meetings in the administration of this contract. The audit also undertook a physical inspection with the support of an officer in Property Services to confirm the stock of windows stored by Building Services. The audit was carried out in accordance with Public Sector Internal Audit Standards (PSIAS). 2. Key Issues • The audit noted that most of the 765 replacement windows manufactured for the 101 properties in Dufftown, Rothes, Cullen, Raffan and Buckie have been successfully installed. However, the 96 windows manufactured as part of the contract for Carnie Place, Buckie cannot be fitted to the properties. This is because the size dimensions of the windows manufactured are greater than the rough openings to allow installation without structural changes to the Page 67
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Appendix 1 4 properties at a significant cost. Enquiries with officers from Property and Building Services found that the rough openings for the windows at the properties are greater when measured externally than the internal sizing. This feature of the properties at Carnie Place was not known in preparation of the tender contract documents by either Property or Building Services. However, a requirement of the contract was for the supplier (manufacturer) to undertake a dimensional survey by qualified officers of the windows at the properties. A site visit was undertaken in January 2022 at Carnie Place by the Manufacturer awarded the contract; also in attendance was the Clerk of Works Design from Property Services. An external survey was undertaken, but the Clerk of Works Design only noted the house was entered to check the internal dimensions of the window openings. After the site visit, the Manufacturer emailed the Contract Manager (Building Services) to highlight that the window openings for the properties were “tighter than outside reveals”. The Contracts Manager noted the proposed action that internal plaster boards could be “chipped away” to allow installation of the windows. The windows were then manufactured within a 5mm tolerance, except for 11 windows to the original specification of the tender contract documentation and delivered to Building Services premises in April 2022. Concern was initially raised by a contractor attempting to install the replacement windows of a sizing issue in April 2022. Further investigation by Building Services found that the replacement window frames manufactured had a greater dimensional sizing of between 20 mm to 100mm to fit the rough openings for the windows at the properties. Due to this variance, and as the internal wall was solid block and plaster, it could not be “chipped away”. Installation of the replacement windows would need structural changes to the properties, which would not be a cost-effective option and would result in significant disruption to the tenants. • The issue concerning purchasing “ill-fitting” windows was raised with the Head of Property and Housing by an Elected Member in October 2024. However, concern regarding the sizing of the windows manufactured for Carnie Place was known in April 2022. The replacement windows have been stored at a Building Services premises but have not been recorded within the Building Services Stores System as they were ordered for a specific contract. Improved accounting arrangements should be introduced for all contract items and materials to ensure any unused or surplus materials are reviewed by senior management. A decision should be undertaken about the future use of the replacement windows purchased for Carnie Place, Buckie, in accordance with Financial Regulations. Page 68
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Appendix 1 5 Special Investigation- Building Services- Windows Replacement Programme- 2024/25 Ref Risk Ratings for Recommendations Audit Finding Audit Recommendation 1. High A review was undertaken regarding the purchase of replacement windows for 17 properties at Carnie Place, Buckie. The following points were noted: 1.1 The purchase of windows for Carnie Place, Buckie was part of a more extensive windows replacement programme in 2019 for 101 properties in Dufftown, Rothes, Cullen, Rathan and Buckie. The contract documents between the Housing Service and Building Services included measurements of the windows' external dimensions (width x height). Enquiries noted this was from an external survey by Property Services for tender costing purposes and undertaken before the lifting of Covid restrictions. The contract documentation detailed in Clause 3, General that Building Services should: “Prior to ordering of the respective timber windows, the Contractor is to determine, by site dimensional survey of each window, that the new window will occupy the full external opening and that the openings are suitable or fully modified to suit the window installation proposed” The audit considers that a more detailed survey of the properties at Carnie Place, Buckie would have highlighted a need to amend the initial external dimensions measurements for the windows provided by Property Services. A review of procedures should be undertaken regarding the checks required to confirm compliance with conditions and accuracy of specifications, including measurements for future contracts. Page 69
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Appendix 1 6 1.2 In addition, the contract also allowed for “an intrusive survey to establish, e.g., the cover at jambs and soffits, or if existing openings require to be modified in any way.” It was found this was not undertaken, and the tender contract documents provided to the manufacturers to price were the external dimension measurements for the windows undertaken by Property Services. 1.3 Building Services separated the tendering process for the supply and installation of the windows replacement programme. The tenderers for manufacturing the windows were informed of “approximate dimensions” within the contract documentation. Building Services awarded the contract for the supply of windows for 101 properties in July 2021 for £297,174.00. This included the 17 properties (1 house & 16 flats) at Carnie Place, Buckie for 96 windows valued at £40,412. The contract awarded detailed the following specification requirements: “Prior to manufacture of the respective timber windows, the Supplier is to determine, by site dimensional survey of each window, that the new window will fit into the external wall opening rebate and that the openings are suitable or fully modified to suit the window installation proposed. Page 70
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Appendix 1 7 If the minimum 12mm at the head & 12.5mm at the jamb cover is not achievable at the external window opening rebate then agreement on how to proceed should be made prior to the manufacture of the windows.” 1.4 In addition to the previous contract specifications, there was a condition for the Manufacturer to undertake a site survey, a requirement also included “staff involved in the site survey should be suitably qualified and experienced (i.e. time-served or former tradesmen technically proficient in measurement for replacement windows) taking care to establish the height and width of openings and the rebate depth at head and jambs…”. 1.5 A site visit was undertaken at Carnie Place, Buckie in January 2022 by the Manufacturer. In addition, the Clerk of Works Design (Property Services) was also present. An email on 17 May 22 from the Manufacturer to the Contracts Manager within Building Services detailed that “inside reveals at Cairnie Place are tighter than outside reveals”. The window manufacturer also stated that as “agreed on site” with the Clerk of Works Design “that inside plaster board would be chipped away”. The response from Page 71
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Appendix 1 8 the Contracts Manager was “noted”. 1.6 The Contracts Manager within Building Services is no longer employed by the Council. However, a discussion has been held with the Clerk of Works Design. The officer stated that he had verbally raised his concerns regarding the sizing of the windows for Carnie Place, Buckie with the Contracts Manager and suggested that a window installer should undertake a survey before ordering the windows. The site visit with the Manufacturer in January 2022 involved an external check of the properties, but the Clerk of Works Design only noted the Manufacturer entering the house within Carnie Place to undertake an internal survey. 1.7 The windows were then manufactured within a 5mm tolerance, except for 11 windows, according to the original specification from Property Services within the tender contract documentation and delivered to Building Services premises in April 2022. The Contractor installing the windows at Carnie Place informed Building Services of an issue with sizing in April 2022. Further investigation by Building Services found that the manufactured window frames for the flats had a greater dimensional sizing of between 20 mm to 75 mm to the rough openings. Page 72
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Appendix 1 9 However, 3 windows for the flats and 8 windows for the house at Carnie Place were manufactured to a different size to the original specification detailed within the tender contract documentation. A recent survey undertaken by Building Services of the house noted variances between the manufactured window frames to the rough openings of between 20mm to 100mm. 1.8 It was also found that the internal rough openings for the windows at the properties were less than the external dimensions. The audit has been advised this is unusual, and as the internal wall was solid block and plaster, it could not be “chipped away”. Installation of the replacement windows would need structural changes to the properties, which would not be a cost effective option. 1.9 The 96 replacement windows for Carnie Place, Buckie have until recently been stored at a Building Services premises in Keith since 2022. The minutes of the Housing Maintenance Partnership Contract Meetings involving officers from Property and Building Services noted the issue concerning the replacement windows programme for Carnie Place, Buckie was discussed from August 2023. Page 73
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Appendix 1 10 Management Response Responsible Officer Accepted (Yes/ No) Timescale for Implementation (Date Required) Agreed Management Action/Management Comment Head of Housing and Property Services/ Building Services Manager Yes 30/09/2025 A review of Property and Building Services operating arrangements will be undertaken to identify any improvements needed to current practices in preparing tender specifications and checks to ensure compliance with contract conditions. Updated procedures have now been introduced that require additional sample checking to be undertaken by Building Services officers prior to approval being given for a supplier to manufacture windows. Page 74
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Appendix 1 11 Ref Risk Ratings for Recommendations Audit Finding Audit Recommendation 2. Medium It was noted that the replacement windows for Carnie Place, Buckie had been stored until recently at a Building Services premises in Keith since 2022. As the windows had been ordered for a contract, they were not recorded as stock within the Stores System. Materials/items purchased for a contract can sometimes be stored within a Building Services premises, but this should only be for a short period to allow the practical completion of the works. Audit testing as part of this review undertook a physical check to confirm the replacement windows purchased for Carnie Place, Buckie were the same as those stored at the Building Services premises. This was confirmed. However, it was found that in addition to the purchased windows, 51 windows intended for another 6 properties were also present. Enquiries found these windows related to properties with planned installation dates before 2023. Discussions with Building Services officers noted that these windows were not installed because tenants refused access to the properties. However, further investigation and discussions are now being undertaken to allow the fitting of these windows at the properties. A full inventory check of the contract materials held within Building Services premises should be undertaken, including the dates ordered and intended contracts. This information should then be provided to the Head of Housing and Property Services for review and to authorise in accordance with Financial Regulation if alternative use, sale or disposal is required. Consideration should also be given to investigating whether the Stores Management System could be further used to account for materials/items purchased for contract purposes. Alternatively, a 6 monthly stock take should be undertaken of the materials/items held for contracts with the dates purchased and the intended works programme. This should then be reviewed by the Building Services Manager. Page 75
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Appendix 1 12 Management Response Responsible Officer Accepted (Yes/ No) Timescale for Implementation (Date Required) Agreed Management Action/Management Comment Building Services Manager Yes Yes 30/04/2025 31/10/2025 A full inventory check of contract materials held within all Building Services premises will be undertaken and provided to the Head of Housing and Property Services. The Building Services Stores Management System will be used to purchase and record all future contract materials. Regular 6 monthly stock takes will be undertaken for contract materials. This will be periodically reviewed by the Building Services Manager. Storage arrangements for contact materials are also being reviewed, with the intention of making greater use of direct orders from suppliers. Page 76
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Appendix 1 13 Ref Risk Ratings for Recommendations Audit Finding Audit Recommendation 3. Medium As detailed in the previous finding, the audit undertook a physical check to confirm the stock of 96 replacement windows held for Carnie Place, Buckie until recently at the Building Services premises in Keith since 2022. The following points were also noted: • The audit confirmed the 96 replacement windows held in storage by Building Services. However, from the survey undertaken by the Manufacturer in January 2022 for the house within the replacement windows programme at Carnie Place, 8 windows had been manufactured to different dimension measurements from the information provided by Property Services as part of the tender contract documentation. The Manufacturer had not detailed these size changes to Building Services. • A variance was found between the actual sizing of the windows manufactured and the dimension measurements detailed within the tender contract documentation of 3 windows for the flats at Carnie Place. Improved checking arrangements should be undertaken by officers to verify materials or items purchased are in accordance with the agreed specification. Officers should be reminded to check deliveries on receipt against the purchase order to verify accuracy and allow for any issues to be raised with the supplier/manufacturer in accordance with the terms and conditions of the contract. Page 77
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Appendix 1 14 Management Response Responsible Officer Accepted (Yes/ No) Timescale for Implementation (Date Required) Agreed Management Action/Management Comment Building Services Manager Yes Implemented Improved procedures are now in place to ensure the accurate checking of deliveries on receipt against the purchase order and to verify the accuracy and condition of goods received. Any issues will be raised with the supplier/manufacturer and payment of invoices will be held until they are resolved. Page 78
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Appendix 1 15 Appendix 1 AUDIT TERMS OF REFERENCE AND DEFINITIONS 1. Audit Objectives 1.1 The overall audit objective is to provide an objective independent opinion on the adequacy and effectiveness of controls / processes. 1.2 The audit will for each controls / process being considered: • Walkthrough the processes to consider the key controls; • Conduct sample testing of the identified key controls, and • Report on these accordingly 1.3 All audit reviews are carried out in accordance with Public Sector Internal Audit Standards (PSIAS). 2. Definitions for Auditing Opinions and Findings 2.1 In order to assist management in using our reports: The Internal Auditor will categorise audit assurance opinion according to their overall assessment of the risk management system, effectiveness of the controls in place and the level of compliance with these controls and the action being taken to remedy significant findings or weaknesses. Assurance Level System and Testing Conclusion Full The controls tested are being consistently applied Substantial There is evidence that the level of noncompliance with some of the controls may put some of the system objectives at risk. Limited The level of non compliance puts the system objectives at risk. None Significant non-compliance with basic controls leaves the system open to error or abuse. 2.2 Risk ratings for each recommendation is based on the following criteria: High Fundamental control weaknesses that require immediate attention by management to action and mitigate significant exposure to risk Medium Less critically important controls absent, not being operated as designed or could be improved Low Lower level controls absent, not being operated as designed or could be improved. Page 79
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Appendix 1 16 Appendix 2 STATEMENT OF RESPONSIBILITY The responsibility for designing and maintaining a sound system of internal control to prevent and detect fraud and other irregularities rests with management, with internal audit providing a service to management to support them to achieve this objective. The Internal Audit Section will assess the adequacy and effectiveness of the system of internal control arrangements implemented by management and perform sample testing on those controls in the period under review with a view to providing an opinion on the extent to which risks in this area are managed. The Internal Audit Section will undertake testing with the objective of detecting significant control weaknesses. However, the audit approach alone should not be relied upon to identify all strengths and weaknesses in internal controls nor to find any fraud or irregularity. Even sound systems of internal control can only provide reasonable and not absolute assurance and may not be proof against collusive fraud. The matters raised in this report are only those that came to our attention during the course of the audit review and are not necessarily a comprehensive statement of all the weaknesses that exist or all improvements that might be made. Recommendations for improvements should be assessed by management for their full impact before they are implemented. The performance of the audit review undertaken should not be taken as a substitute for management’s responsibilities for the application of sound management practices. This report is confidential and must not be disclosed to any third party or reproduced in whole or in part without the written consent of the Moray Council’s Audit and Risk Manager. Page 80
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Report to: Audit and Scrutiny Committee Meeting Date: 7 May 2025 Report by: Audit and Risk Manager Report No: GSP005/25/DL Author: Dafydd Lewis Contact Email: dafydd.lewis@moray.gov.uk Subject: The National Fraud Initiative in Scotland 1. PURPOSE ☒ For Decision ☐ For Information 1.1 To provide Committee with information on the Council’s approach to participation in the National Fraud Initiative (NFI). 1.2 This report is submitted to Committee in terms of Section III (I) (5) of the Council’s Scheme of Administration relating to considering reports from the Council’s Internal Auditor. 2. SUMMARY 2.1 The National Fraud Initiative (NFI) is a data-matching project conducted by the Cabinet Office on behalf of Audit Scotland every two years. It involves a data-matching exercise using information from various Council systems, as well as data provided by other councils and organisations. Public bodies, including local authorities, are mandatory participants in this process. The 2024/25 NFI exercise has begun, and the agreed approach is for services to review and document the reasons for data matches, while the Internal Audit Section investigates potential fraud, monitors progress, and reports on the outcome. 2.2 This report details the NFI self-appraisal checklist that has been completed as part of the planning process for the 2024/25 data matching exercise. 3. RECOMMENDATIONS 3.1 It is recommended that Committee: i) Considers and endorses the Audit Scotland self-appraisal checklists that participating bodies are invited to complete and present to their local audit committees. Item 7. Page 81
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Dafydd Lewis Audit and Risk Manager 4. BACKGROUND AND CONTEXT 4.1 In August 2024, Audit Scotland published a report titled “The National Fraud Initiative Scotland 2024” (link). This report detailed the success of the NFI exercise within the public sector in mitigating fraud and error. It states that in 2022/23, 110 public sector bodies in Scotland participated in the NFI exercise, identifying £21.5 million in savings due to fraud, overpayment, and error. However, previous data-matching exercises in Moray have not uncovered fraud; instead, they have revealed timing differences or outdated information. For example, if an individual changes jobs or addresses around the time the data is submitted for matching, both old and new information may appear as a match but can be quickly discounted upon review 4.2 The National Fraud Initiative in Scotland 2024 report includes a recommendation for the Council to complete an "NFI self-appraisal checklist as part of planning for the 2024/25 exercise." These self-appraisal checklists have now been reviewed and completed by the Audit and Risk Manager and are provided as Appendix 1. It is pleasing to report that, based on the overview undertaken, the Council is essentially meeting Audit Scotland’s requirements, with no immediate actions required. 4.3 Participation in the National Fraud Initiative supports the Council’s anti-fraud and corruption arrangements. At the conclusion of the data-matching exercise, the findings will be reported to this Committee by the Audit and Risk Manager. 5. PROPOSALS 5.1 The Committee is asked to note Audit Scotland's requirement for participants in the National Fraud Initiative to complete a self-assessment checklist provided with this report. 6. SUMMARY OF IMPLICATIONS 6.1 The table below shows whether risks and implications apply if the recommendations are agreed: SUBJECT YES NO Corporate Plan and 10 Year Plan (Local Outcome Improvement Plan) × Policy and Legal × Financial × Risk × Staffing × Best Value and Transformation × Property × Information Communications Technology/Digital × Equalities. Social Inclusion and Economic Impact × Climate Change, Biodiversity and Sustainability × Page 82
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6.2 Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Improved Collaborative Leadership, as part of continuous improvement through Best Value, will better enable the Council to fulfil the ambitions set out in its strategic plans. a) Links to Council Corporate Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities: ☐ Tackle Poverty and Inequality. ☐ Build Stronger Greener Vibrant Economy. ☐ Build Thriving, resilient, empowered Communities. b) Links to Local Outcomes Improvement Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following local Outcomes Improvement Plan priorities: ☐ Developing a diverse, inclusive, and sustainable economy ☐ Building a better future for our children and young people in Moray. ☐ Empowering and connecting communities. ☐ Improving wellbeing of our population 6.3 Policy and Legal No implications directly arising from this report. 6.4 Financial No implications directly arise from this report; however, there are benefits where correction of errors results in additional funding for the Council, and additionally, assurances are obtained on the robustness of our systems. One off Costs: Service Area Budget Budget Years Proposed Spend this Year Virement From Other Comments Annually Recurring Costs: Service Area Budget With Effect From Annual Net Impact Virement From (if applicable) Other Comments 6.5 Risk The risk of not participating is that fraud or error occurs and is allowed to continue unchecked 6.6 Staffing No implications directly arise from this report; however, staff time is required in the administration and investigation of matches from participation in the NFI exercise. 6.7 Best Value and Transformation Internal audit work supports good governance and the delivery of efficient services. Page 83
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6.8 Property No implications directly arising from this report. 6.9 Information Communications/Technology/Digital No implications directly arising from this report. 6.10 Equalities, Social Inclusion and Economic Impact No implications directly arising from this report. 6.11 Climate Change and Biodiversity Impacts No implications directly arising from this report. 7. CONSULTATION 7.1 The Chief Financial Officer as the NFI Senior Responsible Officer has been consulted with the content of this report. 8. BACKGROUND PAPERS 8.1 None Page 84
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APPENDIX 1 Audit Scotland National Fraud Initiative- Self-appraisal checklists Part A: For those charged with governance Yes/No/Partly Is action required? Who by and when? Leadership, commitment and communication 1. Are we aware of emerging fraud risks and taken appropriate preventative and detective action? Yes Irregularities reported by the Accounts Commission, Audit Scotland, and the Scottish Local Authority Investigators' Group are reviewed by the Internal Audit Section. Points of concern will be raised with senior management. A counter-fraud review is included in the 2025/26 Audit Plan. The scope of the audit and testing undertaken will be informed by fraud reported within other organisations. No N/A 2. Are we committed to NFI? Has the council/board, audit committee and senior management expressed support for the exercise and has this been communicated to relevant staff? Yes The Chief Financial Officer is the delegated NFI Senior Responsible Officer, while the Audit and Risk Manager is the Key Contact Officer. Individual officers within services are responsible for progressing and investigating matches within their remit (e.g., Payroll, Creditors). Internal Audit will investigate any fraud and monitor progress. The Audit and Risk Manager will report the outcome of the No N/A Page 85
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APPENDIX 1 data-matching exercise to a future Audit and Scrutiny Committee. 3. Is the NFI an integral part of our corporate policies and strategies for preventing and detecting fraud and error. And do we make reference to NFI in our governance codes and statements? Yes NFI is referred to and forms part of the Council’s Policy to Combat Fraud, Theft, Bribery, and Corruption. This Policy was reported to the Corporate Committee on 30 January 2024. Reference is also made to the Council’s participation in the NFI data-matching exercise within the counter fraud section of the Internal Audit Annual Report. No N/A 4. Does our Key Contact have sufficient authority and time to ensure that NFI is delivered effectively? Yes The Chief Financial Officer is the delegated NFI Senior Responsible Officer, while the Audit and Risk Manager serves as the Key Contact Officer. Internal Audit officers maintain regular contact with service representatives to monitor progress. No N/A 5. Has the approach to follow up of different NFI match types been clearly set out and reported as part of the bodies NFI planning process? Yes As reported to the Audit and Scrutiny Committee on 12 February 2025, the agreed approach requires services to review a sample of each data set and document the reasons for the matches. The Internal Audit Section will then investigate any potential fraud, monitor progress, and report to the Audit and Scrutiny Committee on the outcomes and any other administrative requirements related to the Council’s participation in the NF No N/A 6. Are NFI progress and outcomes reported regularly to senior management and elected/board members (e.g., the audit Yes As in previous NFI exercises, the outcome of the review of matches will be Yes The outcome of investigating NFI matches will be reported to a future Audit and Scrutiny Page 86
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APPENDIX 1 committee or equivalent)? reported to the Audit and Scrutiny Committee. Committee. 7. Where we have not submitted data or used the matches returned to us (e.g. council tax single person discounts), are we satisfied that alternative fraud detection arrangements are in place and that we know how successful they are? Yes All data submission requests have been fulfilled. However, the Council has decided to use Datatank to validate single-person discount claims. (Datatank is a private company specialising in data analytics solutions and managed services to support Local Authority revenue and benefits fraud detection. The Taxation Service will monitor the results from Datatank's use). No N/A 8. Does internal audit, or equivalent, monitor our approach to NFI and our main outcomes, ensuring that any weaknesses are addressed in relevant cases? Yes The Audit and Risk Manager is the key contact officer overseeing the matching process. No N/A 9. Do we review how frauds and errors arose and use this information to improve our internal controls? Yes When an investigation identifies control weaknesses, recommendations are made to management to reduce the risk of the error recurring in the future No N/A 10.Do we need and have access to fraud investigation officers to enable frauds to be followed up fully? No The Council no longer employs a dedicated Fraud Investigation Officer. Any fraud investigations will be conducted by the Internal Audit Section. No N/A 11. Do we publish, as a deterrent, internally and externally the achievements of our fraud investigators (eg, successful prosecutions)? No Previous investigation of data matches has related to errors or issues that require corrective actions as opposed to fraud that would merit formal prosecution. No N/A Page 87
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APPENDIX 1 Part B: For NFI Key Contacts and users Yes/No/Partly Is action required? Who by and when? Planning and preparation 1. Are we aware of emerging fraud risks and taken appropriate preventative and detective action? Yes Fraud and irregularities reported by the Accounts Commission, Audit Scotland, and the Scottish Local Authority Investigators' Group are reviewed by the Internal Audit Section. These reports are then used to identify projects for review within the annual counter-fraud review or as separate projects in the Annual Audit Plan. No N/A 2. Are we investing sufficient resources in the NFI exercise? Yes Services undertake the investigation of matches. Internal Audit will oversee the process and report on the outcomes. No N/A 3. Do we plan properly for NFI exercises, both before submitting data and prior to matches becoming available? This includes considering the quality of data and being clear about the approach to follow up of different match types. Yes The Internal Audit Section coordinates the NFI data matching exercise. Guidance on information and deadlines for uploading data is provided to Services and the ICT Section. The quality of data is continuously assessed throughout the processing of each dataset. No N/A 4. Where NFI outcomes have been low in the past, do we recognise that this may not be the case the next time, that NFI can deter fraud and that there is value in the assurances that we can take from low outcomes? Yes The review of findings from an investigation into matches for the 2022/23 NFI data- matching exercise found no instances of fraud. Moving forward, the sampling process for future data- matching exercises No N/A Page 88
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APPENDIX 1 will be continued and refined to ensure the most effective use of staff resources, based on the findings from past investigations. Participation in the NFI exercise supports the Council’s counter- fraud arrangements 5. Do we confirm promptly (using the online facility on the secure website) that we have met the fair processing notice requirements? Yes No N/A 6. Do we plan to provide all NFI data on time using the secure data file upload facility properly? Yes NFI data uploaded in accordance with timetable. No N/A Effective follow-up of matches 7. Do all departments involved in NFI start the follow-up of matches promptly after they become available? Yes The need to investigate matches promptly must be balanced with the operational demands of the service. No N/A 8. Do we give priority to following up high-risk matches, those that become quickly out-of-date and those that could cause reputational damage if a fraud is not stopped quickly? Yes A proportionate approach has been agreed upon for investigating data matches on a sample basis in 'high-risk' categories to determine whether further testing is required. No N/A 9. Are we investigating the circumstances of matches adequately before reaching a ‘no issue’ outcome, in particular? Yes Services investigate matches to determine whether any further action is required. No N/A 10. Are we drawing appropriately (in health bodies) on the help and expertise available from NHS Scotland Counter Fraud Service? N/A 11. Are we taking appropriate action in cases where fraud is alleged (whether disciplinary action, penalties/cautions or reporting to the Procurator Fiscal)? Are we recovering funds effectively? Yes When errors are identified that require the Council to recover funds, the necessary steps are taken. Any fraud identified will be investigated by the Internal Audit Section. No Future actions will depend on results from the investigations undertaken of data matches. 12. Do we deploy resources in proportion to risks, and scale down work on match reports where early work has not found any fraud or error? Yes The process of checking has been refined over successive NFI exercises to reflect the No A proportionate approach to checking will continue to ensure that resource inputs are optimised. Initially, the process will prioritise Page 89
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APPENDIX 1 risks apparent from sampled matches, with testing being sufficient to draw conclusions. reviewing the highest- risk or most productive matches for follow-up. 13. Where the number of high-risk matches is very low, are we adequately considering the medium and low-risk matches before we cease our follow-up work? Yes The all-matches report is for informational purposes only, focusing on specific matches involving individual datasets to be reviewed by services. The emphasis is on each service taking a proportionate approach to checking returned matches No N/A 14. Overall, are we deploying appropriate resources on managing the NFI exercise? Yes In the current financial climate and with the increased demands on services, the available staff resources to complete and manage the NFI data matching exercises are proving challenging No N/A Recording and reporting 15. Are we recording outcomes properly in the secure website and keeping it up to date? Yes Findings from investigating the data matches are recorded directly on the secure NFI website No N/A 16. Do staff use the online training modules and guidance on the secure website, and do they consult the Cabinet Office NFI team if they are unsure about how to record outcomes (to be encouraged)? Yes Contact is made with the Cabinet Office NFI team and Audit Scotland for further clarification as needed. No N/A 17. If, out of preference, we record some or all outcomes outside the secure website, have we made arrangements to inform Audit Scotland and the Cabinet Office NFI team about these outcomes? N/A To minimise data breaches, all results are recorded within the secure NFI website. No N/A Page 90
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Report to: Audit and Scrutiny Committee Meeting Date: 7 May 2025 Report by: Depute Chief Executive (Economy, Environment and Finance) Report No: FIN002/25/LP/LC Author: Lorraine Paisey Contact Email: lorraine.paisey@moray.gov.uk Subject: Annual Audit Plan for the Year Ending 31 March 2025 1. PURPOSE ☒ For Decision ☐ For Information 1.1 The purpose of this report is to inform the Committee of the External Auditor’s Annual Audit Plan for 2024/25. 1.2 This report is submitted to Committee in terms of Section III (I) (9) of the Council’s Scheme of Administration relating to considering reports produced by the Council’s External Auditor. 2. SUMMARY 2.1 The Annual Audit Plan sets out the risks which the External Auditor has identified during the audit planning process and sets out the approach which the External Auditor will take, including Wider Scope and Best Value issues. It highlights that the Council may be reclassified as requiring greater audit scrutiny if gross expenditure in the year exceeds £500 million. An Audit Risk Assessment underpins the report. 3. RECOMMENDATIONS 3.1 It is recommended that Committee: i) Scrutinises the Audit Risk Assessment; and ii) Considers and note the contents of the External Auditor’s Annual Plan for 2024/25. Lorraine Paisey Chief Financial Officer Item 8. Page 91
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4. BACKGROUND AND CONTEXT 4.1 In September 2022, the Accounts Commission confirmed the appointment of Grant Thornton as the external auditor for the Council for financial years 2022/23 to 2026/27 inclusive. 4.2 In delivering the public audit for Moray, Grant Thornton will provide independent assurance that public money has been spent appropriately and provides value. Audit work is carried out in accordance with International Standards on Auditing, the Code of Audit Practice and any other relevant guidance. 4.3 The audit includes consideration of Best Value as part of the Wider Scope audit. 4.4 Grant Thornton’s Annual Audit Plan (AAP) for 2024/25 is attached as Appendix 1 to this report. The Plan sets out the scope of the audit work and the auditor’s approach to the audit. The AAP is risk based and details the initial risks identified at the planning stage by Grant Thornton on pages 11 to 16. These will direct the focus of audit testing and the AAP sets out the planned work to be undertaken for the audit of the financial statements for the year ending 2024/25. 4.5 In order to assist with the assessment of risk, an Informing the Audit Risk Assessment was completed by senior managers and this is attached as Appendix 2. This Committee is asked by the Auditor to scrutinise the Audit Risk Assessment. 4.6 Page 50 of the AAP shows the baseline audit fee for 2024/25 as £305,550, which is an increase of 1.9% on the previous year. In the main this fee is set by Audit Scotland. In addition a fee of £7,190 is notified in respect of the audit of those Council trusts which are charities. Additional fees are identified as liable to be incurred but not yet quantifiable. If the Council’s gross expenditure exceeds £500 million the baseline audit fee will increase to reflect that additional work required. 4.7 The annual accounts timetable, including key deadlines are shown on page 46 of the AAP and includes the statutory requirement for the Council to submit the Unaudited Annual Accounts along with supporting working papers to Grant Thornton by 30 June 2024, following consideration by those charged with governance at the meeting of Moray Council on 25 June 2025. The Council will be asked to consider the Annual Audit Report and approve the Audited Annual Accounts at its meeting on 24 September 2025. 5. PROPOSALS 5.1 The Audit Plan will direct the work of the External Auditor. Any additional work required will be reported on as part of the Annual Audit Report. 6. SUMMARY OF IMPLICATIONS 6.1 The table below shows whether risks and implications apply if the recommendations are agreed: SUBJECT YES NO Corporate Plan and 10 Year Plan (Local Outcome Improvement Plan) √ Page 92
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Policy and Legal √ Financial √ Risk √ Staffing √ Best Value and Transformation Property √ Information Communications Technology/Digital Equalities. Social Inclusion and Economic Impact √ Climate Change and Biodiversity Impact √ 6.2 Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Improved Collaborative Leadership, as part of continuous improvement through Best Value, will better enable the Council to fulfil the ambitions set out in its strategic plans. a) Links to Council Corporate Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities: ☐ Tackle Poverty and Inequality. ☐ Build Stronger Greener Vibrant Economy. ☐ Build Thriving, resilient, empowered Communities. b) Links to Local Outcomes Improvement Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following local Outcomes Improvement Plan priorities: ☐ Developing a diverse, inclusive, and sustainable economy ☐ Building a better future for our children and young people in Moray. ☐ Empowering and connecting communities. ☐ Improving wellbeing of our population 6.3 Policy and Legal The external audit is conducted in terms of statutory powers afforded to the appointed External Auditor and in accordance with Grant Thornton’s Code of Practice. 6.4 Financial The baseline audit fee for 2024/25 is £305,550. One off Costs: Service Area Budget Budget Years Proposed Spend this Year Virement From Other Comments Annually Recurring Costs: Service Area Budget With Effect From Annual Net Impact Virement From (if applicable) Other Comments Page 93
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Financial Services – External Audit £305,820 1 April 2025 N/A 6.5 Risk There are no risk implications arising from this report. 6.6 Staffing Preparation of the Council’s financial statements will be co-ordinated by the Chief Financial Officer and will require input from all sections of Financial Services along with other departments across the Council. 6.7 Best Value and Transformation The audit covers aspects of Best Value. 6.8 Property None arising directly from this report. 6.9 Information Communications/Technology/Digital None arising directly from this report 6.10 Equalities, Social Inclusion and Economic Impact None arising directly from this report. 6.11 Climate Change and Biodiversity Impacts None arising directly from this report. 7. CONSULTATION 7.1 This report has been prepared in consultation with CMT, the Chief Financial Officer and the Audit and Risk Manager and any comments made have been incorporated into the report 8. BACKGROUND PAPERS 8.1 Page 94
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Moray Council External Audit Plan Financial year ending 31 March 2025 Prepared for those Charged with Governance, the Controller of Audit and the Accounts Commission 07 May 2025 APPENDIX 1 Page 95
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Contents Section Page 1. Key developments impacting our audit approach 03 2. Introduction and Headlines 05 3. Identified risks 10 4. Our approach to materiality 21 5. Group audit 25 6. IT audit strategy 27 7. Wider scope and best value arrangements 29 8. Audit Scotland deliverables 41 9. Logistics 45 10. Fees and related matters 49 11. Independence considerations 53 12. Communication of audit matters with those charged with governance 55 13. Delivering audit quality 57 14. Appendices 61 Moray Council External Audit Plan 2024/25 2 Page 96
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Key developments impacting our audit approach 01 Moray Council External Audit Plan 2024/25 3 Page 97
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 4Moray Council External Audit Plan 2024/25 4 Key developments impacting our audit approach Our commitments • As a firm, we are absolutely committed to audit quality and financial reporting in the local government sector. • To ensure close work with audited bodies and an efficient audit process, our preference as a firm is either for our staff to work on site with you and your staff or to develop a hybrid approach of on-site and remote working. • We would like to offer a formal meeting with the Chief Executive each quarter as part of our commitment to keep you fully informed on the progress of the audit. • At appropriate points within the audit, we would also like to meet informally with the Chair of your Audit and Scrutiny Committee, to brief them on the status and progress of the audit work to date. • We will consider your arrangements for managing and reporting your financial resources as part of our audit in completing our wider scope work in relation to financial management and financial sustainability. • Our wider scope work will also consider your arrangements relating to vision, leadership and governance and use of resources to improve outcomes. • We hold annual financial reporting workshops for our audit bodies to access the latest technical guidance and interpretation, discuss issues with experts and create networking links with other client to support consistent and accurate financial reporting across the sector. Page 98
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and Headlines02 Moray Council External Audit Plan 2024/25 5 Page 99
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and headlines (1) Purpose This document provides an overview of the planned scope and timing of the external audit of Moray Council and its group for those charged with governance. The Group includes: • Subsidiaries: Connected Charitable Trust Funds, Other Trusts Funds and Common Good Fund • Associates: Moray Council, Grampian Valuation Joint Board and Moray Leisure Limited We are appointed by the Accounts Commission as the external auditors of Moray Council for the five- year period 2022/23 to 2026/27. Respective responsibilities • The Code of Audit Practice (the Code) summarises where the responsibilities of auditors begin and end and what is expected from the audited body. Our respective responsibilities, and that of Moray Council are summarised in the Appendix of this Audit Plan. We draw your attention to this and the Code. Scope of our Audit The scope of our audit is set in accordance with the Code and International Standards on Auditing (ISAs) (UK). We are responsible for forming and expressing an opinion on Moray Council’s financial statements, which have been prepared by management with the oversight of those charged with governance (Full Council). Our audit of the financial statements does not relieve management or the Full Council of your responsibilities. It is your responsibility to ensure that proper arrangements are in place for the conduct of your business, and that public money is safeguarded and properly accounted for. As part of our wider scope and Best Value work, we will consider how you are fulfilling these responsibilities. Our audit approach is based on a thorough understanding of Moray Council and is risk based. Moray Council External Audit Plan 2024/25 6 Page 100
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and headlines (2) Group Audit Moray Council is required to prepare group financial statements that consolidate the financial information of: • Moray Council • Moray Integration Joint Board • Grampian Valuation Joint Board • Moray Leisure Limited • Moray Council Common Good Funds & Moray Council Trust Funds Moray Council External Audit Plan 2024/25 7 Significant risks Those risks requiring special audit consideration and procedures to address the likelihood of a material financial statement error have been identified as: • Management override of controls (ISA (UK) 240); • Risk of fraud in expenditure recognition – non payroll expenditure (cut-off) (PN10); • Valuation of land, buildings and Council dwellings; • Valuation of defined benefit pension scheme liability. We will communicate significant findings on this area as well as any other significant matters arising from the audit to you in our Audit Findings (ISA 260) Report. The audit plan sets out our risk-based audit approach for Moray Council. This plan outlines our planning risk assessment and is reported to those charged with governance (full Council) and will be shared with Audit Scotland. Materiality We have calculated our planning materiality to be £8.080 million (Group) (PY: £7.542 million) and £7.650 million (Council) (PY: £7.143million), which equates to 2% (Group) (PY: 2%) and 1.9% (PY: 1.9%) (Council) of your prior year gross expenditure as per the audited 2023/24 financial statements. Performance materiality has been determined as £5.660 million (Group) (PY: £5.258 million) and £5.350 million (Council) (PY: £5.000 million) and is based on 70% (PY: 70%) of planning materiality. We are obliged to report uncorrected omissions or misstatements other than those which are ‘clearly trivial’ to those charged with governance. A lower materiality threshold will of £25,000 will be used on the Senior Officers Remuneration table within the Remuneration Report. We will revisit our materiality throughout our audit including updating to reflect the draft unaudited financial statements for 2024/25. Other Matters We summarise other audit matters for the Audit and Scrutiny Committee’s awareness. This includes: • Consideration of going concern in accordance with Practice Note 10. • Certification of grant claims and returns. The two approved claims/returns for 2024/25 relate to housing benefit (HB) subsidy and non-domestic rates (NDR). • Completing Assurance Statements on Whole of Government Accounts. • In accordance with the Code and planning guidance we also required to complete and submit a number of information returns and other deliverables to Audit Scotland during the year. Page 101
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and headlines (3) Audit Fees Audit fees were shared by Audit Scotland with Moray Council in January 2025. The baseline audit fee set is £305,550. Audit fees are paid to Audit Scotland who in turn pay Grant Thornton UK LLP. The baseline audit fee has been agreed with the audited body. We reserve the right to review our fee during the audit should significant delays be encountered and/or new technical matters arise. There will be changes to the above audit fee due to anticipated increased work required on the audit and the introduction of new requirements as follows: • IFRS 16 applies for the first time in 2024/25 • ISA (UK) 600 – Group Financial Statements has been amended • Additional testing of journals due to lack of authorisation control • Follow up of significant number of audit recommendations raised in the 2023/24 audit • Potential recategorisation of Moray Council as a category 2 audit as expenditure is greater than £500 million Until the work is fully performed on these new areas the full impact is not yet determined and will be discussed with management and reported in our Annual Audit Report. More detail on the above can be found at page 50 of this plan. We reserve the right to review our fee during the audit should significant delays be encountered and/or new technical matters arise. Moray Council External Audit Plan 2024/25 8 Adding Value Through the Audit Our overall approach to adding value through the audit is clear and upfront communication, founded on our public sector credentials. We use our LEAP audit methodology and data analytics to ensure delivery of a quality audit. We aim to add value to Moray Council through our external audit work by being constructive and forward looking, by attending meetings of both the Full Council where appropriate and the Audit and Scrutiny Committee and by recommending and encouraging good practice. In so doing, we will help Moray Council promote improved standards of governance, better management and decision making and more effective use of resources. We will ensure an element of unpredictability in our testing to highlight areas of risk and improvements that can be made through both the financial statement and wider scope and best value audit. We have also invited members of your financial reporting team to our annual Local Government Chief Accountants workshop, which is led by our internal financial reporting technical team. We also look to bring forward audit testing where possible by performing an interim audit which was delivered in March 2025. Early testing covered NNDR reliefs and payroll for the first nine months of the financial year. This will help provide a smooth and efficient audit process to support delivery for the year end audit. Page 102
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and headlines (4) Group audit approach A revised edition of ISA (UK) 600 applies for the first time to 2024/25 annual audits. This introduces significant changes to the audit of groups including the following: • A proactive risk-based approach to the audit of groups. This means more focus on identifying and assessing the risks of material misstatement, planning the approach to the audit and performing engagement procedures that respond to the assessed risks. • Greater focus on the resources needed to perform the engagement, and the direction and supervision of the engagement team and the review of its work. • The definition of ‘engagement team’ includes component auditors. • The definition of ‘significant components’ has been removed. • The requirements for robust two-way communication between the group and component auditor have been strengthened. Moray Council External Audit Plan 2024/25 9 Wider Scope In accordance with the Code, our planning considers the wider scope and Best Value areas of audit. We have identified the following wider scope risks and will conclude on these during the audit: Financial management – There is a potential significant risk that budgetary control and financial management information for members is not consistent for effective decision making. More information relating to the response to this risk can be found on page 32 of this report. Financial sustainability – There is a risk that transformation and savings plans to address financial pressures for medium to longer term are not sufficient to address future funding gaps and increasing deficits. More information relating to the response to this risk can be found on page 34 of this report. Vision, Leadership and Governance - There is a potential significant risk that the Council do not meet their key priorities due to delayed progression of objectives and the pace of change being limited or slow. More information relating to the response to this risk can be found on page 36 of this report. Use of Resources to Improve Outcomes – no significant risks identified. Findings and conclusions drawn from procedures undertaken on the four wider scope areas will be reported within the Annual Audit Report. As part of our integrated wider-scope work we also use a risk-based approach to assess and report on whether Moray Council has made proper arrangements for securing Best Value and is complying with its community planning duties. For 2024/25 we are required to carry out work and report on the Best Value thematic ‘Transformation – How councils are redesigning and delivering more efficient services to achieve planned outcomes.’ Page 103
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Identified risks03 Moray Council External Audit Plan 2024/25 10 Page 104
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (1) Significant risks are defined by ISAs (UK) as risks that, in the judgement of the auditor, require special audit consideration. In identifying risks, audit teams consider the nature of the risk, the potential magnitude of misstatement, and its likelihood. Significant risks are those risks that have a higher risk of material misstatement. “In determining significant risks, the auditor may first identify those assessed risks of material misstatement that have been assessed higher on the spectrum of inherent risk to form the basis for considering which risks may be close to the upper end. Being close to the upper end of the spectrum of inherent risk will differ from entity to entity and will not necessarily be the same for an entity period on period. It may depend on the nature and circumstances of the entity for which the risk is being assessed. The determination of which of the assessed risks of material misstatement are close to the upper end of the spectrum of inherent risk, and are therefore significant risks, is a matter of professional judgment, unless the risk is of a type specified to be treated as a significant risk in accordance with the requirements of another ISA (UK).” (ISA (UK) 315). In making the review of unusual significant transactions “the auditor shall treat identified significant related party transactions outside the entity’s normal course of business as giving rise to significant risks.” (ISA (UK) 550). Significant risk Description Management override of controls Under ISA (UK) 240 there is a non-rebuttable presumed risk that the risk of management override of controls is present in all entities. Our risk focuses on the areas of the financial statements where there is potential for management to use their judgement to influence the financial statements alongside the potential to override the entity’s internal controls, related to individual transactions. We have therefore identified management override of controls, in particular journals, management estimates and of transactions outside the course of business as a significant risk of material misstatement. We will: • Document our understanding of and evaluate the design effectiveness of management’s key controls over journals. • Analyse your full journal listing for the year and use this to determine our criteria for selecting high risk journals. • Test the high risk journals we have identified. • Gain an understanding of the critical judgements applied by management in the preparation of the financial statements and consider their reasonableness. • Gain an understanding of the key accounting estimates made by management and carry out substantive testing on in scope estimates. • Evaluate the rationale for any changes in accounting policies, estimates or significant unusual transactions. Management should expect engagement teams to challenge management in areas that are complex, significant or highly judgmental which may be the case for accounting estimates, going concern, related parties and similar areas. Management should also expect to provide to engagement teams with sufficient evidence to support their judgments and the approach they have adopted for key accounting policies referenced to accounting standards or changesthereto. Where estimates are used in the preparation of the financial statements management should expect teams to challenge management’s assumptions and request evidence to support those assumptions. Moray Council External Audit Plan 2024/25 11 Page 105
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (2) Significant Risk Description Fraud in Expenditure Recognition Due to the presumption that there are risks of fraud in expenditure recognition, we are required to evaluate which types of expenditure, expenditure transactions or assertions give rise to such risks. Practice Note 10: Audit of Financial Statements of Public Sector Bodies in the United Kingdom (PN10) states: "As most public bodies are net spending bodies, then the risk of material misstatement due to fraud related to expenditure may be greater than the risk of material misstatements due to fraud related to revenue recognition". Moray Council’s expenditure includes both payroll and non-payroll costs. We consider payroll costs to be well forecast and are able to agree these costs to underlying payroll systems. As such we believe there is less opportunity for a material misstatement as a result of fraud to occur in this area. We therefore focus our risk on the completeness of non-payroll expenditure streams. Our testing will include a specific focus on year end cut-off arrangements, including consideration of the existence of accruals and provisions, in relation to non payroll/non finance expenditure for the single entity. We therefore consider this to be a significant risk to our audit however do not consider this to be a key audit matter. We will: • Evaluate the design and implementation effectiveness of the accounts payable system. • Evaluate the design and implementation effectiveness of your system for recording accruals. • Verify that the operating expenses included within the financial statements are complete via review of the reconciliations between the Accounts Payable system and the General Ledger. • Search for unrecorded liabilities by performing a substantive sample test of invoices input on to the accounts payable system post period end. • Search for unrecorded liabilities by reviewing cash payments post period end. Moray Council External Audit Plan 2024/25 12 Page 106
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (3) Significant Risk Description Fraud in Revenue Recognition Under ISA (UK) 240 there is a rebuttable presumed risk that revenue may be misstated due to the improper recognition of revenue. This presumption can be rebutted if the auditor concludes that there is no risk of material misstatement due to fraud relating to revenue recognition. (rebutted) Having considered the risk factors set out in ISA240 and the nature of the revenue streams at Moray Council and the Group, we have determined that the risk of fraud arising from revenue recognition for all revenue streams can be rebutted, because: • there is little incentive to manipulate revenue recognition. • there is a low opportunity to manipulate other income since it is non complex and there are sufficient controls in place to prevent and detect fraud from other income streams, we therefore believe that the risk of material fraud is low. Therefore, we do not consider this to be a significant risk for Moray Council and the Group. Moray Council External Audit Plan 2024/25 13 Page 107
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (4) Significant Risk Description Valuation of land, buildings and council dwellings In accordance with the CIPFA/LASAAC Code of Practice, except for initial recognition, Moray Council is required to hold property and property, plant and equipment (PPE) on a valuation basis. The valuation basis used will depend on the nature and use of the assets. Specialised land, buildings, equipment, installations and fittings are held at depreciated replacement costs, as a proxy for fair value. Non-specialised land and buildings, such as offices, are held at fair value except for Headquarters Campus buildings which are too large to be marketed as office accommodation and are measured at depreciated replacement cost as an estimate of current value. Council dwellings are determined using the basis of existing use value for social housing. Moray Council employ an internal valuer to undertake a rolling programme of valuations across their asset base valuing land, buildings and council dwellings at least once every five years. In the intervening periods, Moray Council carries out an indexation exercise. As at 31 March 2024, Moray Council held PPE of £1.239 billion including land and buildings of £0.498 billion and council dwellings of £0.446 billion. Given the significant value of the land, non-specialised buildings and council dwellings held by Moray Council, and the level of complexity and judgement involved in their estimation process, there is an inherent risk of material misstatement in the year end valuation of some of these assets. However, the risk is less prevalent in other assets as these are generally held at depreciated historical cost, as a proxy of fair value and therefore less likely to be materially misstated. We will therefore focus our audit attention on assets that have large and unusual changes in valuations compared to last year and/or unusual approaches to their valuations, as a significant risk requiring special audit consideration. The risk will be pinpointed as part of our final accounts work, once we have understood the population of assets revalued. We therefore consider this to be a significant risk to our audit and a key audit matter. We will: • Evaluate management’s processes and controls for the calculation of the valuation estimates, the instructions issued to their management experts and the scope of their work. • Evaluate the competence, capabilities and objectivity of the valuation expert. • Write to the valuer to confirm the basis on which the valuations were carried out. • Challenge the information and assumptions used by the valuer to assess completeness and consistency with our understanding. • Evaluate the valuer’s report to identify assets that have large and unusual changes and/or approaches to the valuation – these assets will be substantially tested to ensure the valuations are reasonable. • Test a sample of other asset revaluations made during the year to ensure they have been input accurately into the body’s asset register and associated entries in the financial statements. • Evaluate the assumptions made by management for any assets not revalued during the year and how management has satisfied themselves that these are not materially different to current value. • For any assets not formally revalued, evaluate the judgement made by management or others in the determination of the current value of these assets. Moray Council External Audit Plan 2024/25 14 Page 108
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (5) Significant Risk Description Defined benefit pension scheme The Council participates in the North East Scotland Pension Fund (NESPF), a local government pension scheme. There is an established Pension Fund protocol in place with Pension Fund auditors to provide external auditors with relevant assurance. The local government pension scheme is a defined benefit pension scheme and in accordance with IAS 19: Employee Benefits, Moray Council is required to recognise its share of the scheme assets and liabilities in its Statement of Financial Position. In 2023/24, the Council applied the asset ceiling test as prescribed by IFRIC 14 which limited the measurement of a defined benefit asset to the ‘present value of economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.’ The pension asset can be recognised as the lower of the net pension asset or the present value of any economic benefits available. The Council’s actuaries undertook this assessment and the asset value in the accounts was reduced as the present value of the benefits available were lower than the pension asset. The net liability arising from the unfunded defined benefit obligation remained as there is no right to offset this. The Council’s actuary will provide an annual IAS 19 actuarial valuation of Moray Council’s net liabilities in the pension scheme. There are a number of assumptions contained within the valuation, including: discount rate; future return on scheme assets; mortality rates; and future salary projections. Given the material value of the scheme’s gross assets and gross liabilities and the level of estimation in the valuation, there is an inherent risk that the defined benefit pension scheme net liability could be materially misstated within the financial statements. This risk is focussed on the appropriateness and reasonableness of the underlying assumptions adopted by the actuary and the suitability of these for the Council. We therefore consider this to be a significant risk to our audit and a key audit matter. We will: • Evaluate management's processes and controls for the calculation of the gross asset and gross liability and estimates, the instructions issued to the actuarial expert and the scope of their work. • Evaluate the assumptions made by the actuary in the calculation of the estimate, using work performed by an auditor’s expert commissioned on behalf of Audit Scotland and additional follow up procedures (where required). • Evaluate the data used by management’s experts in the calculation of the estimates. • Perform substantive analytical procedures over the gross assets, gross liabilities and in year pension fund movements, investigating any deviations from audit expectations. • Assess the accuracy and completeness of the IAS 19 estimates and related disclosures made within the Council’s financial statements. • Review management’s assessment of the application of IFRIC 14 (if applicable). • Evaluate the response received from the NESPF auditor in line with the Audit Scotland Protocol for Auditor Assurances for Local Government Pension Schemes. Moray Council External Audit Plan 2024/25 15 Page 109
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other risks identified (1) Other Risk Description IFRS 16 – Right of Use Assets In line with the Code of Audit Practice for Local Authority Accounting in the UK, Moray Council is required to adopt IFRS 16 Leases. 2024/25 will be the first year the Council will account for leases in line with IFRS 16. Under IFRS 16, a lessee is required to recognise right-of-use assets and associated lease liabilities in its Statement of Financial Position. This will result in significant changes to the accounting for leased assets and the associated disclosures in the financial statements in the year ended 31 March 2025. Further detail on the implications of this Accounting Standard is set out at Appendix 4. Our initial discussions with officers have indicated that: • the Council has established systems and processes to capture the data required to account for right-of-use lease assets in accordance with IFRS 16; • the Council revised its accounting polices for the year ended 31 March 2025 to reflect the requirements of this accounting standard. We will assess the existence, accuracy and completeness of the right-of-use assets and associated lease liabilities, and the related disclosures, during our audit. As this is a new area of focus for 2024/25, any work will be subject to an additional audit fee. Moray Council External Audit Plan 2024/25 16 Page 110
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other matters (1) Other work In addition to our expected responsibilities under the Code of Practice, we have a number of other audit responsibilities, as follows: • We audit parts of your Remuneration Report, as required under the Code, and check whether these sections have been properly prepared (opinion). These procedures are performed to a lower materiality. • We read the sections of your Statement of Accounts which are not subject to audit and check that they are consistent with the financial statements on which we give an opinion (opinion). • We carry out work to satisfy ourselves that disclosures made in your Annual Governance Statement are in line with requirements set out in Delivering Good Governance in Local Government: Framework (2016) (opinion). • We consider our other duties under the Code and planning guidance (2024/25), as and when required, including: • Supporting Audit Scotland’s reporting to the Accounts Commission. • Contributing to Audit Scotland Performance Reports and providing regular updates to Audit Scotland to share awareness of current issues. • Contributing to the National Fraud Initiative (NFI) report. • Notifying the Controller of the Audit when circumstances indicate a statutory report may be required. • Completing mandated information requests and returns and notifying Audit Scotland of any cases of money laundering or fraud. • Review of Technical guidance prior to issue by Audit Scotland. Moray Council External Audit Plan 2024/25 17 Internal control environment During our initial audit planning we will develop our understanding of your control environment (design and implementation) as it relates to the preparation of your financial statements. In particular we will: • Consider key business processes and related controls. • Assess the design of key controls over all significant risks we have identified. This will include key controls over: • Journal entries and other key entity level controls. • The completeness and accuracy of information provided to the actuary to perform the valuation of the net pension fund liability. • The review of actuarial outputs including key assumptions made by the actuary and significant movements impacting the net pension liability. • The review of valuation outputs including key assumptions made by the valuer and significant movements in revalued assets. • The completeness of accruals and liabilities recorded within the general ledger. • The processes in place to identify all leases to be accounted for under IFRS 16. Our focus is on design and implementation of controls only. We do not intend to assess or place any reliance on the operating effectiveness of your controls during our audit. Page 111
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other matters (2) Going concern assessment As auditors, we are required to obtain sufficient appropriate audit evidence regarding, and conclude on: • whether a material uncertainty related to going concern exists; and • the appropriateness of management’s use of the going concern basis of accounting in the preparation of the financial statements. The Public Audit Forum has been designated by the Financial Reporting Council as a “SORP-making body” for the purposes of maintaining and updating Practice Note 10: Audit of financial statements and regularity of public sector bodies in the United Kingdom (PN 10). It is intended that auditors of public sector bodies read PN 10 in conjunction with (ISAs) (UK). PN 10 was updated in 2020 to take account of revisions to ISAs (UK), including ISA (UK) 570 (Revised September 2019) on going concern. PN 10 allows auditors to apply a ‘continued provision of service approach’ when auditing going concern in the public sector, where appropriate. Audit Scotland’s also issued further guidance in a Going Concern publication in December 2020). Within our wider scope work we will conclude on Moray Council’s arrangements to ensure financial sustainability. Internal Audit We read and understand the work of Internal Audit during the year, and how this work feeds into management’s governance processes and inclusion within the Annual Governance Statement. We do not rely directly upon the work of Internal Audit, and our approach is fully substantive. Moray Council External Audit Plan 2024/25 18 Financial reporting developments During our audit we will actively discuss emerging financial reporting developments with you. We invited members of your finance team to our LG technical audit workshops earlier this year. The workshop will include focus on the new accounting and audit requirements for IFRS 16 on leases, and good practice information for those bodies preparing group accounts. Progress against prior year audit recommendation As part of our final account's procedures, we will follow up on the implementation of prior year audit recommendations and report on progress against the recommendations in full within our Annual Audit Report. Whole of government accounts (WGA) The Code of Audit Practice requires appointed external auditors to review and report on WGA returns prepared by audited bodies. External auditors of local authorities are required to provide an assurance statement on the 2024/25 WGA returns for bodies over a prescribed threshold determined by NAO. While we do not expect to be informed of the threshold before July 2025, we anticipate that we will be required to provide a partial assurance statement for Moray Council for 2024/25. Page 112
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other matters (3) National Fraud Initiative The National Fraud Initiative (NFI) in Scotland is a biennial counter-fraud exercise led by Audit Scotland, and overseen by the Public Sector Fraud Authority for the UK as a whole. The Council received their NFI matches in early 2025 and we will review progress towards reviewing matches, in particular those matches assessed as very high risk, and provide an update in our Annual Audit report. Interim Testing As part of our interim procedures, we will complete testing on a number of areas when efficient to do so, which will cover the first nine months of the financial year. This will include: • Payroll - starters, leavers and changes in circumstances • Payroll substantive analytical procedure • NDR reliefs testing Other material balances and transactions Under International Standards on Auditing, "irrespective of the assessed risks of material misstatement, the auditor shall design and perform substantive procedures for each material class of transactions, account balance and disclosure". All other material balances and transaction streams will therefore be considered as part of our audit. However, the procedures will not be as extensive as the procedures adopted for the significant risks we have identified and highlighted in this Audit Plan. Moray Council External Audit Plan 2024/25 19 Section 106 Charities Our audit appointment as the Council’s auditor includes the audit of any trust funds falling within Section 106 of the Local Government (Scotland) Act 1973 that are registered charities. For Moray Council we have therefore been appointed as auditors of the connected charitable trust funds. The audit fee for this work is outside of the main fee and is £7,190. Our audit procedures for the connected charities trust funds include: • Total transactional audit testing over all income and expenditure transactions incurred during 2024/25. • Agreeing investment balances held by the trust fund to external confirmation from investment fund managers. Grant Claims Local government auditors are required to review and report on approved grant claims prepared by local authorities. We will work with officers to ensure the timely completion and audit inspection of your Housing Benefit return and Non-Domestic Rates claim. Page 113
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other matters (4) Local Area Network Moray Council has a Local Area Network (LAN) comprising of representatives from relevant scrutiny bodies. The LAN is responsible for sharing information and intelligence between scrutiny bodies and for considering the timing of scrutiny activity to ensure that the scrutiny footprint is manageable for those engaging with the process. As the appointed auditor, we are responsible for bringing LAN members together at the start of planning and for informing the council about the LAN process. As part of our audit planning, we will engage with members of the Local Area Network (LAN) in other agencies to collect information on performance and scrutiny risks to inform risk assessment discussions. We will share with the Council a timetable of scrutiny activity for the year and advise the Chief Executive that any specific concerns should be raised with the relevant scrutiny body Moray Council External Audit Plan 2024/25 20 Risk Categorization ISQM (UK) 1 (Revised March 2023) requires audit firms to establish policies and procedures for the acceptance and continuance of client relationships. These acceptance and continuance procedures are the initial way that we manage risk and determine whether we should engage with an entity or whether to continue with an existing engagement. Risk management of our audit engagements is achieved through categorisation; by dividing up our audit engagements into categories and putting in place relevant risk management processes and procedures to mitigate those risks. Categorisation also assists with ensuring that we identify the correct ethical requirements which apply to each entity and assists with monitoring and checking compliance with the Ethical Standard. In the first two years of our audit appointment, Moray Council was classified as a Category 4C audit as gross expenditure did not exceed £500 million. In 2024/25, the Council may have gross expenditure which exceeds £500m and if this were to occur, our audit methodology requires us to recategorize the audit as a Category 2 audit. This would result in the audit team undertaking addition audit procedures, including engaging with external auditor’s experts and require our internal quality team to undertake an assessment over the accounts, known as a hot review. It also means our audit work is performed to a lower materiality (below 2.5%). Page 114
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality04 21Moray Council External Audit Plan 2024/25 Page 115
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality (1) The concept of materiality is fundamental to the preparation of the financial statements and the audit process and applies not only to the monetary misstatements but also to disclosure requirements and adherence to acceptable accounting practice and applicable law. Matter Description Planned audit procedures Determination We have determined planning materiality (financial statement materiality determined at the planning stage of the audit) based on professional judgement in the context of our knowledge of the business, including consideration of factors such as shareholder expectations, industry developments, financial stability and reporting requirements for the financial statements. We have determined financial statement materiality based on a proportion of the gross expenditure of the Council for the financial year. Materiality at the planning stage of our audit is £8.080 million for the Group (Prior Year £7.542 million) and £7.650 million for the Council (Prior Year £7.143 million), which equates to approximately 2% for the Group (Prior Year 2%) and 1.9% for the Council (Prior Year 9%) of your 2023/24 gross expenditure less IJB contributions of the Group and the Council. • We determine planning materiality in order to: – establish what level of misstatement could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements; – assist in establishing the scope of our audit engagement and audit tests; – determine sample sizes; – assist in evaluating the effect of known and likely misstatements in the financial statements. Other factors An item does not necessarily have to be large to be considered to have a material effect on the financial statements • An item may be considered to be material by nature when it relates to: – instances where greater precision is required (e.g. the Senior Management and Councillor Remuneration and Pension Benefits Tables). Reassessment of materiality Our assessment of materiality is kept under review throughout the audit process • We reconsider planning materiality if, during the course of our audit engagement, we become aware of facts and circumstances that would have caused us to make a different determination of planning materiality. 01 02 Moray Council External Audit Plan 2024/25 22 03 Page 116
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality (2) Matter Description Planned audit procedures Matters we will report to the Audit and Scrutiny Committee Whilst our audit procedures are designed to identify misstatements which are material to our opinion on the financial statements as a whole, we nevertheless report to the Audit and Scrutiny Committee any unadjusted misstatements of lesser amounts to the extent that these are identified by our audit work. Under ISA 260 (UK) ‘Communication with those charged with governance’, we are obliged to report uncorrected omissions or misstatements other than those which are ‘clearly trivial’ to those charged with governance. ISA 260 (UK) defines ‘clearly trivial’ as matters that are clearly inconsequential, whether taken individually or in aggregate and whether judged by any quantitative or qualitative criteria. • We report to the Audit and Scrutiny Committee any unadjusted misstatements of lesser amounts to the extent that these are identified by our audit work. • In the context of the Council, we propose that an individual difference could normally be considered to be clearly trivial if it is less than £0.404 million for the Group (Prior Year £0.377 million) and £0.382 million for the Council (Prior Year £0.357 million). If management have corrected material misstatements identified during the course of the audit, we will consider whether those corrections should be communicated to the Audit and Scrutiny Committee to assist it in fulfilling its governance responsibilities. Misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements; Judgments about materiality are made in light of surrounding circumstances, and are affected by the size or nature of a misstatement, or a combination of both; and Judgments about matters that are material to users of the financial statements are based on a consideration of the common financial information needs of users as a group. The possible effect of misstatements on specific individual users, whose needs may vary widely, is not considered. (ISA (UK) 320) Moray Council External Audit Plan 2024/25 23 04 Page 117
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality (3) Amount (£) Qualitative factors considered Materiality for the Group’s financial statements Materiality for the Council’s financial statements £8.080 million £7.650 million Our materiality has been set at 2% (Group) and 1.90% (Council) of prior year gross expenditure as per the 2023/24 financial statements. In setting this threshold, the following factors have been considered: • There were no significant findings in the 2023/24 audit report. • No significant deficiencies have been identified in the Council’s control environment. • The level of public interest in Moray Council by the public and the Scottish Government. Materiality for specific transactions, balances or disclosures – Remuneration Report £25,000 Due to the sensitivity of the disclosures to the users of the financial statements, a lower materiality threshold has been applied to the Senior Officers remuneration table within the Remuneration Report. All other remuneration disclosures will be audited at headline materiality. 24Moray Council External Audit Plan 2024/25 24 Page 118
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Group Audit05 Moray Council External Audit Plan 2024/25 25 Page 119
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Group audit scope and risk assessment In accordance with ISA (UK) 600 Revised, as group auditor we are required to obtain sufficient appropriate audit evidence regarding the financial information of the components and the consolidation process to express an opinion on whether the group financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework. Component Risk of material misstatement to the group Planned audit approach and level of response required under ISA (UK) 600 Revised Response performed by Risks identified Auditor Moray Council Yes Full scope audit performed by Grant Thornton UK LLP. Group auditor Valuation of land and buildings, valuation of pension benefits risk of fraud in expenditure recognition Grant Thornton UK Moray Integration Joint Board No Analytical procedures at group level Group Auditor N/A Grant Thornton UK Grampian Valuation Joint Board No Analytical procedures at group level Group Auditor N/A Grant Thornton UK Moray Leisure Limited No Analytical procedures at group level Group Auditor N/A Saffery LLP Moray Common Good Funds No Specific audit procedures on PPE and Cash held at 31 March Group Auditor Valuation of land and buildings Grant Thornton UK Moray Trust Funds No Specific audit procedures on PPE and Cash held at 31 March Group Auditor Valuation of land and buildings Grant Thornton UK There were have been no key changes in the group during 2024/25. We have not been made aware of any actual or attempted frauds in the year during our planning procedures performed to date. Should any factors arise in relation to fraud risk or actual or attempted fraud we ask that you inform us of this at the earliest possible opportunity. During the course of our audit engagement, we will continue to assess the appropriateness of our planned approach in relation to the group audit scope. Moray Council External Audit Plan 2024/25 26 Page 120
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|© 2025 Grant Thornton UK LLP Commercial in Confidence IT audit strategy06 Moray Council External Audit Plan 2024/25 27 Page 121
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|© 2025 Grant Thornton UK LLP Commercial in Confidence IT audit strategy In accordance with ISA (UK) 315, we are required to obtain an understanding of the IT environment related to all key business processes, identify all risks from the use of IT related to those business process controls judged relevant to our audit and assess the relevant IT general controls (ITGCs) in place to mitigate them. Our audit will include completing an assessment of the design and implementation of ITGCs related to security management; technology acquisition, development and maintenance; and technology infrastructure. IT application Audit area Planned level IT audit assessment Advance Business Solutions e5 System Financial Reporting • ITGC assessment (design and implementation effectiveness only) iTrent Payroll • ITGC assessment (design and implementation effectiveness only) CIPFA Asset Management PPE • ITGC assessment (design and implementation effectiveness only) The following IT applications are in scope for IT controls assessment based on the planned financial statement audit approach, we will perform the indicated level of assessment: Moray Council External Audit Plan 2024/25 28 Page 122
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements 07 Moray Council External Audit Plan 2024/25 29 Page 123
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (1) Our responsibilities under the Code extend beyond the audit of the financial statements. The Code sets out four wider scope areas that constitute the wider scope of public audit in Scotland. We consider each of these areas through our audit planning process and have set out below the identified areas of risk for our wider scope work. From our initial planning work, we have identified one significant risk in relation to Financial Sustainability. We have also identified two potential significant risks in relation to Financial Management and Vision, Leadership and Governance. We will continue to review your arrangements before we issue our Annual Audit Report. 30Moray Council External Audit Plan 2024/25 Financial management Has the body got sound budgetary process, financial capacity and the control environment and internal controls are operating effectively. Financial Sustainability How the body looks forward to the medium and longer term to consider whether the body is planning effectively to deliver its services or the way in which they should be delivered. Vision, Leadership and Governance How effective are the body’s scrutiny and governance arrangements, leadership and decision making, and transparent reporting of financial and performance information. Use of Resources to Improve Outcomes How the body makes best use of their resources to meet stated outcomes and improvement objectives, through effective planning and working with strategic partners and communities. This includes demonstrating economy, efficiency and effectiveness through the use of financial and other resources and reporting performance against outcomes. Page 124
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (2) 31 No significant weaknesses in arrangements identified or improvement recommendation made (in the Annual Audit Report – October 2024). No significant weaknesses in arrangements identified, but improvement recommendations made (in the Annual Audit Report – October 2024) Significant weaknesses in arrangements identified and key recommendations made (in the Annual Audit Report – October 2024) Moray Council External Audit Plan 2024/25 This section of our report documents our conclusions from audit work on the wider scope areas set out in the Code. We take a risk-based audit approach to wider scope work. We will continue to review your arrangements before we issue our Annual Audit Report. Financial Management The Council has arrangements in place for financial management but there is room for improvement in the arrangements in place for reporting the financial position, savings and budget to Members. Potential significant risk has been identified. We reviewed the financial management processes in place at Moray Council, including budget setting and preparation of monitoring reports taken to the Board during the year. We will follow up all prior year audit recommendations, including those raised in the Controller of Audit Report, as part of our year-end procedures. Financial Sustainability The Council’s arrangements in place for projecting the financial position of the Council in the medium to longer term require enhancement to ensure Members are being given information that will allow them to make informed and effective decisions. Significant risk identified in relation to financial sustainability. We reviewed future financial projections which show the level savings the Council need to deliver in future years in order to achieve financial sustainability. We reviewed the processes in place to agree efficiency savings as part of the 2025/26 budget and how delivery of existing savings are monitored. We will follow up all prior year audit recommendations, including those raised in the Controller of Audit Report, as part of our year-end procedures. Use of Resources to Improve Outcomes The Council has appropriate arrangements to report outcomes against Council priorities. Some key performance indicators have improved, but there are less indicators in the top two quartiles of performance than the previous year. No significant risk has been identified We reviewed the 2024/25 service performance reports taken to Committee meetings to gain an understanding of the Council’s in year performance. We will follow up all prior year audit recommendations raised as part of our year- end procedures. We will follow up all prior year audit recommendations, including those raised in the Controller of Audit Report, as part of our year-end procedures. Vison, Leadership and Governance The Council has made improvements in its governance arrangements and arrangements to deliver the vision, strategy and priorities set by the Council, however, there remains work to be done which is being monitored by the Best Value Action Plan. Potential significant risk has been identified. We reviewed the governance arrangements in place at the Council. We also liaised with Internal Audit to confirm the result of their reviews to date and the impact of any issues identified to date. We will follow up all prior year audit recommendations, including those raised in the Controller of Audit Report, as part of our year-end procedures. Page 125
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (3) 32Moray Council External Audit Plan 2024/25 Financial Management Strong budgetary control is essential in any local authority. Where savings plans are required, they should be detailed and progress on their attainment regularly reported to Officers and Members. Financial forecasts must be accurate and regularly updated in order that effective decisions can be made. When the 2024/25 budget was approved, the Council projected a budget deficit of £19.196 million. The Council’s plan to achieve financial balance was through the agreement of a savings plan totalling £8.971 million, with the remaining £10.225 million being funded from working reserves. Further efficiency savings were identified following the agreement of the budget, with the final planned savings for the year totalling £12.473 million. Details on the progress of the savings plan and the projected use of reserves has been reported to Members throughout the financial year. The most recent update was provided as part of the Quarter 3 revenue monitoring report which was presented to Council in February 2025. This confirmed that the forecast use of working reserves is currently £6.477 million as at 31 December 2024. The Council are making good progress in the delivery of its savings plans and anticipate they will deliver more than 90% of expected savings in 2024/25. Delivering more than 90% of the updated savings target is higher than the Council had initially forecast to deliver. At the end of the financial year, the Council should report the final outturn position including a year-end reconciliation of budget and savings, setting out where services have under or overspent and have under or overachieved savings targets. The Council has a history of planning and using free reserves to balance the budget. In order to address this, the Council approved a Short to Medium Term Financial Strategy (2024-25 – 2026/27) in June 2024. The Strategy aimed to remove the reliance on reserves to balance the budget for 2025/26 and future years. Following approval of the 2025/26 Revenue Budget in February 2025, it was confirmed the Council has achieved this target as there is no forecast use of reserves in 2025/26. Page 126
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (4) 33Moray Council External Audit Plan 2024/25 Financial Management (continued) We recognise that the Council has made some progress with their financial management arrangements, including the fact they are no longer relying on reserves to balance the 2025/26 budget. However, several financial management recommendations were made in the 2023/24 Annual Audit Report in October 2024 and the Council have had limited time to respond to these in the months since. We will assess the implementation of these recommendations as part of our year end audit procedures. Therefore a potential significant risk has been identified in relation to the Council’s financial management arrangements. Potential significant risk identified: There is potentially a risk that budgetary control and financial management information for members is not consistent for effective decision making. Response to significant risk: We will: • Review financial forecasting and reporting arrangements for timeliness and accuracy. • Review and consider the accuracy of financial reporting (revenue and capital) as well as the narrative accompanying financial reports to Members. • Review and monitor progress against the savings plans identified for 2024/25 and beyond consider the level of detail that is provided to Members. • Follow up the recommendations raised in the 2023/24 Annual Audit Report, including those raised in the Controller of Audit Report. Page 127
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (5) 34Moray Council External Audit Plan 2024/25 Financial Sustainability Like all Scottish local authorities, Moray Council continue to face unprecedented financial pressures. In its 2025/26 Revenue Budget, approved by Full Council in February 2025, the Council confirmed that efficiency savings totalling £10.905 million would be required over the next three years (2025/26 – 2027/28) in order to achieve financial balance. The Council have approved £7.889 million of savings for 2025/26 and £1.021 million for financial years 2026/27 and 2027/28. A further £1.995 million of savings need to be identified. Delivery of these savings will be critical in ensuring the Council can achieve financial balance in the medium term. We note that the three-year deficit position in the 2025/26 budget is a significant improvement on the previous outlook agreed as part of the 2024/25 budget. The Council also prepare a Medium to Longer Term Financial Strategy (2025/26 – 2034/35) (MTLFS) document which was approved by the Council in December 2024. Whilst the MTLFS was prepared in advance of the agreement of the 2025/26 Revenue Budget, meaning the projections have since been updated, it shows the level of challenge the Council is likely to face in the coming years. The MTLFS is based on optimistic, average and pessimistic assumptions and the budget gap could range from a budget surplus of £28.6 million to a budget deficit of £107.5 million. The mid range projections show a total budget gap of £41.365 million over the 10-year period to 2034/35 and the Council will need to identify new approaches to manage this gap over the longer term. Significant risk identified: There is a risk that transformation and savings plans to address financial pressures for medium to longer term are not sufficient to address future funding gaps and increasing deficits. Page 128
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (6) 35Moray Council External Audit Plan 2024/25 Financial Sustainability (continued) Response to significant risk: We will: • Review how the council identifies significant financial pressures that are relevant to its short and medium-term plans and builds them into its plans. • Review how the council plans to bridge its funding gap and identify achievable savings and future transformation. • Review how the council plans its finances to support the sustainable delivery of services in accordance with strategic and statutory priorities. • Review how the council identifies and manages risk to financial resilience, such as unplanned changes in demand and assumptions underlying its plans. • Review how the council sets longer term financial plans and capital investment to deliver on priorities and how they determine their affordability. • Follow up the recommendations raised in the 2023/24 Annual Audit Report, including those raised in the Controller of Audit Report. Page 129
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (7) 36Moray Council External Audit Plan 2024/25 Vision, leadership and governance The Council hold a committee-based structure which has delegated functions to several committees who subsequently become responsible for the administration of services. We will continue to review the arrangements in place prior to issuing our Annual Report. Our work will also include reviewing the consistency of the Annual Governance Statement with the key findings from audit, scrutiny, and inspection. During the 2023/24 audit, we identified several recommendations in relation to the Council’s vision, leadership and governance arrangements including issues in relation to pace of change, cross party working and the effectiveness of the Audit & Scrutiny Committee. A number of these issues were also raised as part of the Controller of Audit Report and the Council continue to take steps to address the issues raised. Progress is monitored as part of the Best Value Action Plan which is reported to the Corporate Committee which confirms the progress the Council are making in addressing the issues raised in the Controller of Audit Report. Due to the number of vision, leadership and governance recommendations made in the 2023/24 Annual Audit Report and the limited time to respond to these in the months since, a potential significant risk has been identified in relation to the Council’s vision, leadership and governance arrangements. Potential significant risk identified: There is potentially a risk that the Council do not meet their key priorities due to delayed progression of objectives and the pace of change being limited or slow. Page 130
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (8) 37Moray Council External Audit Plan 2024/25 Vision, leadership and governance (continued) Response to significant risk: We will: • Review cross party working arrangements and governance arrangements in place to inform effective decision making. • Review arrangements in place to track and monitor performance and outcomes of council priorities as well as reviewing arrangements in place over the information provided by members to inform effective decision making. • Review the Council’s progress in implementing the actions identified in the Best Value Action Plan. • Follow up the recommendations raised in the 2023/24 Annual Audit Report, including those raised in the Controller of Audit Report. Page 131
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (9) 38Moray Council External Audit Plan 2024/25 Use of resources to improve outcomes We have not identified a risk in relation to the Council’s use of resources to improve outcomes at the planning stage. The Council has a Performance Management Framework (PMF) with the aim to seek continuous improvement. There are several mechanisms in place to report performance including the Annual Performance Report, Service Performance Reporting and the Local Government Benchmarking Framework (LGBF). Our work will include reviewing the arrangements the Council has in place to meet its performance objectives, for working with strategic partners and communities and reporting performance against outcomes, financial and other resources. We will also complete work on Theme 3 in the Best Value statutory guidance which relates to the effective use of resources (see further detail on page 40). We will also follow up the recommendations raised in the 2023/24 Annual Audit Report, including those raised in the Controller of Audit Report. Page 132
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (10) 39Moray Council External Audit Plan 2024/25 Best Value Local government bodies have a duty under the Local Government in Scotland Act 2003 to make arrangements which secure Best Value. Best Value is continuous improvement in the performance of the body’s functions, having regard to: • efficiency • effectiveness • economy • the need to meet equal opportunity requirements. Local government bodies are required to follow statutory guidance in respect of their Best Value duties. Best Value Thematic The Code requires that auditors assess and report on audited bodies’ performance in meeting their Best Value and community planning duties, as part of their annual audit. The Accounts Commission’s approach to Best Value involves reporting on individual local government bodies and thematically across the local government sector through performance reports. The thematic work for 2024/25 is on the subject of ‘Transformation: how councils are redesigning and delivering more efficient services to achieve planned outcomes’. This work will include an assessment of and conclusion on: • to what extent does the council have clear plans for transformation that link to its priorities and support long-term financial sustainability • to what extent do the council’s programme management arrangements facilitate effective oversight of its transformation plans • to what extent are communities and partners involved in the development and delivery of the council’s plans for transformation • to what extent has the council considered the impact of its transformation activity, including on vulnerable or protected groups. This work will be completed and reported to those charged with governance in advance of the financial statements audit work. Page 133
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (9) 40Moray Council External Audit Plan 2024/25 Performance Reporting Theme three in the Best Value statutory guidance is the effective use of resources, an element of which is performance reporting. We are required to undertake work on performance reporting annually. Below we set out the Audit Scotland requirements for 2024/25. Controller of Audit Report At least once every five years, the Controller of Audit reports to the Accounts Commission on each council’s performance in meeting its Best Value duties. Moray Council was selected as one of the 2023/24 reports and the report for Moray Council was published in April 2024. We will follow up the Council’s progress in implementing the recommendations from the Controller of Audit and the Accounts Commission as part of our 2024/25 audit fieldwork and report on this to members in our Annual Audit Report. Area of work What we will consider Service performance reporting • The council’s assessment of progress against its service priority measures in 2024/25 and beyond • The council’s reporting of relative performance, using the Local Government Benchmarking Framework Continuous improvement • The council's pace of improvement in delivering priority services • The council's depth of implementing improvement across council services Statutory performance reporting Whether the council has made proper arrangements for preparing and publishing statutory performance information: • Performance in improving local public services (including those provided with its partners and communities) and progress against agreed desired outcomes (SP1) • Its own assessment and audit, scrutiny and inspection body assessments of how it is performing against its duty of Best Value and how it as responded to these assessments (SP2). Page 134
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Scotland Deliverables08 Moray Council External Audit Plan 2024/25 41 Page 135
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Scotland Deliverables (1) 42Moray Council External Audit Plan 2024/25 As set out in the Code of Audit Practice, as appointed auditors we have a number of wider reporting responsibilities beyond the audit of the financial statements. Below we summarise the key areas of work for our 2024/25 audit, including expected reporting under Audit Scotland’s Code of Audit Practice and audit planning guidance: Requirement How we will report our findings Annual Accounts Perform an audit of the annual accounts and express an audit opinion. • Independent Auditor’s Report on the financial statements • Annual Audit Report detailing findings from our audit work on the financial statements. Wider scope audit areas Conclude and report on our assessment of the wider scope audit areas. • Annual Audit Report Best Value– Follow Up Follow up of the Moray Council’s progress in implementing the recommendations raised in previous Best Value Assurance Reports, Annual Audit Reports and the Controller of Audit report issued in March 2024 • Annual Audit Report Best Value thematic work for 2024/25 We are required to report locally on any Best Value thematic work prescribed by the Accounts Commission. For 2024/25 the prescribed thematic is ‘Transformation’. • Annual Audit Report • Reporting in a separate management report is also required. Statutory Performance Information Consider and report on Statutory Performance Information arrangements. • Annual Audit Report National Fraud Initiative (NFI) Contribute to NFI report. • Annual Audit Report • Reporting participation to Audit Scotland including completion of NFI questionnaire Page 136
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Scotland Deliverables (2) 43Moray Council External Audit Plan 2024/25 Requirement How we will report our findings Statutory Objections Consider statutory objections to the annual accounts • Response to any objections received. Whole of Government Accounts (WGA) Provide assurance over Moray Council’s WGA return. • Partial Assurance Statement on WGA return Housing Benefits Subsidy Claim Independent certification on housing benefit subsidy claim to the Department for Works and Pensions (DWP). • Auditor certificate on Housing Benefit Subsidy Claim (Deadline to be confirmed when Technical Guidance Note is released in April 2025) Non-domestic rates (NDR) Certification of NDR claim. • Auditor certificate on Non-Domestic Rate Return (Deadline to be confirmed when Technical Guidance Note is released in May 2025) Current Issues Returns Prepare and submit Current Issues Returns. • Current Issues Returns Statutory Objections Consider statutory objections to the annual accounts • Response to any objections received. Correspondence queries Carry out preliminary enquiries into any correspondence relevant to Moray Council that is referred to Audit Scotland. • Providing responses to any correspondence received based on our audit knowledge and understanding and the results of any review as agreed with Audit Scotland Page 137
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Scotland Deliverables (3) 44Moray Council External Audit Plan 2024/25 Requirement How we will report our findings Emerging issues Communication of emerging issues to Audit Scotland and highlight any issues for potential statutory reports. • Communicating throughout our audit emerging issues identified throughout the year Performance, impact and overview reports Contribute to housing benefit performance audits, the Shared Risk Assessment, sector annual reports, shared intelligence on health and social care, and sector meetings. • Providing information returns to Audit Scotland Money laundering and fraud Provide information on cases of money laundering or fraud. • Completion of fraud returns for all frauds over £5,000 or involving misappropriation or theft of assets or cash which are facilitated by weaknesses in internal control • Reporting cases to the National Crime Agency of any instances of money laundering or fraud Technical Guidance Contribute to Technical Guidance Notes • Providing responses to Audit Scotland consultations on draft Technical Guidance Notes for Auditors Local Area Network Engage with members of the Local Area Network (LAN) in other agencies to collect information on performance and scrutiny risks to inform risk assessment discussions • We will share with the Council a timetable of scrutiny activity for the year and advise the Chief Executive that if they have any specific concerns on the timetable, it should be raised with the relevant scrutiny body • We will share the timetable of scrutiny activity with the Scrutiny Coordination Group Page 138
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Logistics09 Moray Council External Audit Plan 2024/25 45 Page 139
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 46Moray Council External Audit Plan 2024/25 46 The Audit Timeline - Logistics (1) Planning January – March 2025 Key Dates Final July - September 2025 Completion September 2025 Key elements • Planning meeting with management to set audit scope • Planning requirements checklist to management • Agree timetable and deliverables with management • Issue the Audit Plan to management and Audit and Scrutiny Committee • Review of key judgements and estimates • Undertake payroll testing (first nine months of starters, leavers, changes in circumstances and payroll substantive analytic) Key elements • Audit teams to complete fieldwork and detailed testing • Weekly update meetings with management Key elements • Draft Audit Findings issued to management • Audit Findings meeting with management • Draft Audit Findings issued to Full Council • Audit Findings presentation to Full Council • Annual Audit Report • Finalise and sign financial statements & audit report Audit & Scrutiny Committee 07 May 2025 Full Council 24 September 2025 Audit phases: Year end 31 March 2025 We are required to submit audit plans to Audit Scotland by 31 March 2025, and it is anticipated that we will submit audited accounts and the Annual Audit Report by 30 September 2025. We have set out below our planned timescales for the Moray Council audit. Wider Scope & Best Value July 2025 Draft Audit Plan submitted to Audit Scotland 31 March 2025 Page 140
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|© 2025 Grant Thornton UK LLP Commercial in Confidence The Audit Timeline - Logistics (2) Audited body responsibilities Where audited bodies do not deliver to the timetable agreed, we need to ensure that this does not impact on audit quality or absorb a disproportionate amount of time, thereby disadvantaging our other audit engagements. Where additional resources are needed to complete the audit due to an audited body not meeting their obligations, we are not able to guarantee the delivery of the audit to the agreed timescales. In addition, delayed audits due to client issues may incur additional audit fees. Our requirements To aid the audit process, you need to ensure that you: • produce draft accounts, comprising financial statements and related reports, of good quality, by the deadline you have agreed with us; • prepare good quality working papers which support the figures included in the financial statements, in line with the working paper requirements schedule that we have shared with you, and make these available to us at the start of the year end audit visit; • provide all agreed data reports to us at the start of the audit, which are fully cleansed and reconciled to the figures in the financial statements; • ensure that all appropriate staff are available to us for queries over the planned period of the audit , or as otherwise agreed; • respond promptly and appropriately to all audit queries, within agreed timescales; • respond promptly to the request for information on the best value thematic and wider scope work to agreed timelines and ensure appropriate supporting evidence is provided; • Provide all required information for the housing benefit and non-domestic rates grant claims, within agreed timescales. Moray Council External Audit Plan 2024/25 47 Page 141
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 48Moray Council External Audit Plan 2024/25 48 Our team and communications Service delivery Audit reporting Audit progress Technical support Formal communications • Annual audit closure meeting • The Audit Plan • The Annual Audit Report • Progress and Sector Update Reports • Audit planning meetings • Audit clearance meetings • Communication of issues log • Technical updates Informal communications • Open channel for discussion • Communication of audit issues as they arise • Notification of up-coming issues (where appropriate) Angela L Pieri Engagement Lead T: 0161 214 6337 E: Angela.L.Pieri@uk.gt.com Andrew Wallace Audit Manager T: 0141 223 0671 E: Andrew.D.Wallace@uk.gt.com Lucy X Bell Audit Senior / In-charge • Key contact for senior management and Audit and Scrutiny Committee • Overall quality assurance • Audit team management • Resource management • Wider scope and best value reporting • Day-to-day point of contact • Audit planning/interim • Audit fieldwork Pool of technical specialists (e.g. IT audit and valuations staff) Yashika Goel Audit In-Charge T: 0141 223 0000 E: Yashika.Goel@uk.gt.com Page 142
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Fees and related matters10 Moray Council External Audit Plan 2024/25 49 Page 143
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Fees Across all sectors and firms, the Financial Reporting Council (FRC) has set out its expectation of improved financial reporting from organisations and the need for auditors to demonstrate increased scepticism and challenge and to undertake additional and more robust testing. As a firm, we are absolutely committed to meeting the expectations of the FRC on audit quality and public sector financial reporting. This includes, for Audit Scotland contracts, meeting the expectations of the Audit Scotland Quality Team and the Scottish quality framework. Audit fees were shared by Audit Scotland with the Chief Executive and Chief Financial Officer in January 2025. Audit fees are paid to Audit Scotland who in turn pay us. We reserve the right to review our fee during the audit should significant delays be encountered and/or new technical matters arise. Relevant Professional Standards Audit Scotland set the baseline audit fee. We can increase the fee, from the baseline, for the inclusion of additional risks, new technical matters or where specific client matters are identified, such as prior year misstatements and disclosure amendments re-occurring during the audit. We are required to consider all relevant professional standards, including paragraphs 4.1 and 4.2 of the FRC’s Ethical Standard (revised 2024) which state that the Engagement Lead must set a fee sufficient to enable the resourcing of the audit with partners and staff with appropriate time and skill to deliver an audit to the required professional and Ethical standards. The baseline fee of £305,550 has been set by Audit Scotland. In accordance with Audit Scotland guidance, we are able to discuss a variation to the audit fee where additional work is required. Further detail on the audit fee is available at page 52. Moray Council External Audit Plan 2024/25 50 Our audit appointment includes the audit of any trust funds falling within section 106 of the Local Government (Scotland) Act 1973 that are registered as charities with the Office of the Scottish Charities Regulator (OSCR). Auditors, appointed under the Accounts Commission are eligible under the charities regulations to audit a charity’s statement of accounts. As part of our audit work in the current year we will provide an opinion over the Council’s registered charity. The audit fee for this work is not covered in the fee set by Audit Scotland. At this stage we anticipate that the fee will be £7,190 based upon a similar level of work and number of charities as in previous years. If additional work is required which would result in an additional audit fee, this will be advised and subject to agreement with Moray Council. There will be changes to the baseline audit fee due to anticipated increased work required on the audit and the introduction of new requirements as follows: • IFRS 16 applies for the first time in 2024/25 • ISA (UK) 600 – Group Financial Statements has been amended • Additional testing of journals due to lack of authorisation control • Follow up of significant number of audit recommendations raised in the 2023/24 audit • Potential recategorisation of Moray Council as a category 2 audit as expenditure is greater than £500 million. These are considered in further detail at page 51. Page 144
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Fees The baseline audit fee does not consider any new areas of audit work which auditors are required to undertake in year. The following additional audit work will be carried out as part of our 2024/25 audit: • This is the first year the Council will account for leases in accordance with IFRS 16. Additional audit work will be required to gain an understanding of how the Council has accounted for its leases under the new accounting standard and the relevant disclosures within the financial statements. • There has been a change to ISA (UK) 600 – Audit of Group Financial Statements which requires auditors to enhance their understand of the group component. This will require additional audit work in 2024/25, although the full extent of our procedures are not yet known. • Additional work will be carried out due to the higher risk environment at the Council due to a lack of authorisation controls when journals are posted. • A high number of audit recommendation were raised in the 2023/24 Audit Report in relation to our financial statements audit, the wider scope audit, the Controller of Audit Report and the best value thematic. We are required to follow each recommendation up in 2024/25 and report on the progress the Council has made in addressing each recommendation. • In 2024/25, the Council may have gross expenditure which exceeds £500m. If this occurs, our audit methodology requires us to recategorize the audit as Category 2, in line with Financial Reporting Council (FRC) requirements. This would result in the audit team undertaking addition audit procedures, including engaging with external auditor’s experts and require our financial reporting team to undertake a financial review of the financial statements, known as a hot review. Moray Council External Audit Plan 2024/25 51 • Grant Thornton methodology allows from 2024/25 onwards that audits under £500 million expenditure can have materiality up to 2.5%. The maximum for audits over £500 million is 2%. Therefore moving category means there will be additional testing required, appreciating that the up to 2.5% materiality level cannot be considered. Until the work is fully performed on these new areas the full impact is not yet determined and will be discussed with management and reported in our Annual Audit Report. We reserve the right to review our fee during the audit should significant delays be encountered and/or new technical matters arise. Page 145
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Fees (2) Audit fees for 2024/25 We seek the additional fee to external auditor remuneration due to: • Additional work required in 2024/25 in relation to new IFRS 16 accounting requirements, new ISA 600 auditing standard and additional journals work due to heightened risk • Follow-up of prior year audit recommendations • The potential recategorization of the audit (TBC) At this stage, the extent of the additional work required from all of the above is not yet determined, and it will be discussed with management and confirmed in our Annual Audit Report. We therefore note at this stage the external auditor remuneration is £250,980 (the normal plus the charity) within the total audit fee of £312,740. Fee Assumption In setting the fee for 2024/25 we have assumed that you will: • prepare a good quality set of accounts, supported by comprehensive and well-presented working papers which are ready at the start of the audit • provide appropriate analysis, support and evidence for all critical and significant judgements and estimates made in preparing the financial statements • provide early notice of proposed complex or unusual transactions which could have a material impact on the financial statements • provide ongoing access to officers and management experts throughout the audit and timely responses to audit queries. • provide all requested information on the best value thematic and wider scope work to agreed timelines • provide the housing benefit and non-domestic rates grant claims and supporting working papers within agreed timescales. Additional Fees (Non-Audit Services) Moray Council External Audit Plan 2024/25 52 Service Fees (£) External Auditor Remuneration £243,790 Pooled Costs £6,120 Contribution to Performance Audit and Best Value £58,670 Sectoral cap adjustment -£3,030 2024/25 initial fee (informed by Audit Scotland) £305,550 Trust Fund Charity (not covered in the initial fee) £7,190 Baseline fee for 2024/25 £312,740 Service Fees (£) At planning stage we confirm there are no planned non-audit services Nil Page 146
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Independence considerations11 Moray Council External Audit Plan 2024/25 53 Page 147
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Independence considerations Ethical Standards and ISA (UK) 260 require us to give you timely disclosure of all significant matters that may bear upon the integrity, objectivity and independence of the firm or covered persons (including its partners, senior managers, managers). In this context, there are no matters that we are required to report. As part of our assessment of our independence at planning we note the following matters: We confirm that there are no significant facts or matters that impact on our independence at planning as auditors that we are required or wish to draw to your attention and consider that an objective reasonable and informed third party would take the same view. The firm and each covered person have complied with the Financial Reporting Council’s Ethical Standard and confirm that we are independent and are able to express an objective opinion on the financial statements. No non-audit services provided by Grant Thornton UK LLP have been identified. Any changes and full details of all fees charged for audit related and non-audit related services by Grant Thornton UK LLP and by Grant Thornton International Limited network member Firms will be included in our Annual Audit Report at the conclusion of the audit. Matter Conclusions Relationships with Grant Thornton We are not aware of any relationships between Grant Thornton and the Council that may reasonably be thought to bear on our integrity, independence and objectivity. Relationships and Investments held by individuals We have not identified any potential issues in respect of personal relationships with the Council or investments in the Council held by individuals. Employment of Grant Thornton staff We are not aware of any former Grant Thornton partners or staff being employed, or holding discussions in respect of employment, by the Council as a director or in a senior management role covering financial, accounting or control related areas. Business relationships We have not identified any business relationships between Grant Thornton and the Council. Contingent fees in relation to non-audit services No contingent fee arrangements are in place for non-audit services provided. Gifts and hospitality We have not identified any gifts or hospitality provided to, or received from, a member of the Council’s board, senior management or staff (that would exceed the threshold set in the Ethical Standard). Moray Council External Audit Plan 2024/25 54 Page 148
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Communication of audit matters with those charged with governance 12 Moray Council External Audit Plan 2024/25 55 Page 149
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Communication of audit matters with those charged with governance Our communication plan Audit Plan Annual Audit Report Respective responsibilities of auditor and management/those charged with governance Overview of the planned scope and timing of the audit, form, timing and expected general content of communications including significant risks and Key Audit Matters Planned use of internal audit Confirmation of independence and objectivity A statement that we have complied with relevant ethical requirements regarding independence. Relationships and other matters which might be thought to bear on independence. Details of non-audit work performed by Grant Thornton UK LLP and network firms, together with fees charged. Details of safeguards applied to threats to independence Significant matters in relation to going concern Views about the qualitative aspects of the Group’s accounting and financial reporting practices including accounting policies, accounting estimates and financial statement disclosures Significant findings from the audit Significant matters and issue arising during the audit and written representations that have been sought Significant difficulties encountered during the audit Significant deficiencies in internal control identified during the audit Significant matters arising in connection with related parties Identification or suspicion of fraud involving management and/or which results in material misstatement of the financial statements Non-compliance with laws and regulations Unadjusted misstatements and material disclosure omissions ISA (UK) 260, as well as other ISAs (UK), prescribe matters which we are required to communicate with those charged with governance, and which we set out in the table here. This document, the Audit Plan, outlines our audit strategy and plan to deliver the audit, while the Annual Audit Report will be issued prior to approval of the financial statements and will present key issues, findings and other matters arising from the audit, together with an explanation as to how these have been resolved. We will communicate any adverse or unexpected findings affecting the audit on a timely basis, either informally or via an audit progress memorandum. Respective responsibilities As auditor we are responsible for performing the audit in accordance with ISAs (UK), which is directed towards forming and expressing an opinion on the financial statements that have been prepared by management with the oversight of those charged with governance. The audit of the financial statements does not relieve management or those charged with governance of their responsibilities. Moray Council External Audit Plan 2024/25 56 Page 150
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality13 Moray Council External Audit Plan 2024/25 57 Page 151
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality (1) How our strategy differentiates our service Our investment in a specialist team, and leading tools and methodologies to deliver their work, has set us apart from our competitors in the quality of what we do. The FRC highlighted the following as areas of particularly good practice in its recent inspections of our work: • use of specialists, including at planning phases, to enhance our fraud risk assessment • effective deployment of data analytical tools, particularly in the audit of revenue • clear oversight at group level when working with component auditors, including detailed review of working papers to flush out the critical issues early. Our quality strategy We deliver the highest standards of audit quality by focusing our investment on: Creating the right environment Our audit practice is built around the markets it faces. Your audit team are focused on the Public Sector audit market and work with clients like you day in, day out. Their specialism brings experience, efficiency and quality. Building our talent, technology and infrastructure We’ve invested in digital tools and methodologies that bring insight and efficiency, and invested in senior talent that works directly with clients to deploy bespoke digital audit solutions. Working with premium clients We work with great public and private businesses that, like you, value audit, value the challenge a robust audit provides, and demonstrate the strongest levels of corporate governance. We’re aligned with our clients on what right looks like. Our objective is to be the best audit firm in the UK for the quality of our work and our client service, because we believe the two are intrinsically linked. Moray Council External Audit Plan 2024/25 58 The right people at the right time We are clear that a focus on quality, effectiveness and efficiency is the foundation of great client service. By doing the right audit work, at the right time, with the right people, we maximise the value of your time and ours, while maintaining our second- to-none quality record. Bringing you the right people means that we bring our specialists to the table early, resolving the key judgements before they impact the timeline of your financial reporting. The engagement leader always retains the final call on the critical decisions; we use our experts when forming our opinions, but we don’t hide behind them. Page 152
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality (2) Wendy Russell Partner, UK Head of Audit Quality underpins everything at Grant Thornton, as our FRC inspection results in the chart below attest to. We’re growing our practice sustainably, and that means focusing where we know we can excel without compromising our strong track record or our ability to deliver great audits. It’s why we will only commit to auditing businesses where we’re certain we have the time and resource, but, most importantly, capabilities and specialist expertise to deliver. You’re in safe hands with the team; they bring the right blend of experience, energy and enthusiasm to work with you and are fully supported by myself and the rest of our firm. Good or limited improvements required Significant improvements required Improvements required FRC’s Audit Quality Inspection and Supervision Inspection (% of files awarded in each grading, in the most recent report for each firm) 0% 20% 40% 60% 80% 100% Moray Council External Audit Plan 2024/25 59 Digital differentiation We’re a digital-first audit practice, and our investment in data analytics solutions has given our clients better assurance by focusing our work on transactions that carry the most risk. With digital specialists working directly with your teams, we make the most of the data that powers your business when forming our audit strategy. Oversight and control Wherever your audit work is happening, we make sure that its quality meets your exacting requirements, and we emphasise communication to identify and resolve potential challenges early, wherever and however they arise. By getting matters on the table before they become “issues”, we give our clients the time to deal with them effectively. Page 153
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality (3) Moray Council External Audit Plan 2024/25 60 Audit Quality Framework The Audit Quality Framework (AQF) published by Audit Scotland sets out it’s approach to achieving high quality public audit by all auditors and providers. The AQF is the framework used to provide the Auditor General and the Accounts Commission with robust, objective, and independent quality assurance, over the work conducted on their behalf by Audit Scotland and external firms. This work includes delivering the respective performance audit and Best Value work programmes and the annual audits of public bodies across Scotland’s public sector. Audit quality is at the core of public audit in Scotland and is the foundation for building consistency and confidence across all audit work. High-quality public audit provides the public, decision-makers, and politicians, with the assurance and information they need, and it helps Scotland’s Parliament hold public bodies to account. This is more important than ever when public services face rising demand and tightening budgets. Annual Audit Quality Report Audit Scotland’s Audit Quality and Appointment (AQA) team prepares an annual Audit Quality Report to provide assurance on audit quality, including compliance with the Financial Reporting Council’s Ethical Standard, to the Auditor General for Scotland and the Accounts Commission. This annual report summarises the AQA’s assessment of audit quality conducted on audit work, delivered by Audit Scotland and the six appointed firms (including Grant Thornton UK LLP) on behalf of the Auditor General for Scotland and the Accounts Commission on the 2022/23 audits. The report provides evidence that auditors have designed and implemented audit quality arrangements to assure the quality of their audit work and highlights areas for further improvement. This report is available at Quality of public audit in Scotland: Annual report 2023/24 and is published on annual basis. Independent External Reviews Independent external assurance offers the highest level of assurance to stakeholders. ICAEW replaced ICAS for 2021/22 independent reviews following a successful tendering exercise undertaken by Audit Scotland in 2022. ICAEW review audit files to assess the quality of audit work and compliance with the International Standards on Auditing (UK), Financial Reporting Council’s Practice Note 10 and Audit Scotland’s Code of Audit Practice. External reviews cover the firms and Audit Directors in Audit Scotland over a three-year cycle, with the external review results shown within the chart below for the last five financial years. Page 154
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendices14 Moray Council External Audit Plan 2024/25 61 Page 155
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 62Moray Council External Audit Plan 2024/25 62 Appendix 1 - Respective responsibilities Moray Council Your responsibilities include: • Maintaining adequate accounting records and working papers • Preparing accounts for audit, comprising financial statements, which give a true and fair view, and related reports • Establishing and maintaining a sound system of internal control • Establishing sound arrangements for proper conduct of affairs, including the regularity of transactions • Maintaining standards of conduct for the prevention and detection of fraud and other irregularities • Maintaining strong corporate governance arrangements and a financial position that is soundly based • Establishing and maintaining an effective internal audit function. External Audit Our responsibilities include: • Compliance with the FRC Ethical Standard • Compliance with the Code and UK Auditing Standards (ISA’s UK) in the conduct and reporting of our financial statements audit • Compliance with the Code and guidance issued by Audit Scotland in the conduct and reporting of our wider scope work • Providing assurance on specified returns and other outputs (where required), as specified in guidance issued by Audit Scotland • Liaison with and notifying Audit Scotland when circumstances indicate a statutory report may be required • Contributing to relevant performance studies (as set out in Audit Scotland’s Planning Guidance for 2024/25). The Code sets out auditor responsibilities and responsibilities of the audited body. Key responsibilities are summarised below. Please refer to the Code for further detail. Page 156
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendix 2 - The Grant Thornton Digital Audit – Inflo A suite of tools utilised throughout the audit process 01 Collaborate Ingest Detect Information requests are uploaded by the engagement team and directed to the right member of your team, giving a clear place for files and comments to be uploaded and viewed by all parties. What you’ll see • Individual requests for all information required during the audit • Details regarding who is responsible, what the deadline is, and a description of what is required • Graphs and charts to give a clear overview of the status of requests on the engagement The general ledger and trial balance are uploaded into Inflo. This enables samples, analytical procedures, and advance data analytics techniques to be performed on the information directly from your accounting records. Journals interrogation software which puts every transaction in the general ledger through a series of automated tests.From this, transactions are selected which display several potential unusual or higher risk characteristics. What you’ll see • Journals samples selected based on the specific characteristics of your business • A focused approach to journals testing, seeking to only test and analyse transactions where there is the potential for risk or misstatement 02 03 Moray Council External Audit Plan 2024/25 63 Page 157
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendix 3 - New or revised IFRS Amendments to IAS 21 – Lack of exchangeability IAS 21 has been amended by the IASB to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments are effective in the UK from 1 January 2025. IFRS 18 Presentation and Disclosure in the Financial Statements IFRS 18 will replace IAS 1 Presentation of Financial Statements. All entities reporting under IFRS Accounting Standards will be impacted. The new standard will impact the structure and presentation of the statement of profit or loss as well as introduce specific disclosure requirements. Some of the key changes are: • Introducing new defined categories for the presentation of income and expenses in the income statement • Introducing specified totals and subtotals, for example the mandatory inclusion of ‘Operating profit or loss’ subtotal. • Disclosure of management defined performance measures • Enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes. IFRS 18 will be effective in the UK from 1 January 2027.Amendments to IFRS 9 and IFRS 7 – Classification and measurement of financial instruments These amendments clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, adds guidance on the SPPI criteria, and includes updated disclosures for certain instruments. The amendments are effective in the UK from 1 January 2026. IFRS 19 Subsidiaries without Public Accountability: Disclosures IFRS 19 provides reduced disclosure requirements for eligible subsidiaries. A subsidiary is eligible if it does not have public accountability and has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards. IFRS 19 is a voluntary standard for eligible subsidiaries and is effective in the UK from 1 January 2027. Moray Council External Audit Plan 2024/25 64© 2025 Grant Thornton UK LLP The following IFRS Standards and amendments have been recently issued but have not yet been adopted by the Code of Audit Practice. Many of the items below will have limited or nil applicability for the Council but are included for completeness purposes. IFRS 17 Insurance contracts IFRS 17 replaces IFRS 4. IFRS 17 provides consistent principles for all aspects of accounting for insurance contracts. It removes existing inconsistencies and enables investors, analysts and others to meaningfully compare companies, contracts and industries. It has been effective in the UK since 1 January 2023. Page 158
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© 2025 Grant Thornton. All rights reserved. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. Moray Council External Audit Plan 2024/25 65 Page 159
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Informing the audit risk assessment for Moray Council 2024/25 Angela Pieri Director T 0161 214 6337 E Angela.L.Pieri@uk.gt.com Andrew Wallace Manager T 0141 223 0671 E andrew.d.wallace@uk.gt.com APPENDIX 2 Page 160
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence The contents of this report relate only to the matters which have come to our attention, which we believe need to be reported to you as part of our audit process. It is not a comprehensive record of all the relevant matters, which may be subject to change, and in particular we cannot be held responsible to you for reporting all of the risks which may affect your business or any weaknesses in your internal controls. This report has been prepared solely for your benefit and should not be quoted in whole or in part without our prior written consent. We do not accept any responsibility for any loss occasioned to any third party acting, or refraining from acting on the basis of the content of this report, as this report was not prepared for, nor intended for, any other purpose. 2 Page 161
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Table of Contents Section Page Purpose 4 General Enquiries of Management 6 Fraud 9 Fraud Risk Assessment 10 Laws and Regulations 15 Impact of Laws and Regulations 16 Related Parties 18 Going Concern 20 Accounting Estimates 22 Accounting Estimates - General Enquiries of Management 23 Appendix A – Accounting Estimates 26 3 Page 162
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Purpose The purpose of this report is to contribute towards the effective two-way communication between Moray Council's external auditors and Moray Council’s Audit Committee, as 'those charged with governance'. The report covers some important areas of the auditor risk assessment where we are required to make inquiries of the Audit Committee under auditing standards. Background Under International Standards on Auditing (UK), (ISA(UK)) auditors have specific responsibilities to communicate with the Audit Committee. ISA(UK) emphasise the importance of two-way communication between the auditor and the Audit Committee and also specify matters that should be communicated. This two-way communication assists both the auditor and the Audit Committee in understanding matters relating to the audit and developing a constructive working relationship. It also enables the auditor to obtain information relevant to the audit from the Audit Committee and supports the Audit Committee in fulfilling its responsibilities in relation to the financial reporting process. Communication As part of our risk assessment procedures we are required to obtain an understanding of management processes and the Council’s oversight of the following areas: • General Enquiries of Management • Fraud, • Laws and Regulations, • Related Parties, • Going Concern, and • Accounting Estimates. 4 Page 163
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Purpose This report includes a series of questions on each of these areas and the response we have received from Moray Council’s management. The Audit Committee should consider whether these responses are consistent with its understanding and whether there are any further comments it wishes to make. 5 Page 164
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence General Enquiries of Management Question Management response 1. What do you regard as the key events or issues that will have a significant impact on the financial statements for 2024/25? Impact of inflation on staffing costs. 2. Have you considered the appropriateness of the accounting policies adopted by Moray Council? Have there been any events or transactions that may cause you to change or adopt new accounting policies? If so, what are they? Accounting Policies are reviewed each year as the Accounts are prepared and charges incorporated when deemed necessary. No changes to Accounting Policies are anticipated for the 24/25 Accounts. 3. Is there any use of financial instruments, including derivatives? If so, please explain No derivatives. Financial Liabilities – measured at amortised cost and include: Long Term Loans from PWLB and commercial lenders, Short Term Loans from other Local Authorities, Lease Payables, PPP Contracts, Trade Payables. Financial Assets – measured at amortised cost and include: Cash in Hand, Bank Current and Deposit Accounts, Trade Receivables for Goods and Services Provided. 4. Are you aware of any significant transaction outside the normal course of business? If so, what are they? Not aware of any. 6 Page 165
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence General Enquiries of Management Question Management response 5. Are you aware of any changes in circumstances that would lead to impairment of non-current assets? If so, what are they? Not aware of any. 6. Are you aware of any guarantee contracts? If so, please provide further details N/A 7. Are you aware of the existence of loss contingencies and/or un-asserted claims that may affect the financial statements? If so, please provide further details N/A 8. Other than in house solicitors, can you provide details of those solicitors utilised by Moray Council during the year. Please indicate where they are working on open litigation or contingencies from prior years? Further information to be provided under from Legal Team. 7 Page 166
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence General Enquiries of Management Question Management response 9. Have any of the Moray Council’s service providers reported any items of fraud, non-compliance with laws and regulations or uncorrected misstatements which would affect the financial statements? If so, please provide further details Not aware of any. 10. Can you provide details of other advisors consulted during the year and the issue on which they were consulted? Mercer for Actuarial Services in relation to IAS 19 Employee Benefits. Arlingclose – Treasury Management Advisers. 11. Have you considered and identified assets for which expected credit loss provisions may be required under IFRS 9, such as debtors (including loans) and investments? If so, please provide further details Bad Debt Provision for Trade Debtors, Council Tax and Housing Rents will be processed as normal. No further allowance anticipated in 2023/24 8 Page 167
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Fraud Matters in relation to fraud ISA (UK) 240 covers auditors responsibilities relating to fraud in an audit of financial statements. The primary responsibility to prevent and detect fraud rests with both the Audit Committee and management. Management, with the oversight of the Audit Committee, needs to ensure a strong emphasis on fraud prevention and deterrence and encourage a culture of honest and ethical behaviour. As part of its oversight, the Audit Committee should consider the potential for override of controls and inappropriate influence over the financial reporting process. As Moray Council’s external auditor, we are responsible for obtaining reasonable assurance that the financial statements are free from material misstatement due to fraud or error. We are required to maintain professional scepticism throughout the audit, considering the potential for management override of controls. As part of our audit risk assessment procedures we are required to consider risks of fraud. This includes considering the arrangements management has put in place with regard to fraud risks including: • assessment that the financial statements could be materially misstated due to fraud, • process for identifying and responding to risks of fraud, including any identified specific risks, • communication with the Audit Committee regarding its processes for identifying and responding to risks of fraud, and • communication to employees regarding business practices and ethical behaviour. We need to understand how the Audit Committee oversees the above processes. We are also required to make inquiries of both management and the Audit Committee as to their knowledge of any actual, suspected or alleged fraud. These areas have been set out in the fraud risk assessment questions below together with responses from Moray Council’s management. 9 Page 168
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Fraud risk assessment Question Management response 1. Has Moray Council assessed the risk of material misstatement in the financial statements due to fraud? How has the process of identifying and responding to the risk of fraud been undertaken and what are the results of this process? How do the Council’s risk management processes link to financial reporting? The Council has established risk management, governance and operating procedures to mitigate the risk of material misstatement in the financial statements. The Corporate Risk Register detailing the Council’s principal risks is reviewed by CMT/SMT on a 6 monthly basis with an annual report provided to elected members. Services are also required to maintain risk registers detailing identifiable risks and mitigating controls. In addition, the Audit and Risk Manager prepares a risk-based audit plan which considers the Council’s strategic objectives, associated risks and the views of senior management. 2. What have you determined to be the classes of accounts, transactions and disclosures most at risk to fraud? A risk register is maintained by Accountancy recording risks, controls, etc. In addition, Internal Audit will also review and test transactions to ensure compliance with Council Regulations and Procedures. The use of IDEA, a computer assisted software system is used to analyse and select a sample for testing 3. Are you aware of any instances of actual, suspected or alleged fraud, errors or other irregularities either within Moray Council’s as a whole, or within specific departments since 1 April 2023? If so, please provide details No irregularity noted below the £5000 reporting threshold 10 Page 169
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Fraud risk assessment Question Management response 4. As a management team, how do you communicate risk issues (including fraud) to those charged with governance? The Council’s Financial Regulations require all irregularities to be reported to the Audit and Risk Manager. Principal risks facing the Council are reviewed on a 6 monthly basis by CMT/SMT and the Corporate Risk Register is then updated accordingly. 5. Have you identified any specific fraud risks? If so, please provide details Do you have any concerns there are areas that are at risk of fraud? Are there particular locations within Moray Council where fraud is more likely to occur? Not aware of any. 6. What processes do Moray Council have in place to identify and respond to risks of fraud? Financial Regulations detail that all staff irregularities should be reported to the Audit and Risk Manager. This is supported by the Policy to Combat Fraud, Theft, Bribery and Corruption and the Whistleblowing Policy. In addition, the Council participates in the National Fraud Initiative data matching exercise, and also publicises a point of contact to report fraud or irregularities involving the misuse of council resources. 11 Page 170
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Fraud risk assessment Question Management response 7. How do you assess the overall control environment for Moray Council, including: • the existence of internal controls, including segregation of duties; and • the process for reviewing the effectiveness the system of internal control? If internal controls are not in place or not effective where are the risk areas and what mitigating actions have been taken? What other controls are in place to help prevent, deter or detect fraud? Are there any areas where there is a potential for override of controls or inappropriate influence over the financial reporting process (for example because of undue pressure to achieve financial targets)? If so, please provide details The responsibility for developing and maintaining sound control environment rests with management. However, the Audit and Risk Manager prepares a risk-based audit plan which considers the Council’s strategic objectives and associated risks. While the prevention of fraud and error rests with management through the design and operation of suitable systems of control, reviews undertaken by Internal Audit will make recommendations to improve the control environment. Internal Audit also coordinates the Council’s participation in the National Fraud Initiative, a data matching exercise involving a range of public sector bodies. This activity is viewed as complementary to other audit activities, and participation assists Internal Audit in assessing the potential for the occurrence of fraud and related fraud risk. Testing will primarily be undertaken by the Services, with Internal Audit undertaking an overview of the process. In accordance with an Audit and Scrutiny Committee Report, the Internal Audit Section reviewed the key fraud risks identified within an Audit Scotland Report – Fraud & Irregularity. Findings detailing risks, mitigating controls and responsible officer(s) were reported to the Information Assurance Group. 8. Are there any areas where there is potential for misreporting? If so, please provide details None known. 12 Page 171
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Fraud risk assessment Question Management response 9. How does Moray Council communicate and encourage ethical behaviours and business processes of it’s staff and contractors? How do you encourage staff to report their concerns about fraud? What concerns are staff expected to report about fraud? Have any significant issues been reported? If so, please provide details The Council has a Policy to Combat Fraud, Theft, Bribery and Corruption. This policy is built around a counter fraud culture supported by practices to deter and detect fraudulent and corrupt activities. It takes account of the Council’s statutory obligations, including, and in particular, the provisions of the Bribery Act 2010. The Council has a statutory responsibility to make arrangements for the administration of its financial affairs under the direction of a proper officer - the Chief Financial Officer. The Council has incorporated within its standing orders and procurement procedures, arrangements in respect of contracts for the supply of services, goods or materials and the execution of works. These ensure that established and consistent contracting procedures are available for use by the Council, and all procuring officers are either fully trained or are given support by Procurement Officers as part of the Supported Tender Process. The Audit and Scrutiny Committee has a remit which includes ensuring that the highest standards of probity and public accountability are demonstrated. This involves oversight of internal control processes as a contribution to good governance and generally supporting an anti-fraud, theft, corruption, and bribery culture. This Committee considers reports produced by Internal and External Audit on the Council’s systems; reports which include recommendations to strengthen internal controls and in turn reduce the risk of fraud and related behaviours going undetected. .As detailed previously, Managers have an ongoing responsibility for implementing effective systems of control which secure the legitimacy of expenditure, the safeguarding of assets and income, the reliability of management information, the accuracy of record keeping and compliance with statutory guidance. They also have a responsibility to communicate this policy to their staff and ensure established systems are followed. Financial Regulations detail that all irregularities should be reported to the Audit and Risk Manager. In addition, a Confidential ‘whistle blowing’ policy and procedure is in place, enabling employees to raise any concerns about any aspect of the Council’s work without fear of victimisation, subsequent discrimination or disadvantage, and in the knowledge that such concerns will be properly investigated 13 Page 172
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Fraud risk assessment Question Management response 12. What arrangements are in place to report fraud issues and risks to the Audit Committee? How does the Audit Committee exercise oversight over management's processes for identifying and responding to risks of fraud and breaches of internal control? What has been the outcome of these arrangements so far this year? The Public Sector Internal Audit Standards (PSIAS) applicable to Local Government in Scotland requires the Audit and Risk Manager to report functionally to the Audit and Scrutiny Committee on various issues relative to the work of the Internal Audit Service, including special investigations. The Audit and Scrutiny Committee has a remit which includes ensuring that the highest standards of probity and public accountability are demonstrated. This involves oversight of internal control processes as a contribution to good governance and generally supporting an anti-fraud, theft, corruption, and bribery culture. This Committee considers reports produced by Internal and External Audit on the Council’s systems; reports which include recommendations to strengthen internal controls and in turn reduce the risk of fraud and related behaviours going undetected. Functions and makeup of the Audit and Scrutiny Committee have also been recently reviewed and updated to reflect the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA) Position Statement: Audit Committees in Local Authorities and Police 2022. 13. Are you aware of any whistle blowing potential or complaints by potential whistle blowers? If so, what has been your response? None noted. 14. Have any reports been made under the Bribery Act? If so, please provide details None noted. 14 Page 173
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Law and regulations Matters in relation to laws and regulations ISA (UK) 250 requires us to consider the impact of laws and regulations in an audit of the financial statements. Management, with the oversight of the Audit Committee, is responsible for ensuring that Moray Council's operations are conducted in accordance with laws and regulations, including those that determine amounts in the financial statements. As auditor, we are responsible for obtaining reasonable assurance that the financial statements are free from material misstatement due to fraud or error, taking into account the appropriate legal and regulatory framework. As part of our risk assessment procedures we are required to make inquiries of management and the Audit Committee as to whether the body is in compliance with laws and regulations. Where we become aware of non-compliance or suspected non-compliance we need to gain an understanding of the non-compliance and the possible effect on the financial statements. Risk assessment questions have been set out below together with responses from management. 15 Page 174
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Impact of laws and regulations Question Management response 1. How does management gain assurance that all relevant laws and regulations have been complied with? What arrangements does Moray Council have in place to prevent and detect non-compliance with laws and regulations? Are you aware of any changes to the Moray Council’s regulatory environment that may have a significant impact on the Moray Council’s financial statements? Generally speaking each service area (for example planning, procurement, social work) are familiar with the statutory regime in which they operate and will keep up to speed with developments through their professional associations such as CIPFA or SOLAR. Changes to legislation, consultations and guidance are notified to the Council by the Scottish Government and are distributed to the relevant departmental area. The legal section has teams which specialise in different areas of Council activity and will be involved (at the request of client departments) in the implementation of more complex changes (such as formation of the IJB) and in any areas where legislation is unclear. Legal compliance will often be subject to external regulation (for example data protection). The Councils Scheme of Delegation (detailing the powers given to officers to implement services under specified legislation) is reviewed annually in line with revised legislative powers, in consultation with client departments 2. How is the Audit Committee provided with assurance that all relevant laws and regulations have been complied with? The Councils Scheme of Delegation (detailing the powers given to officers to implement services under specified legislation) is reviewed annually in line with revised legislative powers, in consultation with client departments 3. Have there been any instances of non-compliance or suspected non-compliance with laws and regulation since 1 April 2024 with an on-going impact on the 2024/25 financial statements? If so, please provide details There are some minor data protection breaches that are currently being monitored. These are unlikely to have an impact on the financial statements. 4. Are there any actual or potential litigation or claims that would affect the financial statements? If so, please provide On going asbestos claims Employee tribunal cases 16 Page 175
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Impact of laws and regulations Question Management response 5. What arrangements does Moray Council have in place to identify, evaluate and account for litigation or claims? The legal section has teams which specialise in different areas of Council activity and will be involved (at the request of client departments) in the implementation of more complex changes (such as formation of the IJB) and in any areas where legislation is unclear. Where necessary external advise will be sought 6. Have there been any reports from other regulatory bodies, such as HM Revenues and Customs, which indicate non-compliance? If so, please provide details The on going records management plan from 2022/23 17 Page 176
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Related Parties Matters in relation to Related Parties Moray Council are required to disclose transactions with bodies/individuals that would be classed as related parties. These may include: ■ bodies that directly, or indirectly through one or more intermediaries, control, or are controlled by Moray Council; ■ associates; ■ joint ventures; ■ a body that has an interest in the authority that gives it significant influence over the Moray Council; ■ key management personnel, and close members of the family of key management personnel, and ■ post-employment benefit plans (pension fund) for the benefit of employees of the Moray Council, or of any body that is a related party of the Council. A disclosure is required if a transaction (or series of transactions) is material on either side, i.e. if a transaction is immaterial from the [type of body]’s perspective but material from a related party viewpoint then the Council must disclose it. ISA (UK) 550 requires us to review your procedures for identifying related party transactions and obtain an understanding of the controls that you have established to identify such transactions. We will also carry out testing to ensure the related party transaction disclosures you make in the financial statements are complete and accurate. 18 Page 177
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Related Parties Question Management response 1. Have there been any changes in the related parties including those disclosed in Moray Council’s 2024/25 financial statements? If so please summarise: • the nature of the relationship between these related parties and Moray Council • Whether Moray Council has entered into or plans to enter into any transactions with these related parties • the type and purpose of these transactions No changes 2. What controls does Moray Council have in place to identify, account for and disclose related party transactions and relationships? Senior Officers and Elected Members make annual returns and any significant factors that arise as part of this process would be factored into the Related Parties Note in the Annual Accounts 3. What controls are in place to authorise and approve significant transactions and arrangements with related parties? Normal procedures following the Authorisation policy would apply – transactions over £25,000 are checked by the Chief Financial Officer 4. What controls are in place to authorise and approve significant transactions outside of the normal course of business? For significant transactions that are new and outside the normal course of business Committee approval is required 19 Page 178
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Going Concern Matters in relation to Going Concern The audit approach for going concern is based on the requirements of ISA (UK) 570, as interpreted by Practice Note 10: Audit of financial statements and regularity of public sector bodies in the United Kingdom (Revised 2020). It also takes into account the National Audit Office's Supplementary Guidance Note (SGN) 01: Going Concern – Auditors’ responsibilities for local public bodies. Practice Note 10 confirms that in many (but not all) public sector bodies, the use of the going concern basis of accounting is not a matter of significant focus of the auditor’s time and resources because the applicable financial reporting frameworks envisage that the going concern basis for accounting will apply where the body’s services will continue to be delivered by the public sector. In such cases, a material uncertainty related to going concern is unlikely to exist. For this reason, a straightforward and standardised approach to compliance with ISA (UK) 570 will often be appropriate for public sector bodies. This will be a proportionate approach to going concern based on the body’s circumstances and the applicable financial reporting framework. In line with Practice Note 10, the auditor’s assessment of going concern should take account of the statutory nature of the body and the fact that the financial reporting framework for local government bodies presume going concern in the event of anticipated continuation of provision of the services provided by the body. Therefore, the public sector auditor applies a ‘continued provision of service approach’, unless there is clear evidence to the contrary. This would also apply even where those services are planned to transfer to another body, as in such circumstances, the underlying services will continue. For many public sector bodies, the financial sustainability of the body and the services it provides are more likely to be of significant public interest than the application of the going concern basis of accounting. Financial sustainability is a key component of value for money work and it is through such work that it will be considered. Page 179
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Going Concern Question Management response 1. What processes and controls does management have in place to identify events and / or conditions which may indicate that the statutory services being provided by Moray Council will no longer continue? Regular reporting on the Council’s finances would highlight any conditions which may meant he Council is no longer to deliver statutory duties. Regular performance reports to Service Committees would highlight this as well 2. Are management aware of any factors which may mean for Moray Council that either statutory services will no longer be provided or that funding for statutory services will be discontinued? If so, what are they? Not aware of any 3. With regard to the statutory services currently provided by Moray Council does Moray Council expect to continue to deliver them for the foreseeable future, or will they be delivered by related public authorities if there are any plans for Moray Council to cease to exist? Moray Council expects to continue to deliver statutory services 4. Are management satisfied that the financial reporting framework permits Moray Council to prepare its financial statements on a going concern basis? Are management satisfied that preparing financial statements on a going concern basis will provide a faithful representation of the items in the financial statements? The annual accounts will be prepared on a going concern basis and this will provide a faithful representation of the items included in the financial statements Page 180
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Accounting estimates Matters in relation to accounting estimates ISA (UK) 540 (Revised December 2018) requires auditors to understand and assess a body’s internal controls over accounting estimates, including: • The nature and extent of oversight and governance over management’s financial reporting process relevant to accounting estimates; • How management identifies the need for and applies specialised skills or knowledge related to accounting estimates; • How the body’s risk management process identifies and addresses risks relating to accounting estimates; • The body’s information system as it relates to accounting estimates; • The body’s control activities in relation to accounting estimates; and • How management reviews the outcomes of previous accounting estimates. As part of this process auditors also need to obtain an understanding of the role of those charged with governance, which is particularly important where the estimates have high estimation uncertainty, or require significant judgement. Specifically do Audit Committee members: • Understand the characteristics of the methods and models used to make the accounting estimates and the risks related to them; • Oversee management’s process for making accounting estimates, including the use of models, and the monitoring activities undertaken by management; and • Evaluate how management made the accounting estimates? We would ask the Audit Committee to satisfy itself that the arrangements for accounting estimates are adequate. 22 Page 181
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Accounting Estimates - General Enquiries of Management Question Management response 1. What are the classes of transactions, events and conditions, that are significant to the financial statements that give rise to the need for, or changes in, accounting estimate and related disclosures? Valuation of Property, Plant & Equipment Valuation of Pension Liability 2. How does the Council’s risk management process identify and address risks relating to accounting estimates? By engaging with experts in each of the areas identified the risk of material misstatement is reduced 3. How does management identify the methods, assumptions or source data, and the need for changes in them, in relation to key accounting estimates? The results of prior year audits are looked at and whether there was any material concerns raised or amendments made – in those instances accounting estimates would be reviewed 4. How do management review the outcomes of previous accounting estimates? The results of prior year audits are looked at and whether there was any material concerns raised or amendments made – in those instances accounting estimates would be reviewed 5. Were any changes made to the estimation processes in 2024/25 and, if so, what was the reason for these? No Page 182
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Accounting Estimates - General Enquiries of Management Question Management response 6. How does management identify the need for and apply specialised skills or knowledge related to accounting estimates? Each area is looked at in isolation and the skills/knowledge/capacity of relevant Services considered 7. How does the Council determine what control activities are needed for significant accounting estimates, including the controls at any service providers or management experts? Ensuring that relevant information is provided on time and accurately to ensure that the information received can be relied upon. 8. How does management monitor the operation of control activities related to accounting estimates, including the key controls at any service providers or management experts? Regular updates provided by preparers of the Accounts on any issues that arise. 9. What is the nature and extent of oversight and governance over management’s financial reporting process relevant to accounting estimates, including: - Management’s process for making significant accounting estimates - The methods and models used - The resultant accounting estimates included in the financial statements. The unaudited accounts are reported to Committee and then again upon completion of the audit. External Audit reporting also helps to inform on estimates Page 183
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Accounting Estimates - General Enquiries of Management Question Management response 10. Are management aware of any transactions, events, conditions (or changes in these) that may give rise to recognition or disclosure of significant accounting estimates that require significant judgement (other than those in Appendix A)? If so, what are they? Not aware of any additional areas where new estimates would be required to be disclosed. 11. Why are management satisfied that their arrangements for the accounting estimates, as detailed in Appendix A, are reasonable? No major changes required to annual accounts in previous years. 12. How is the Audit Committee provided with assurance that the arrangements for accounting estimates are adequate ? Annual accounts are reported to Full Council 25 Page 184
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Appendix A Accounting Estimates Estimates Method / model used to make the estimate Controls used to identify estimates Whether management have used an expert Underlying assumptions: - Assessment of degree of uncertainty - Consideration of alternative estimates Has there been a change in accounting method in year? Land and buildings valuations Infrastructure/Community Assets/AUC – DHC Schools – DRC Surplus Assets – Fair Value Council Dwellings - EUV Information used is industry standard information from entities such us BCIS. Internal valuers No Investment property valuations Fair Value Per the Code – Investment Property reviewed annually Internal valuers Follow the Code No Depreciation Straight line method over the useful life of the asset Estates provide useful life estimates Internal valuers No Heritage Assets Insurance valuations/Historic cost Yes No 26 Page 185
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Appendix A Accounting Estimates Estimate Method / model used to make the estimate Controls used to identify estimates Whether management have used an expert Underlying assumptions: - Assessment of degree of uncertainty - Consideration of alternative estimates Has there been a change in accounting method in year? Provisions Only one provision – amounts based on actual amounts Liaise with HR No Based on information from HR , which is confirmed annually that it is still at the right level No Accruals Based on actual entries in the general ledger or from information from departments No, but in some cases estimates are made by quantity surveyors Most cases are based on general ledger and no estimates. Were estimates are provided it will be based on professional judgement and we would query if it was materially different from estimates provided No Credit Loss and Impairment Bad Debt Provision – debtors, council tax, housing rents Debtors/Housing Rents: >12 months – provided in full 6-12 months – 50% <6 months – 0% Council Tax: <12 months – 0% >12 months – 100% No Looked at and reviewed each year to see if the percentages are still appropriate No Valuation of Defined Based on information from actuaries Information provided to actuaries based on year Yes Disclosure in accounts regarding the changes that could happen and the No 27 Page 186
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© 2024 Grant Thornton UK LLP | Moray Council 2024/25 Commercial in confidence Appendix A Accounting Estimates Estimate Method / model used to make the estimate Controls used to identify estimates Whether management have used an expert Underlying assumptions: - Assessment of degree of uncertainty - Consideration of alternative estimates Has there been a change in accounting method in year? Accrued Income Based on actual entries in the general ledger, or from information from departments No In most cases based on actual general ledger entries, so no estimates. Where estimates are provided it is based on professional judgement ad we would query if it was materially different from estimates provided No PFI Liabilities Financial models are used each year Financial models are well established and were set up in conjunction with experts and have been audited in detail since then Models used were set up in conjunction with experts – annual use is by council staff No changes considered – process well established Yes – Minor amendment to incorporate IFRS 16 Leases Fair Value of Assets and Liabilities (Financial Instruments) In most cases the fair value is calculated using models provided by the Councils treasury management advisers Use of external expert information Yes No 28 Page 187
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© 2024 Grant Thornton UK LLP ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton UK LLP is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. grantthornton.co.uk Page 188
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Report to: Audit and Scrutiny Committee Meeting Date: 7 May 2025 Report by: Depute Chief Executive (Education, Communities and Organisational Development) Report No: GSP004/25/LM Author: Louise Marshall Contact Email: performance@moray.gov.uk Subject: Local Government Benchmarking Framework 2023-24 Results 1. PURPOSE ☒ For Decision ☐ For Information 1.1 The purpose of this report is to present a corporate overview of benchmarking performance data for the period 2023-24. 1.2 This report is submitted to Committee in terms of Section III A (4) of the Council’s Scheme of Administration relating to monitoring performance in accordance with the Council’s performance management framework. 2. SUMMARY 2.1 The Local Government Benchmarking Framework (LGBF) provides evidence of trends in how resources are allocated, performance of services and levels of customer satisfaction. 2.2 At the time of reporting, results have been published for ninety-three indicators. Two indicators are no longer collected locally. The remaining twenty-three results yet to be published cover attainment, children looked after, developmental milestones, attendance and exclusion, child protection, council dwellings energy efficiency, gross value added and carbon emissions. 2.3 An assessment of relative performance in recent years can be inferred to an extent in an improving trend up to 2020/21, followed by a drop off in 2021/22, thereafter the pace of recovery has slowed. The charts below show that in 2023/24, for indicators currently published (83), overall, there has been a slight drop in performance with Item 9. Page 189
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indicator result values worsening to a greater margin (53%) than those that have improved (41%). 2.4 Assuming no significant change in rankings for the twenty-three indicators yet to be updated, overall, the position in terms of relative performance will remain similar to that of 2022/23. 2022/23 vs 2023/24 No change 5 indicators Not yet Results improved Results worsened N/A published1 34 indicators 44 indicators 23 indicators 3. RECOMMENDATIONS 3.1 It is recommended that Committee: i) scrutinise and note the Council’s performance in terms of a corporate overview of benchmarking results. Louise Marshall 30% 28% 28% 18% 23% 18% 17% 19% 24% 34% 22% 19% 28% 24% 27% 24% 28% 20% 25% 29% 20% 24% 27% 22% 22% 0% 20% 40% 60% 80% 100% 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 LGBF relative performance -national 1st quartile 2nd quartile 3rd quartile 4th quartile N/A 30% 30% 34% 22% 23% 20% 19% 10% 18% 32% 21% 15% 17% 22% 18% 18% 29% 21% 34% 39% 30% 28% 27% 23% 22% 0% 20% 40% 60% 80% 100% 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 LGBF relative performance -family 1st quartile 2nd quartile 3rd quartile 4th quartile N/A Page 190
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Strategy & Performance Manager 4. BACKGROUND AND CONTEXT 4.1 Local Government Benchmarking Framework (LGBF) data is refreshed throughout the year with the final data published in June that informs the National Benchmarking Overview Report. Results are gathered from national sources following annual data submissions and subject to extensive validation processes, a contributory factor to the time-lag in publication and reporting. A small number of results are supplied directly by local authorities. The full suite of benchmarking data can be viewed using the Improvement Service LGBF Dashboard. 4.2 Family Groups of councils were developed around the type of population that they service (e.g. relative deprivation and affluence) and the type of area in which they serve them (e.g. urban, semi-rural, and rural) to allow improvements to be identified and good practice shared. People Services Other Services Includes education, social work and housing. The benchmarking clubs are based on the average social context of the local authority population (using data from SIMD). Includes environmental services and culture/leisure services. The benchmarking clubs are based on the dispersion of the local authority population (using data for the Grant- Aided Expenditure indicator for population dispersion). Angus Argyll & Bute East Lothian Highland Midlothian Moray Scottish Borders Stirling East Ayrshire East Lothian Fife Moray North Ayrshire Perth & Kinross Stirling South Ayrshire 4.3 Results and commentary on benchmarking performance are included in Quarter 4 performance reports submitted to service committees in line with the Council’s performance management framework. 4.4 Caution is advised on making direct comparison between years due to significant impact of Covid-19 on results. 5. PROPOSALS 5.1 The national context presents a similar picture to that of Moray in the efforts and achievements delivered against an increasingly challenging backdrop and how sustained financial and workforce pressures have disrupted performance and efficiency improvements gained in previous years. 5.2 Despite challenges, good or improving performance is recognised in crisis grant decision timescales, older people receiving personal care at home, adult care inspectorate gradings, hospital re-admission rates, road condition, waste recycling rates, housing rent Page 191
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collection and repairs response times. Generally, indicator results across service areas are low in cost compared to other local authorities; however, this should be considered alongside performance and customer results. 5.3 Of the 106 results published, 23 results are placed in the lowest quartile (ranked 25th to 32nd), these will be scrutinised in relation to improvement by the relevant Service Committee as part of 2024-25 Quarter 4 Performance Reports submitted to the June cycle of meetings. Commentary on these indicators and the service plan actions undertaken throughout 2024/25 is included at Appendix 1. 5.4 Sixteen of the 23 indicators have featured in the lowest quartile over several years being: overall average tariff scores, average total tariff scores Scottish Index of Multiple Deprivation (SIMD) quintiles 2,3,4 and 5, P1, P4 and P7 pupils combined achieving expected levels in literacy and numeracy, funded early year provision grading. gender pay gap, teacher absence, operational building condition, cost of library visit, dwellings meeting Scottish Housing Quality Standards (SHQS), superfast broadband provision, ratio of financing costs and actual outturn. 5.5 Lowest quartile performance was reviewed by the senior management team to ensure planned word will secure improvement, particularly in the following Corporate Plan priority areas – • Improving attainment for all, a focus within the tackling poverty and inequality priority is being progressed through the development and implementation of the following strategy areas that will directly contribute to improved performance results; National Improvement Framework self-evaluation and Raising Achievement of our Learners, Our Moray Standard: Learning and Teaching Strategy and Supporting all Learners Strategy, Moray and Northern Alliance Progressions of Literacy and Numeracy, Achievement of Curriculum for Excellence Levels Assessment and Moderation Guidelines, Quality Assurance and Moderation support, Tracking and Monitoring Guidelines and Moray Quality Improvement Framework. Devolved school budgets and wider funding of Scottish Attainment Challenge, Pupil Equity and Strategic Equity Funding ensure schools continue to work to close identified attainment gaps. • Tackling the affordability of the school estate whilst meeting climate requirements contributes to Building Thriving, Resilient, Empowered Communities is addressed with the development of the Learning Estate Strategy, due to be reported to committee in September 2025 following completion of a staged programme of engagements. The Climate Change Strategy 2020-2030 and Routemap to Net Zero is subject to review through 2025 by the Climate Change Working Group who will reflect on progress and update targets with a greater understanding of the decarbonisation pathway the Council is on, the changes in national policies presenting a final report in December 2025. • Corporate Plan Strategic Framework and improving indicator results rests on the delivery of the Medium to Long Term Financial Strategy and the Workforce and Organisational Development Strategy. 5.6 If rankings of the unpublished indicators remain like previous years, up to six may also feature in the lowest quartile covering: attainment at level 6, children looked after in a community setting, looked after children exclusion, council dwellings energy efficiency, Page 192
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CO2 emissions within local authority scope and from transport. Results will be reported in 2025/26 quarter 2 performance reports to Service Committees. 5.7 Results that have improved / worsened by 5% from previous year are highlighted at Appendix 2 and a table of results split by theme is presented at Appendix 3. 6. SUMMARY OF IMPLICATIONS 6.1 The table below shows whether risks and implications apply if the recommendations are agreed: SUBJECT YES NO Corporate Plan and 10 Year Plan (Local Outcome Improvement Plan) X Policy and Legal Financial Risk Staffing Best Value and Transformation Property Information Communications Technology/Digital Equalities. Social Inclusion and Economic Impact Climate Change and Biodiversity Impact 6.2 Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) Improved Collaborative Leadership, as part of continuous improvement through Best Value, will better enable the Council to fulfil the ambitions set out in its strategic plans. a) Links to Council Corporate Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following Council Plan strategic priorities: ☒ Tackle Poverty and Inequality. ☒ Build Stronger Greener Vibrant Economy. ☒ Build Thriving, resilient, empowered Communities. b) Links to Local Outcomes Improvement Plan – The proposals in this report support and contribute to improved outcomes for communities as outlined in the following local Outcomes Improvement Plan priorities: ☒ Developing a diverse, inclusive, and sustainable economy ☒ Building a better future for our children and young people in Moray. ☒ Empowering and connecting communities. ☒ Improving wellbeing of our population 6.3 Policy and Legal The Council has a statutory requirement to publish a range of information that will demonstrate that it is a securing best value and assist in comparing performance both over time and between authorities where appropriate. 6.4 Financial None arising from this report. Page 193
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6.5 Risk None arising from this report although effective performance management assists in the management of risk. 6.6 Staffing None arising from this report. 6.7 Best Value and Transformation How councils plan for, manage and report on performance is a key area of focus in external audit work, particularly on best value. 6.8 Property None arising from this report. 6.9 Information Communications/Technology/Digital None arising from this report. 6.10 Equalities, Social Inclusion and Economic Impact None arising from this report. 6.11 Climate Change and Biodiversity Impacts None arising from this report. 7. CONSULTATION 7.1 This report has been prepared in consultation with Head of Governance, Strategy and Performance and senior managers, any comments made have been incorporated into the report. 8. BACKGROUND PAPERS 8.1 LGBF Dashboards National Benchmarking Overview Report 2023/24 Elected Member Guidance: Understanding and Using the LGBF LGBF Indicators – Pentana backing tables Page 194
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APPENDIX 1 The Local Government Benchmarking Framework (LGBF) data provides evidence of trends in how resources are allocated, performance of services and levels of customer satisfaction. This year’s results introduce data from 2023/24. Exceptions based on 32 local authorities; areas of service delivery ranked in the lowest quartile are presented below as Notes to Benchmarking Results (appendix 3 refers). Care should be taken when making comparison over time and with others due to the complexities around altered delivery and operating landscapes during the reporting period. The National Benchmarking Overview Report 2023/24 is due to be published early April. No Challenges Actions to improve Outcome Children’s Services 1 Percentage of leavers entering positive destinations fell to 93.8% in 2023/24, dropping into the lowest quartile. Both national and family group averages decreased albeit to a lesser extent. • Getting it right for every child so that we continue to improve attainment for all Q3 update (65% complete) - Ongoing reporting to committee with interventions outlined and progress to date (ECLS in November – Secondary Senior Phase Attainment and in February – ACEL). Continue focus on raising attainment for all in line with resources available. • Further develop curriculum offer in senior phase including consortia arrangements Q3 update (65% complete) - Secondary Head Teacher Consortia sub-group formed and progressed at pace with almost all secondary schools offering SCQF level 7 (Advanced Higher) consortia offer to other schools (range of subjects) and some SCQF level 6 (Higher) as trial. Reinstatement of common column across Moray, building into course options with consortia options process finalised for the session. Further exploration of working with Aberdeen City Council through their ABZ Campus anytime course offer for interrupted learners/those learners requiring additional subjects. Improved attainment at both Broad General and Senior Phase identifies through ACEL and LGBF measures Increase in subjects, courses and accreditation 2,3,4,5,6,7 Tariff scores allow examination of how different ability cohorts are attaining in relation to the appropriate family and national cohorts by allocating a specific number of points to each qualification (including non- examination, unit-based courses). More demanding qualifications gain more points than less demanding ones and in graded courses, a grade ‘A’ is equivalent to more points than a grade ‘C’ for example, within the same course. The number of qualifications and units available for a young person to complete varies significantly due to the number of different curriculum structures there are across Scotland. In Moray, scores decreased overall and in all but one of SIMD Quintiles 1-5. Indicator rankings remain in the lowest quartile. Page 195
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(Source: Education Service Plan 2024-25) 8,9 The percentage of P1, P4 and P7 pupils combined achieving expected CFE Levels in Literacy and Numeracy made further improvement to 70.6% and 76.5% respectively, exceeding Stretch Aims targets and gaining ground on national averages. Support and challenge discussions between the central Quality Improvement Team and Head Teachers. Roll-out of Seemis Progress and Achievement for Tracking and Monitoring was completed in June 2023 and a data analysis tool (AnalyseM) was developed and training completed in December 2023. Indicator rankings remain in the lowest quartile. • Early intervention addressing whole family well-being to ensure that children can reach their full potential Through assessment and moderation activities, QAMSO (Quality Assurance and Moderation Support Officer) supports at school and ASG level as well as central quality improvement monitoring, we continue to support and challenge BGE ACEL level achievement and strengthening of practitioner confidence in their Teacher Professional Judgements. This includes through ASG moderation activities, Inset activities and a well planned range of interventions delivered at school level in order to strengthen learner attainment and achievement. Ongoing work to build and maintain improvement is detailed in the Initial Analysis of Achievement of Curriculum for Excellence Levels 2024 submitted to Education, Children’s and Leisure Service Committee on 18 February 2025 (item 10 of the agenda refers). (Source: Education Service Plan 2024-25) Improved attainment at both Broad General and Senior Phase identifies through ACEL and LGBF measures 10 Funded early years provision which is graded good/better fell slightly to 84.1%. The increase duty brings significant challenges around workforce expansion, building and expanding provision, whilst simultaneously maintaining and improving the quality is challenging, faced with significant shortages in the availability of qualified staff and seeing the average experience level of the workforce lowered. Indicator ranking remains in the lowest quartile. Early years provision not reaching grade 4 good/better receive support from the respective Continuous Improvement Officer and the Early Years Teaching and Learning Teacher to address the required actions resulting from recommendations or requirements. Improve quality of leadership, learning, teaching and assessment Improve self-evaluation profiles leading to change Corporate Services 11 The gender pay gap closed slightly from 5.3% to 4.6%. The gap is the percentage difference between men’s and women’s hourly pay. The positive figure indicates that male employees • Have in place fair and competitive pay and conditions that are recognised and free of bias Assessment of gender pay gap and equality issues Page 196
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are on average paid more per hour than female employees. Despite these small improvements, the result remains in the bottom quartile. Note: an error was made when submission of results was reversed, therefore the national data does not reflect the true position which has been corrected for local reporting. Albeit progress has been affected by staff absence, with progress on planned activity at 30% complete (Q3 update), slight improvement is accounted for due to continuing to offer flexible working opportunities to the workforce which encourages and supports females. Additionally with the regrading of Social Care Assistants, the council has seen a positive impact on the gender pay gap and this is supported by an increased number of females represented in Grade 10 and above posts. Work is rescheduled to begin in January 2025. (Source: HR & OD Service Plan 2024-25) 12 Teacher absence levels increased in 2023/24 to 9.6 days per teacher and are now higher than pre-pandemic levels and the highest recorded since benchmarking began. Pressures exacerbated by the pandemic, treatment delays and increasing mental health issues are compounded by skills shortages and recruitment challenges, all contributory factors to increased absence. Indicator ranking remains in the lowest quartile. Policy and practise review as well as supporting and developing wellbeing initiatives continue in response to these significant challenges. • Pro-actively support the health and well-being of employees through increased awareness of mental health. • Review proactive measure to reduce sickness including Day One notification for focus on short term absence. • Ensure revised operational implementation of absence management procedures are applied by managers. • Provide support for reducing incidents of violence and aggression in schools as set out in the agreed ASN action plan, working collaboratively with Trade Unions to identify specific actions to help address short term absence. Q3 update (75% complete) - Work is ongoing to devise a more targeted approach that will address absence. Improvements around implementing the policy at an operational level has been discussed at both the leadership forum and with the HR Advisers. A pilot has also been developed within Education which if rolled out could have some meaningful impact to the monitoring of absence within schools. A training and Absence is managed effectively, and levels of absence are reduced efficiently and timeously. Measures are deployed that support school-based staff to feel safe at work and feel equipped to manage challenging behaviour appropriately. Page 197
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refresher module is in development and monthly absence review meetings are in place, supported by a revised approach to case flow management allowing for improved monitoring and prioritisation. (Source: HR & OD Service Plan 2024-25) 13 Percentage of invoices sampled that were paid within 30 days remained unchanged at 89.4%. Of the 55k invoices sampled, 49k invoices were paid within 30 days, resulting in the indicator dropping back into lowest quartile. • Increase efficiency and availability of digital process for Payments; roll out e-Accounts Payable form Q3 update (100% complete) – E-Accounts Payable form now fully LIVE across all departments, any service submitting paper or email invoices are being advised to use the new system. (Source: Finance Service Plan 2024-25) Roll out e-Accounts Payable form Introduction of workflow to streamline process for Payments and service departments. More efficient and timely processing of invoices. Assets 14 There has been no change to 56.3% in the percentage of internal floor area of operational buildings in satisfactory condition. The Moray Learning Estate is a significant contributory factor to the operational building condition indicator and with half of the 53 schools having condition surveys and 31 categorised within the last 5 years as less than B condition (6 schools still to complete survey updates). Indicator ranking remains in the lowest quartile. • Tackle the affordability and standard of our learning estate to ensure sustainability while meeting climate requirements External consultant appointed to commence development of detailed asset management plans for up to 10 schools over a 6-month period with further planned for 2025/26. Moray Learning Estate Strategy 2022-2032 sets out the steps needed to develop a long-terms strategy for the learning estate. (Source: ERC Service Plan 2024-25) Moray has high performing schools that are fit for the future and financially and environmentally sustainable. Adult Social Work 15 The percentage of carers who feel supported in their caring role fell from 32% in 2021/22 to 28% in 2023/24. Indicator ranking has dropped into the lowest quartile. Taken as an extract from the Health & Care Experience Survey by Scottish Government. Moray Carers Strategy 2023-2026 contains three strategic priorities; Recognition for carers, Valuing carers, Supporting carers. Quarriers are contracted to continue delivering information, support, advice and to offer both Adult Carer Support Plans and Young Carer Statements. As of March 2024, 1130 unpaid adult and Carers in Moray feel recognised, listened to and respected as equal and expert partners in care, and to be supported in their vital role so they live well alongside caring. Page 198
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170 young carers registered with the service, of which 16 and 15 were receiving intense support respectively. Culture & Leisure 16 The cost per library visit has decreased to £5.44 due to a proportionately greater increase in the number of library visits to net expenditure. The service reviewed the virtual visit definition for this indicator in 2022/23 and are now counting launches or interactions with a page / post rather than the number having seen a page / post. Across Scotland, results range, perhaps suggesting there are similar variations in calculation methods. At the time of submitting attendance results, Indicator ranking remains in the lowest quartile. • Transform our Sport & Leisure, Libraries, Learning Centres & Heritage, Music Instruction & Performance service provision to ensure a sustainable council for the future Q3 update (93% complete) – The Change Management Plan has now been partially implemented. Several proposals for Change Management Plan have been paused until the outcome of the Libraries, Learning Centres and Heritage service redesign and savings proposals have been determined. (Source: ERC Service Plan 2024-25) Create a sustainable future for our services by: Engaging new users to access our service to be active and ensure prevention/early intervention improves their long-term health and wellbeing prospects. Engaging new users to access digital and physical resources and support to improve their lifelong learning experiences. Creative arts participation and pathways are further developed enhancing lifelong learning experiences. 17 The percentage of adults satisfied with Museums and Galleries (rolling 4 years) fell slightly to 57%. Indicator ranking dropped into the lowest quartile for the first time since 2018. Due to budgetary constraints, operation of the Moray Museum Service ceased on 1st April 2020 and the Falconer Museum with Store is closed until an alternative service model is established. The collection continues to be monitored and the buildings maintained. N/A Environmental Services 18 The percentage of adults satisfied with refuse collection (rolling 4 years) remained at 76%. Indicator has dropped back into the lowest quartile. Taken from the Scottish Household Survey from Scottish Government where around 10,500 households were interviewed with lower-than-expected response rates inferring the sample size may be small. Following an increase in complaints related to household collections, the service is reviewing to identify themes and causation. N/A Housing Services 19 In 2023/24, 1,444 of 6,380 (22.6%) properties within scope met the Scottish Housing Quality Standards (SQHS). Meeting energy efficiency elements is a significant part of SHQS. Indicator remains in the lowest quartile. • Continue to reduce the carbon impact arising from Housing and Property Services Q3 update (75% complete) – Housing Improvement Plan reported to Housing and Community Safety Committee on 7 May 2024 detailed plan to improve energy performance of our housing stock. Work Phased improvement of energy efficiency within corporate buildings and housing stock. Page 199
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progressing by internal contractor (DLO) and external contractors to undertake improvements. Final figure will be reported as part of the Annual Return on the Charter (ARC) to the Scottish Housing Regulator in April 2025. Significant investment has been undertaken extending to more than £6m on a variety of improvement measures including insulation and upgrading heating systems. Due to time lag in updating certification and method of reporting no interim figures are currently available that accurately present progress. (Source: Housing and Property Service Plan 2024-25) Economic Development 20 The percentage of unemployed people assisted into work from Council operated / funded employability Programmes more than halved to 4.3% with 65 people supported into work. Delays in confirmation of grant funds resulted in reduced numbers progressing into MERI Scheme, coupled with a reduction in applications from employers due to the inability within the Scheme to carry forward committed funds. Delays also meant the procurement of the new SWAP vocational skills was later than initially planned with the programme being active for only 6 of the intended 12 months. Increasing client mental health issues has also been a contributory factor with those affected being further away from entering employment. Job outcomes is just one of many other positive outcomes that were reported in 2023/24, for example, 90 started the SWAP programme, 102 engaged with personal development training and 50 progressed in college / university. In the previous 2 reporting years, due to Covid recovery measures, there was significant additional investment in employability, so higher-than-average numbers being assisted into employment were reported. With these challenges resolved for the 2024/25 reporting, figures to date show Job outcomes have increased, with the SWAP programme having a positive impact on results, the overall position continues to be closely monitored. Increase the number of individuals who are participating in learning, training and employment opportunities Page 200
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(Source: Economic Growth and Development Service Plan 2024-25) 21 The proportion of properties receiving superfast broadband increased slightly to 87.8%. Taken from Connected Nations Annual Report by OFCOM. According to a Scottish Government response, the rollout of the R100 broadband scheme will not be completed until 2028 in Moray. The programme is behind on initial time targets, The programme comprises of three strands of activity, the R100 contracts, R100 Scottish Broadband Voucher Scheme and continued expansion of commercial coverage, including emerging technologies such as Low Earth Orbit satellite connectivity. Conclude R100 contract delivery in Moray during 2028 Financial Sustainability 22 Financing Costs to Net Revenue Stream is an indicator of affordability, it highlights the revenue implications of existing and proposed capital expenditure by identifying the proportion of the revenue budget required to meet financing costs, net of investment income. Moray reported a ratio of 8.7. Indicator remains in the lowest quartile. Prudential Indicators are reported to Council and reflective the ongoing general requirement to increase borrowing to fund capital expenditure in the capital plan, particularly in the Learning Estate and the Moray Growth Deal. This is factored into the Council’s financial planning and is used as a tool for assessing affordability of the capital plan, Ensure a financially sustainable future 23 The need for budgets and forecasts to reflect actual spending becomes increasingly important with decreasing or lower levels of usable reserves to draw on and is measured in the Actual outturn as a percentage of budgeted expenditure. Moray achieved an Actual outturn of 97.1%. Indicator remains in the lowest quartile. Patterns of budgeting spend are impacted across all local authorities, albeit in different ways, although an increase in the level of reserves held was a common feature. Budget manager training, key to an accurate forecast was reviewed and updated. Ensure a financially sustainable future Page 201
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APPENDIX 2 Results improved / worsened (past 12 months for results published) Results that improved by 5% or > • The cost per Pre-School Education place reduced by 10% to £9,834, a 4% reduction in gross expenditure and a 6% increase in number of places contributory factors. • Tariff score in SIMD Quintile 2 improved by 7% to 620, albeit result remains in lowest quartile. • 14% reduction in the cost of collecting Council Tax per dwelling, due to an overall cost reduction and a slight increase in the number of dwellings. • An initial decision was made within 15 days for almost all Community Care Grants. • Proportion of Discretionary Housing Payments spent increased to 90%. • Reduced gross expenditure and a minor change in the number of long-stay residents supported has led to a reduction in the residential care home cost per week per resident. • Proportion of adult care services graded good or better improved to 81%. • The number of bed days people (75+) spend in hospital when ready to be discharged fell by 44%, against a slight increase in population (+75) leading to an improved delayed discharge rate. • Increased attendance and reduced net expenditure resulted in a reduced cost per attendance at sports facilities. • Proportionately greater increase in number of library visits than net expenditure reduced the cost per library visit. • Reduced cost of street cleaning due to decrease in net expenditure against a slight increase in estimated population. • Decreases in gross expenditure in Trading Standards and Environmental Health, has resulted in a decrease in cost per 1,000 population across both indicators. • Slight improvement in proportion of council dwellings meeting SHQS, the indicator remains in the lowest quartile. Results that worsened by 5% or > • Tariff scores dropped in five of six measures, and by over 5% in SIMD Quintile 1. All feature is the lowest quartile. • Sickness absence days for both Teacher and Employee (non-teacher) have increased, due to an increase in days lost and reduction (teachers) or minimal change to staff numbers. • £490k of Scottish Welfare Fund budget was spend, 112% of budget. • Homecare costs per hour for people aged 65 or over increased with a 27% increase in homecare expenditure against a slight increase in care hours. • Satisfaction relating to adult social care dropped in all four measures, and by over 5% in two measures. • Proportionately greater increase to parks and open spaces net expenditure than that of mid-year population estimate resulting in a greater cost per 1,000 population. • Cost of roads per kilometre increased slightly due to rise in gross expenditure, the indicator result remains in the top quartile. • Drop in proportion of adults satisfied with street cleaning based on 3 year rolled averages. • The percentage of unemployed people assisted into work from council employability programmes reduced by over 50% dropping into the lowest quartile. • Average time per business and industry planning application (weeks) increased slightly but result remains within the top quartile. • Gross expenditure on Economic Development & Tourism decreased from £8.2m to £7.4m, reducing investment per 1,000 population to £78k, performance remains below the national average and in the bottom quartile. • Total usable reserves as a percentage of annual budgeted revenue dropped to 19%. Page 202
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APPENDIX 3 Table Legend Relative Change Short Term Trend Rank 2021/22 2020/21 to 2021/22 Result to Previous Year Local Authorities (32) Family Group (8) Result improving by 5% or more improved 1st quartile 1st quartile Result worsened by 5% or more worsened 2nd quartile 2nd quartile no change 3rd quartile 3rd quartile N/A1 Data no longer collected nationally / locally N/A2 Result below 5; not published to protect confidentiality N/A3 Data not yet published 4th quartile 4th quartile Page 203
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Overview of Local Government Benchmarking Framework Indicator Results Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) Children’s Services (A) CHN 1: Cost per primary school pupil (£) 6,050 6,156 6,500 6,926 6,922 7,213 -0.1 9 2 CHN 2: Cost per secondary school pupil (£) 8,592 8,381 8,458 8,828 8,920 8,957 1.0 15 4 CHN 3: Cost per pre-school education place (£) 6,127 8,623 10,476 10,897 9,834 11,659 -9.8 5 3 CHN% of secondary pupils achieving 5 or more awards at Level 5 62 66 63 62 N/A3 % of secondary pupils achieving 5 or more awards at Level 6 34 34 30 28 N/A3 % of pupils living in the 20% most deprived areas Gaining 5+ awards at Level 5 N/A2 19 19 12 N/A3 % of pupils living in the 20% most deprived areas Gaining 5+ awards at Level 6 N/A2 19 19 12 N/A3 Gross Cost of “Children Looked After” in Residential Based Services per child per week (£) 5,748 5,417 4,564 3,155 N/A3 Gross Cost of “Children Looked After” in a Community Setting per child per week (£) 503 463 492 460 N/A3 % of children being looked after in the community 81.4 82.2 80.6 75.3 N/A3 % of adults satisfied with local schools (rolling 4 years) 77.0 79.3 79.3 76.7 73.0 70.7 -3.7 14 5 1 % of pupils entering positive destinations 93.1 94.1 96.2 95.1 93.8 95.7 -1.3 30 7 2 Overall average total tariff 799 877 886 841 831 918 -1.2 26 7 3 Overall average total tariff SIMD Quintile 1 939 887 735 571 378 658 -33.8 29 8 Page 204
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) 4 Overall average total tariff SIMD Quintile 2 687 635 637 581 620 762 6.7 30 7 5 Overall average total tariff SIMD Quintile 3 729 868 868 820 780 889 -4.9 31 7 6 Overall average total tariff SIMD Quintile 4 836 954 944 921 917 1,049 -0.4 29 7 7 Overall average total tariff SIMD Quintile 5 903 959 1,005 977 970 1,260 -0.7 29 7 8 % P1, P4 & P7 pupils combined achieving expected CFE Level in Literacy N/A1 63.9 65.1 67.9 70.6 74.0 2.7 28 6 9 % P1, P4 & P7 pupils combined achieving expected CFE Level in Numeracy N/A1 67.8 71.8 75.5 76.5 80.3 1.0 28 6 Literacy Attainment Gap (P1,4,7 combined) – percentage point gap between the least and most deprived pupils N/A1 19.8 26.3 32.1 N/A3 Numeracy Attainment Gap (P1,4,7 combined) – percentage point gap between the least and most deprived pupils N/A1 17.5 24.7 26.6 N/A3 % of children meeting developmental milestones 95.6 96.0 84.9 87.3 N/A3 10 % of funded early years provision which is graded good/better 78.3 85.2 86.9 87.5 84.1 89.8 -3.4 28 7 School attendance (%) N/A1 93.8 N/A1 91.2 90.8 90.3 -0.4 12 3 School attendance rates (LAC, %) N/A1 89.4 N/A1 83.4 N/A3 School exclusion rates per 1,000 pupils N/A1 14.2 N/A1 20.2 N/A3 School exclusion rates per 1,000 looked after children N/A1 125.0 N/A1 156.0 N/A3 Page 205
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) % participation for 16-19 year-olds 93.5 91.8 91.6 94.5 93.1 92.7 -1.4 17 7 % of child protection re-registrations within 18 months 7.5 2.3 9.8 0 N/A3 % LAC with more than 1 placement in the last year (Aug-July) 25.0 14.9 14.5 11.8 N/A3 % of children living in poverty (after housing costs) 23.4 21.3 24.1 23.9 N/A3 Corporate Services (B) Support Services as a % of Total Gross Expenditure 4.2 4.1 3.9 3.8 3.7 4.1 -0.1 14 5 % of the highest paid 5% employees who are women 54.7 61.1 62.7 59.5 61.2 59.8 1.7 10 4 11 The gender pay gap (%) 6.4 6.2 7.0 5.3 4.6 1.7 0.8 29 7 Cost of collecting Council Tax per dwelling 10.12 9.24 8.67 7.96 6.86 5.89 -13.8 17 4 12 Sickness Absence days per Teacher 6.8 4.5 6.0 7.9 9.6 7.6 21.4 29 7 Sickness Absence days per Employee (non- teacher) 12.7 8.7 11.1 12.8 14.0 13.9 8.9 17 5 % of income due from Council Tax received by the end of the year 97.0 95.8 96.7 96.7 96.2 95.5 -0.5 16 5 13 % of invoices sampled that were paid within 30 days 87.3 84.0 85.5 89.4 89.4 93.1 0.0 26 6 % of Crisis Grant Decisions within 1 day Note: 2024/25 result 99.5% 94.3 98.5 98.3 97.8 98.3 94.0 0.5 13 4 % of CCG Grant Decisions within 15 days Note: 2024/25 result 100.0% 85.3 91.0 95.0 89.3 98.0 83.3 8.7 15 5 Page 206
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) Proportion of SWF Budget Spent 84.3 64.3 99.0 123.9 111.5 128.9 -12.4 22 5 Proportion of DHP Funding Spent 91.3 90.6 75.6 79.8 90.0 101.0 10.2 23 4 Assets (B) % of operational buildings that are suitable for their current use 98.2 98.2 97.6 97.5 97.4 85.5 -0.1 1 1 14 % of internal floor area of operational buildings in satisfactory condition 53.9 66.9 54.9 56.3 56.3 89.8 -0.0 32 8 Adult Social W ork (A) Home Care costs per hour for people aged 65 or over (£) 40.98 32.30 26.74 25.27 31.5 33.61 24.7 12 4 Self-Directed Support spend on people aged 18 or over as a % of total Social Work spend on adults 4.1 5.0 3.6 4.6 4.8 9.0 0.2 20 6 % of people aged 65 or over with long term care needs receiving personal care at home 62.2 62.0 61.0 59.8 62.7 62.6 2.9 17 3 % of adults supported at home who agree that their services and support had an impact in improving or maintaining their quality of life (rolling 4 years) 79.2 73.3 69.3 69.8 -3.9 19 7 % of adults supported at home who agree that they are supported to live as independently as possible 82.7 79.3 71.9 72.4 -7.5 21 6 % of adults supported at home who agree that they had a say in how their help, care or support was provided 79.7 70.2 59.5 59.6 -10.7 20 7 15 % of carers who feel supported in their caring role 30.7 31.6 28.2 31.2 -3.4 26 7 Page 207
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) Residential costs per week per resident for people aged 65 or over (£) 461 578 490 673 556 723 -17.5 4 1 Rate of readmission to hospital within 28 days per 1,000 discharges (%) 77.7 100.9 85.9 80.5 76.5 103.9 -4.9 4 1 Proportion of care services graded ‘good’ (4) or better in Care Inspectorate inspections (%) 75.2 79.8 80.0 74.0 81.1 77.0 7.1 15 4 Number of days people spend in hospital when they are ready to be discharged, per 1,000 population (75+) 768 493 778 1058 952 846 -10.0 21 6 Culture & Leisure (B) Gross cost per attendance at Sports facilities (£) -0.31 21.74 2.94 2.58 1.80 4.35 -30.1 5 2 16 Cost per Library visit (£) 1.81 3.42 3.04 6.91 5.44 2.38 -21.3 28 6 Cost of Museums per visit (£) 2.41 N/A1 N/A1 N/A1 N/A1 Cost of Parks & Open Spaces (£) per 1,000 population 12,669 14,080 16,874 16,779 18,010 23,362 7.3 8 2 % of adults satisfied with Libraries (rolling 4 years) 77.6 82.9 82.3 79.3 78.0 67.0 -1.3 5 3 % of adults satisfied with Parks and Open Spaces (rolling 4 years) 82.4 85.1 85.7 86.3 85.3 85.0 -1.0 16 5 17 % of adults satisfied with Museums and Galleries (rolling 4 years) 60.1 64.1 62.3 58.3 57.0 69.3 -1.3 26 8 % of adults satisfied with Leisure Facilities (rolling 4 years) 66.7 72.4 74.7 71.3 69.7 67.0 -1.6 13 5 Enviro nment al Servic es (B) Net cost per Waste collection per premises (£) 44.98 40.42 37.41 41.08 39.97 78.72 -2.7 2 1 Net cost per Waste disposal per premises (£) 114.45 118.54 112.75 104.35 101.81 104.38 -2.4 13 3 Page 208
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) Net Cost of Street Cleaning (£) per 1,000 population 8,602 8,594 9,011 9,481 8,376 15,961 -11.6 4 1 Street Cleanliness Score N/A1 N/A1 N/A1 N/A1 N/A1 Cost of Maintenance per Kilometre of Roads (£) 8,019 4,998 5,708 6,801 7,337 13,788 7.9 6 1 % of A Class roads that should be considered for maintenance treatment (rolling 2 years) 29.2 26.6 23.2 24.1 26.8 28.9 2.7 13 3 % of B Class roads that should be considered for maintenance treatment (rolling 2 years) 25.8 22.3 18.3 18.4 21.0 32.5 2.6 5 1 % of C Class roads that should be considered for maintenance treatment (rolling 2 years) 25.2 21.3 19.3 20.6 22.7 33.4 2.1 5 1 % of unclassified roads that should be considered for maintenance treatment (rolling 2 years) 35.5 35.0 32.0 30.3 29.3 36.2 -1.0 3 1 Cost of trading standards and environmental health (£) per 1,000 population 23,342 22,203 26,647 24,759 23,513 22,804 -5.0 18 6 Cost trading standards, money advice & citizens advice (£) per 1,000 population 6,050 5,548 5,484 6,246 5,715 7,266 -8.5 10 3 Cost of environmental health (£) per 1,000 population 17,292 16,656 21,163 18,514 17,799 15,538 -3.9 21 6 % of total household waste arising that is recycled 59.0 54.9 52.2 57.8 55.2 43.5 -2.6 4 2 18 % of adults satisfied with refuse collection (rolling 4 years) 73.5 69.8 71.7 76.0 75.7 78.3 -0.3 25 7 % of adults satisfied with street cleaning (rolling 4 years) 58.6 58.3 58.7 62.7 57.7 58.0 -5.0 23 8 Page 209
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) Housing Services (A) Gross rent arrears (all tenants) as at year end as a % of rent due for the reporting year 2.6 3.2 3.8 4.5 4.7 9.5 0.2 2 1 % of rent due in the year that was lost due to voids 0.9 1.2 1.2 1.0 0.7 1.8 -0.3 5 1 19 % of council dwellings meeting Scottish Housing Quality Standard 90.7 93.8 6.3 15.5 22.6 77.8 7.1 26 6 Average number of days to complete non- emergency repairs 9.5 6.1 8.0 5.7 5.7 10.0 -1.3 2 1 % of council dwellings that are energy efficient 54.6 57.4 60.4 N/A3 N/A3 Economic Development (B) 20 % Unemployed People Assisted into work from Council operated / funded Employability Programmes 0.6 5.3 5.9 10.1 4.3 12.1 -5.8 31 7 Cost per Planning Application 4,809 5,208 5,624 6,700 6,667 6,679 -0.5 18 2 Average time (Weeks) per Planning Application 6.4 6.7 6.2 6.3 7.2 10.7 15.5 3 2 % of procurement spent on local small / medium enterprises 21.9 23.6 25.2 24.8 23.6 30.7 -1.2 21 5 No of business gateway start-ups per 10,000 population 16.5 9.6 12.7 11.3 11.0 13.6 -2.7 23 7 Investment in Economic Development & Tourism per 1,000 population (£) 38,411 40,456 49,193 86,881 77,786 118,765 -10.5 24 7 Proportion of people earning less than the living wage (%) 24.0 21.5 19.4 13.8 14.4 10.2 0.6 14 2 21 Proportion of properties receiving superfast broadband (%) 84.7 85.7 85.6 87.2 87.8 95.9 0.6 27 8 Page 210
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) Town Vacancy Rates (%) 6.9 10.9 10.6 10.6 14.1 12.3 3.5 22 6 Immediately available employment land as a % of total land allocated for employment purposes in the local development plan 24.2 34.8 14.9 14.9 14.9 24.5 0.0 20 4 Gross Value Added (GVA) per capita (£) 23,742 22,380 23,172 24,282 N/A3 Claimant count as a % of working age population (%) Note: 2024/25 result 2.2 2.5 4.9 3.7 2.4 2.2 3.1 -2.3 7 1 Claimant count as a % of 16-24 population (%) Note: 2024/25 result 2.6 3.7 7.1 4.7 3.0 2.7 3.3 -2.5 10 2 Financial Sustainability (B) Total useable reserves as a % of council annual budgeted net revenue 15.0 25.1 26.3 24.8 19.0 23.9 -5.8 24 4 Uncommitted General fund Balance as a % of council annual budgeted net revenue 7.5 7.2 2.2 2.1 2.3 2.3 0.2 14 5 22 Ratio of Financing Costs to Net Revenue Stream 9.5 8.0 8.3 8.7 8.7 5.8 0.0 27 7 Ratio of Financing Costs to Net Revenue Stream – Housing Revenue Account 21.5 21.6 20.7 22.0 23.6 20.0 1.6 15 6 23 Actual outturn as a % of budgeted expenditure 96.0 89.6 91.1 93.4 97.1 99.6 3.7 29 7 Climate Change (B) CO2 emissions area wide per capita 4.88 4.0 4.83 4.64 N/A3 CO2 emissions area wide: emissions within scope of LA per capita 7.26 6.34 7.17 6.94 N/A3 CO2 emissions from Transport per capita 37.2 29.6 36.12 44.79 N/A3 CO2 emissions from Electricity per capita 41.81 30.65 33.6 30.91 N/A3 CO2 emissions from Natural Gas per capita 46.01 45.98 50.1 45.83 N/A3 Page 211
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Note Indicator Description Moray National Average Relative Change 2022/23 to 2023/24 Rank 2023/24 2019/20 2020/21 2021/22 2022/23 2023/24 2023/24 % change Short Term Trend Nat (32) FG (8) Page 212