Agenda Document Pack - Moray Integration Joint Board - 30/10/2025
Moray Council · 30 October 2025
Back to Moray Integration Joint Board — 30 October 2025 and its agenda
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Moray Integration Joint Board Thursday, 30 October 2025 Council Chambers NOTICE IS HEREBY GIVEN that a Meeting of the Moray Integration Joint Board, Council Chambers, Council Office, High Street, Elgin, IV30 1BX on Thursday, 30 October 2025 at 09:30 to consider the business noted below. AGENDA 1. Welcome and Apologies 2. Declaration of Member's Interests 3. External Auditors' Report to those charged with Governance 5 - 76 4. 2024-25 Audited Annual Accounts 77 - 146 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 1
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MORAY INTEGRATION JOINT BOARD SEDERUNT Mr Dennis Robertson (Chair) Councillor Peter Bloomfield (Voting Member) Councillor Scott Lawrence (Voting Member) Mr Derick Murray (Voting Member) Councillor Bridget Mustard (Voting Member) Mr Sandy Riddell (Voting Member) Mr Alex Stephen (Voting Member) Councillor Ben Williams (Voting Member) Dr Adam Coldwells (Ex-Officio) Ms Karen Greaves BEM (Ex-Officio) Mr Ivan Augustus (Non-Voting Member) Professor Duff Bruce (Non-Voting Member) Mrs Sheila Brumby (Non-Voting Member) Mr Sean Coady (Non-Voting Member) Ms Sonya Duncan (Non-Voting Member) Ms Jane Ewen (Non-Voting Member) Dr Robert Lockhart (Non-Voting Member) Mr Jim Lyon (Non-Voting Member) Ms Aimee McIntosh (Non-Voting Member) Ms Deborah O'Shea (Non-Voting Member) Ms Judith Proctor (Non-Voting Member) Mr Michael Ritchie (Non-Voting Member) Ms Elizabeth Robinson (Non-Voting Member) Clerk Name: Caroline O'Connor Clerk Telephone: 07779 999296 Clerk Email: committee.services@moray.gov.uk Page 3
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REPORT TO: MORAY INTEGRATION JOINT BOARD ON 30 OCTOBER 2025 SUBJECT: EXTERNAL AUDITORS’ REPORT TO THOSE CHARGED WITH GOVERNANCE BY: CHIEF FINANCIAL OFFICER 1. REASON FOR REPORT 1.1 To request the Moray Integration Joint Board (MIJB) consider the reports to those charged with governance from the Board’s External Auditor for the year ended 31 March 2025. 2. RECOMMENDATION 2.1 It is recommended that the MIJB considers and notes the reports from the External Auditor within APPENDICES 1 and 2. 3. BACKGROUND 3.1 The responsibilities of Audit Scotland as the independent auditor are established by the Local Government (Scotland) Act 1973, the code of Audit Practice (2021), which can be found at Code of Audit Practice and supplementary guidance, and are supported by the auditing profession’s ethical guidance. 4. KEY MATTERS RELEVANT TO RECOMMENDATION 4.1 The work carried out by Grant Thornton during 2024/25 has produced two reports that are subject to the consideration of those charged with governance. The reports are attached as follows: • Independent Auditors Report to those charged with governance (APPENDIX 1) • The Annual Audit Report 2024/25 (APPENDIX 2) 4.2 The audit opinions expressed were all unqualified and are reported within the ‘independent auditors report’ included within APPENDIX 1. Item 3. Page 5
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4.3 The Annual Audit Report included at APPENDIX 2 provides an Action Plan where recommendations for improvement are made, based on the findings of the review. These recommendations have been discussed with management and corresponding actions have been agreed, together with timescales for completion. 4.4 The Annual Audit Report provides a summary of the significant audit risks identified during planning. The results and conclusions of this work are noted within the report. 5. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) and Moray Integration Joint Board Strategic Plan “Partners in Care 2022 – 2032” The work of the external auditor and the production of these reports for those charged with governance have been completed within the specified timescales agreed. (b) Policy and Legal The Public Bodies (Joint Working ) (Scotland) Act 2014 requires that the Moray Integration Joint Board (MIJB) is subject to the audit and accounts provisions of a body under Section 106 of the Local Government (Scotland) Act 1973. (c) Financial implications There are no direct financial implications arising from this report. (d) Risk Implications and Mitigation The external auditor, Grant Thornton, through the audit process, provides assurance to the Board that the Annual Accounts for 2024/25 give a true and fair view of the financial position. The Annual Audit Report highlights risks identified during the audit process and recommendations for action that have been agreed by management. (e) Staffing Implications None arising directly from this report. (f) Property None arising directly from this report (g) Equalities/Socio Economic Impact None arising directly from this report as there has been no resultant policy change. (h) Climate Change and Biodiversity Impacts There are no direct climate change and biodiversity implications as there has been no change to policy. (i) Directions Page 6
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None arising directly from this report (j) Consultations Consultation has taken place between Grant Thornton and the Chief Financial Officer of the MIJB in preparation of the Annual Audit Report. Any comments received have been considered in writing this report. 6. CONCLUSION 6.1 The External Auditor has issued an unqualified opinion for the 2024/25 Annual Accounts. The Annual Audit Report, Independent Auditors’ Report and the Letter of Representation present the full findings. Author of Report: Deborah O’Shea, Chief Financial Officer Background Papers: with author Ref: Page 7
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APPENDIX 1 Independent auditor’s report to the members of Moray Integration Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements We certify that we have audited the financial statements in the annual accounts of Moray Integration Joint Board for the year ended 31 March 2025 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet and notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 (the 2024/25 Code). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Board as at 31 March 2025 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2024/25 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Accounts Commission on 18 May 2022. Our period of appointment is five years, covering 2022/23 to 2026/27. We are independent of the Board in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance Page 8
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APPENDIX 1 with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the Board. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Board’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the Board’s current or future financial sustainability. However, we report on the Board’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement We report in our Annual Audit Report the most significant assessed risks of material misstatement that we identified and our judgements thereon. Responsibilities of the Chief Financial Officer and Moray Integration Joint Board for the financial statements As explained more fully in the Statement of Responsibilities, the Chief Financial Officer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Chief Financial Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Chief Financial Officer is responsible for assessing the Board’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the Board’s operations. The Moray Integration Joint Board is responsible for overseeing the financial reporting process. Page 9
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APPENDIX 1 Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Board; • inquiring of the Chief Financial Officer as to other laws or regulations that may be expected to have a fundamental effect on the operations of the Board; • inquiring of the Chief Financial Officer concerning the Board’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Board’s controls, and the nature, timing and extent of the audit procedures performed. Page 10
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APPENDIX 1 Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report We have audited the parts of the Remuneration Report described as audited. In our opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Chief Financial Officer is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent Page 11
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APPENDIX 1 explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In our opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which we are required to report by exception We are required by the Accounts Commission to report to you if, in our opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to our responsibilities for the annual accounts, our conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in our Annual Audit Report. Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do Page 12
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APPENDIX 1 not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Angela Pieri, (for and on behalf of Grant Thornton UK LLP), 120 Bothwell Street, Glasgow, G2 7JS Date: Page 13
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Moray Integration Joint Board Annual Audit Report Financial year ending 31 March 2025 17 October 2025 Prepared for those Charged with Governance and the Controller of Audit Page 14
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow GUIDANCE NOTES: Table of contents does not update automatically • Please delete or factor in any instruction slides at the start of the deck before pagination • Please populate the page numbers manually before distributing Table of contents 2 01 Headlines 03 02 Introduction 06 03 Audit of the annual report and accounts 09 04 Wider scope and best value conclusions 22 Appendices A Audit adjustments 47 B Action plan and recommendations – wider scope 49 C Follow up of prior year audit recommendations 51 D Audit fees, ethics and independence 58 E Client Service Review 60 F Communication of audit matters 61 Tip – Select View/Outline View, Right click and select "Collapse" and copy slide titles then paste into your table of conents Don’t forget to change the footer 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 external 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 the Council or all weaknesses in your internal controls. This report has been prepared solely for your benefit and Audit Scotland (under the Audit Scotland Code of Audit Practice 2021). We do not accept any responsibility for any loss occasioned to any third part 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.Page 15
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Headlines01 Page 16
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Financial statements
Under International Standards of Audit (UK) (ISAs) and Audit Scotland’s Code of
Audit Practice ('the Code'), we are required to report whether, in our opinion:
• the IJB’s financial statements give a true and fair view of the state of affairs of
the IJB as at 31 March 2025 and of the income and expenditure of the
organisation for the year then ended;
• the IJB’s financial statements have been properly prepared in accordance with
UK adopted international accounting standards, as interpreted and adapted
by the 2024/25 Code;
• the IJB’s financial statements have been prepared in accordance with the
requirements of the Local Government (Scotland) Act 1973, The Local Authority
Accounts (Scotland) Regulations 2014, and the Local Government in Scotland
Act 2003; and
• the audited part of the Remuneration Report has been properly prepared in
accordance with The Local Authority Accounts (Scotland) Regulations 2014.
We are required to report whether the information given in the Management
Commentary is consistent with the financial statements and has been prepared
in accordance with statutory guidance issued under the Local Government in
Scotland Act 2003.
We are also required to report on whether the information given in the Annual
Governance Statement is consistent with the financial statements and prepared
in accordance with the Delivering Good Governance in Local government:
Framework (2016).
We have concluded that the Remuneration Report has been prepared in
accordance with requirements.
We have concluded the work on the Governance Statement has been prepared in
accordance with the relevant guidance.
We have concluded that the other information to be published alongside the
financial statements is consistent with our knowledge of the IJB.
Draft financial statements
The draft financial statements were presented for audit by the deadline of 30
June 2025, with the IJB authorising their financial statements on 24 June 2025.
We have been supported by Moray IJB’s officers during the audit process with
effective working relationships and commitment to the audit process.
We have completed our audit work and subject to the satisfactory completion of
outstanding items outlined at page 6, we anticipate issuing an unmodified
opinion on 30 October 2025.
The working papers presented for audit were a good quality, and any
supplementary working papers, sample requests and queries were responded to
effectively.
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This table summarises the key findings and other matters arising from the external audit of Moray Integration Joint Board (IJB) and the preparation of the
financial statements for the year ended 31 March 2025 for those charged with governance (the Board) and the Controller of Audit.
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Headlines (2) Financial statements Wider scope and best value arrangements Our audit work was substantially completed during September 2025. Our findings are summarised on pages 8 to 17. We have identified no adjustments or unadjusted misstatements to the primary financial during the course of the audit. Further detail is set out within Appendix 1 including minor disclosure adjustments. We have not identified any financial statements recommendations for management as a result of our audit work on the financial statements, and there were no recommendations for follow up from the previous audit. We would like to take this opportunity to record our appreciation for the assistance provided by the Chief Financial Officer and other staff in completing the external audit. Under the Audit Scotland Code of Audit Practice (‘the Code’), the scope of public audit extends beyond the audit of the financial statements. The Code requires auditors to consider the IJB’s arrangements in respect of financial management, financial sustainability, vision leadership and governance and use of resources to improve outcomes. In our External Audit Plan for the year ended 31 March 2025, we documented our assessment of the wider scope risks and planned audit work. At the planning stage, we identified one risk in respect of financial sustainability. We outline our work undertaken in response to the arrangements in place and the risks identified and conclude on the effectiveness and appropriateness of the arrangements in place based on the work carried out. There remains a significant risk in respect of financial sustainability given the significant financial challenges the IJB faces over the longer term. Further details of the work undertaken are outlined on pages 23 to 45. We have raised two recommendations for management as a result of our audit work on wider scope. These are set out in Appendix B. We have followed up the twelve recommendations raised in our previous audit. Six out of twelve recommendations have been cleared with one in progress and five still open. The clearance of the remaining recommendations will be followed up in 2025/26. This is the fourth year in succession that Internal Audit have provided a limited assurance opinion, indicating there are weaknesses in the framework of governance, risk management and control. A number of the recommendations made by internal audit span multiple years and the IJB must ensure that audit recommendations are actioned in a timely manner. Due to the level of follow up work and the amount of work required for wider scope, as indicated in our Audit Plan we have levied £2,500 additional audit fee as noted on page 59. Integration Joint Board’s have a statutory duty to have arrangements to secure Best Value. The IJB have arrangements in place to meet the Best Value obligations, however these could be strengthened by completing an assessment of the arrangements against the Best Value assurance framework, with the outcome being reported to the Audit, Performance and Risk Committee at the end of each financial year. 5 Page 18
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Headlines (3) Status of Audit Work Our work is substantially complete, and at this stage there are no matters of which we are aware that would require modification of our audit opinion. subject to the finalisation of the following outstanding matters : • finalisation of review of disclosures and accounting policies within the financial statements and annual report In addition, the usual closing processes at the final stages of the audit process will need to be performed as listed below: • receipt of management representation letter • review of the final set of financial statements • receipt of final signed financial statements • final sign off by the engagement lead • receipt of management’s updated going concern and post balance sheet events assessment at the date of sign off. We would like to take this opportunity to record our appreciation for the assistance provided by the finance team. 6 Page 19
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Introduction02 Page 20
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Introduction Scope of our audit work Our work has been undertaken in accordance with International Standards of Auditing (ISAs) (UK) and the Code. This report is addressed to the IJB and the Controller of Audit and will be published on Audit Scotland's website www.audit-scotland.gov.uk in due course. This report is a summary of our findings from our external audit work for the financial year at Moray IJB. The scope of our audit was set out in our External Audit Plan dated 27 March 2025. The core elements of our audit work in 2024/25 have been: • An audit of the IJB’s annual report and accounts for the financial year ended 31 March 2025 [findings reported within this report]; • Consideration of the wider dimensions that frame the scope of public audit as set out in Audit Scotland’s Code of Audit Practice 2021 (‘the Code’) [within this report]; • Any other work requested by Audit Scotland. Responsibilities The IJB has primary responsibility for ensuring the proper financial stewardship of public funds. This includes preparing annual accounts in accordance with proper accounting practices. The IJB is also responsible for compliance with legislation, and establishing arrangements over governance, propriety and regularity that enable it to successfully deliver its objectives. Our responsibilities as independent auditors, appointed by the Accounts Commission, are set out in the Local Government in Scotland Act 1973, the Code and supplementary guidance, and International Standards on Auditing in the UK. The recommendations or risks identified in this report are only those that have come to our attention during our normal audit work and may not be all that exist. Communication in this report of matters arising from the audit or of risks or weaknesses does not absolve officers from their responsibility to address the issues raised and to maintain an adequate system of control. Adding value through our audit work We aim to add value to the IJB throughout our audit work. We do this through using our wider public sector knowledge and we invited IJB officers to our annual local government accounting workshop. Through our expertise, we provide constructive, forward-looking recommendations where we identify areas for improvement and encourage good practice around financial management and financial sustainability, risk management and performance monitoring. In so doing, we aim to help the IJB promote improved standards of governance, better management and decision making, and more effective use of resources. 8 Page 21
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Audit of the annual report and accounts 03 Page 22
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Audit of the annual report and accounts Approach to the audit of financial statements Key audit matters and significant risks The following significant risks have been identified: • Management override of controls (significant risk). No key audit matters have been identified. Internal control environment In accordance with ISA requirements, we have developed an understanding of the IJB’s control environment. Our audit is not controls based and we have not placed reliance on controls operating effectively as our audit is substantive in nature. In accordance with ISAs, over those areas of significant risk of material misstatement we consider the design of controls in place. However, we do not place reliance on the design of controls when undertaking our substantive testing. We identified no material weaknesses or areas of concern from this work which would have caused us to alter the planned approach as documented in our plan. Recap of our audit approach and key changes in our audit strategy We have not identified any changes in our approach since our Audit Plan was presented to the Audit, Performance and Risk Committee on 27 March 2025. The risks identified remain the same. 10 Key audit matters Scoping Materiality Page 23
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Our application of materiality We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report. 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. Our audit approach was set out in our audit plan. • We reviewed and updated our assessment of materiality from planning based upon your 2024/25 draft financial statements and concluded that materiality is £5.278 million (PY £4.056 million), which equates to approximately 2.5% (PY 2%) of 2024/25 gross expenditure. • Performance materiality was set at £3.943 million (PY £3.042 million) representing 75% of our calculated materiality (PY 75%). • We report to Officers (Management) any difference identified over £0.263 million representing 5% of our calculated materiality (PY £0.203 million). • Due to the public interest in senior officer remuneration disclosures, we apply specific audit procedures to this work and set a lower materiality level for this area of £25,000 (PY £25,000). We design our procedures to detect errors in specific accounts at a lower level of precision which we have determined to be applicable for senior officer remuneration disclosures. We evaluate errors in the remuneration report for both quantitative and qualitative factors against this lower level of materiality. We will apply heightened auditor focus on the completeness and clarity of disclosures in this area and will request amendments to be made if any errors exceed the threshold we have set or would alter the bandings reported for any individual. There is a change in materiality values since our final audit plan was communicated to you on 27 March 2025 as final gross expenditure for 2024/25 was used as the basis of the calculation. The percentage chosen for higher materiality, performance materiality and triviality remains unchanged. 11 Page 24
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: • We obtained an understanding of the legal and regulatory frameworks that are applicable to Moray IJB and determined that the most significant which are directly relevant to specific assertions in the financial statements are those related to the reporting frameworks; International Financial Reporting Standards and the 2024/25 Local Government Accounting Code of Practice. • We enquired of Senior Officers and the Chair of the Audit, Performance and Risk Committee, concerning the IJB’s policies and procedures relating to the identification, evaluation and compliance with laws and regulations; the detection and response to the risks of fraud; and the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations. • We enquired of Senior Officers and the Chair of the Audit, Performance and Risk Committee, whether they were aware of any instances of non-compliance with laws and regulations or whether they had any knowledge of actual, suspected or alleged fraud. • We assessed the susceptibility of the IJB’s financial statements to material misstatement, including how fraud might occur, by evaluating officers incentives and opportunities for manipulation of the financial statements. This included the evaluation of the risk of management override of controls. We determined that the principal risks were in relation to journal entries that altered the IJB’s financial performance for the year and potential management bias in determining accounting estimates. Our audit procedures are documented within our response to the significant risk of management override of controls below. These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. However, detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as those irregularities that result from fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. The team communications in respect of potential non-compliance with relevant laws and regulations, included the potential for fraud in in certain account balances and significant accounting estimates. In assessing the potential risks of material misstatement, we obtained an understanding of: − Moray IJB’s operations, including the nature of its operating revenue and expenditure and its services and of its objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement. − The IJB’s control environment, including the policies and procedures implemented by the organisation to ensure compliance with the requirements of the financial reporting framework. 12 Page 25
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Overview of audit risks The table below summarises the key audit matters, significant and other risks discussed in more detail on the subsequent pages. Significant risks are defined by ISAs (UK) as an identified risk of material misstatement for which the assessment of inherent risk is close to the upper end of the spectrum due to the degree to which risk factors affect the combination of the likelihood of a misstatement occurring and the magnitude of the potential misstatement if that misstatement occurs. A significant risk can be a significant risk due to error or due to fraud. For the purposes of the ISAs (UK), the auditor is concerned with fraud or suspected fraud that causes a material misstatement in the financial statements. Two types of intentional misstatements are relevant to the auditor – misstatements resulting from fraudulent financial reporting and misstatements resulting from misappropriation of assets. As part of our consideration of risks relating to fraudulent financial reporting, we consider the potential for override of controls or other inappropriate influence over the financial reporting process, such as efforts by management to manage income and expenditure in order to influence the IJB’s year-end performance. 13 Risk title Risk level Change in risk since audit plan Fraud risk Key audit matter Level of judgment or estimation uncertainty Testing approach Status of work to date Management override of controls Significant ✓ Low Substantive Green ↑ Assessed risk increased since Audit Plan Assessed risk consistent with Audit Plan ↓ Assessed risk decreased since Audit Plan Not considered likely to result in material adjustment or change to disclosures within the financial statements Potential to result in material adjustment or significant change to disclosures within the financial statements Likely to result in material adjustment or significant change to disclosures within the financial statements. Page 26
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Significant risks and key audit matters Responding to significant financial statement risks 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. This section provides commentary on the significant audit risks communicated in the External Audit Plan. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the IJB’s financial statements of the current year and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters include those that had the greatest effect on: • the overall audit strategy; • the allocation of resources in the audit; and • directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. There were no key audit matters identified. Other risks Other risks are, in the auditor's judgement, those where the risk of material misstatement is lower than that for a significant risk, but they are nonetheless an area of focus for our audit. There were no other risks identified as part of our procedures. 14 Description Audit reponse Disclosures Key observations KAM Page 27
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Significant risks and key audit matters (2) 15 Significant risks identified in our Audit Plan Commentary 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 as a significant risk of material misstatement. This relates to the elements involving consolidation, after the information is extracted from partner ledgers, to produce the financial statements for Moray IJB. We have considered the design of controls in place over key accounting estimates and judgements through performance of walkthrough procedures and planning inquiries with management. In doing this work, we have concluded there are no significant estimates and judgements within the Annual Report and Accounts. This is appropriately disclosed within the IJB’s accounting policies and in line with our understanding of an IJB organisation. Across our public sector clients, we look to understand and test the control environment over journals including target testing journals on a risk assessment basis to ensure no management override of control that could result in fraud or material error. Therefore, we have: • documented our understanding of and evaluated the design effectiveness of management’s key controls over journals within Moray Council and NHS Grampian; • considered our journals testing within the NHS and the Council (as the external auditor of both organisations); • understood how the IJB accounts were produced and whether there is an opportunity or incentive for management to override controls to show an improved IJB financial performance through financial reporting; • gained an understanding of the critical judgements applied by management in the preparation of the financial statements and considered their reasonableness; • gained an understanding of the key accounting estimates made by management and • evaluated the rationale for any changes in accounting policies, estimates or significant unusual transactions Conclusion Through our audit procedures performed, we found that there was no evidence of management override of controls. We have placed reliance upon the journals work completed on the Moray Council and NHS Grampian audits where recommendations were made on each around the journal authorisation process. As the IJB’s financial statements are prepared by merging the relevant transactions from Moray Council and NHS Grampian, we have agreed the figures to underlying joint ledger reports to confirm accuracy and completeness. We did not identify indication of fraud or inappropriate management bias that could result in a material misstatement.Page 28
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Significant risks and key audit matters (3) 16 Significant risks identified in our Audit Plan Commentary The revenue cycle includes fraudulent transactions As set out in ISA (UK) 240 (Revised May 2021), 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) Auditing standards require us to consider the risk of fraud in revenue. This is considered a presumed risk in all entities. Having considered the risk factors set out in ISA 240 and the nature of the revenue streams at Moray IJB, we have determined that the risk of fraud arising from revenue recognition can be rebutted as there is deemed to be little incentive to manipulate revenue recognition and opportunities to manipulate revenue recognition are deemed to be limited. As part of our work on material transactions and balances, we have agreed revenue balances to assurance letters provided confirming the balances at NHS and Council level as well as an assessment of the income recognition accounting policies and relevant disclosures. Conclusion Our work has not identified any issues to raise in relation to revenue recognition. Risk of fraud in expenditure As set out in practice note 10 (Revised 2022) ‘The Audit of Public sector Financial Statements’, issued by the Public Audit Forum, which applies to all public sector entities, we consider there to be an inherent risk of fraud in expenditure recognition. (rebutted) Having considered the risk factors set out in PN10 and the nature of the expenditure streams at Moray IJB, we have determined that the risk of fraud arising from expenditure recognition can be rebutted as opportunities to manipulate expenditure recognition are deemed to be limited. As part of our work on expenditure, we have agreed revenue balances to assurance letters provided confirming the balances at NHS and Council level. We have also reviewed expenditure recognition accounting policies and relevant disclosures. Conclusion Our work has not identified any issues to raise in relation to expenditure recognition. Page 29
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Financial statements – key judgements and estimates 17 As required in the IJB’s accounting policies, officers outline critical judgements in applying accounting policies and in addition, assumptions about the future and other sources of estimation uncertainty. In particular, where estimates and judgements are identified, these should be quantified. This section provides commentary on key estimates and judgments in line with the enhanced requirements for auditors. Significant judgement or estimate Summary of management’s approach Audit Comments Assessment None The note within the IJB accounting policies (Note 2 Critical Judgements and Estimation Uncertainty) confirms there are no judgements or estimates within the IJB accounts. We have confirmed there are no significant estimate or judgements within the IJB annual reports and accounts. Not Applicable Page 30
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Other key elements of the financial statements 18 There were other key areas of focus during our audit. Whilst not considered a significant risk, these are areas of focus either in accordance with the Audit Scotland Code of Audit Practice (2021) or ISAs or due to their complexity or importance to the user of the accounts: Issue Commentary Matters in relation to fraud and irregularity It is the IJB’s responsibility to establish arrangements to prevent and detect fraud and other irregularity. As auditors, we obtain reasonable assurance that the financial statements as a whole are free from material misstatement, whether due to fraud or error. We obtain annual representation from officers and those charged with governance regarding the IJB’s assessment of fraud risk, including internal controls, and any known or suspected fraud or misstatement. We have also made inquires of internal audit around internal control, fraud risk and any known or suspected frauds in year. We have not been made aware of any incidents in the period and no issues in relation to these areas have been identified during the course of our audit procedures that are outside of the usual expected investigations. Accounting practices We have evaluated the appropriateness of Moray IJB’s accounting policies, accounting estimates and financial statement disclosures. We have identified disclosure adjustments required to the financial statements which have been detailed in Appendix 1. Matters in relation to related parties We are not aware of any other related parties or related party transactions which have not been disclosed. The principal related parties are Moray Council and NHS Grampian. Matters in relation to laws and regulations You have not made us aware of any significant incidences of non-compliance with relevant laws and regulations and we have not identified any incidences from our audit work. We have not identified any cases of money laundering or fraud at the IJB. Other information We are required to give an opinion on whether the other information published together with the audited financial statements (including the Annual Report), is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. Minor amendments have been made to the Annual Report and we are satisfied that there are no material inconsistencies to report. As these are minor, they do not warrant separate reporting. Page 31
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Other key elements of the financial statements (2) 19 Issue Commentary Governance statement We are required to report on whether the information given in the Annual Governance Statement is consistent with the financial statements and prepared in accordance with the Delivering Good Governance in Local government: Framework (2016). No inconsistencies have been identified; we plan to issue an unmodified opinion in this respect. Minor amendments were processed in the Statement, and these have been noted within Appendix A. Matters on which we report by exception We are required by the Accounts Commission to report to you if, in our opinion: adequate accounting records have not been kept; or the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or we have not received all the information and explanations we require for our audit or there has been a failure to achieve a prescribed financial objective. We have nothing to report in respect of these matters. Written representations A letter of representation has been requested from the Integration Joint Board as required by auditing standards. We have not requested any specific representations in this letter. Going Concern In performing our work on going concern, we have had reference to Statement of Recommended Practice – Practice Note 10: Audit of financial statements of public sector bodies in the United Kingdom (Revised 2022). The Financial Reporting Council recognises that for particular sectors, it may be necessary to clarify how auditing standards are applied to an entity in a manner that is relevant and provides useful information to the users of financial statements in that sector. Practice Note 10 provides that clarification for audits of public sector bodies. Practice Note 10 states that if the financial reporting framework provides for the adoption of the going concern basis of accounting on the basis of the anticipated continuation of the provision of a service in the future, the auditor applies the continued provision of service approach set out in Practice Note 10. The financial reporting framework adopted by the Integration Joint Board meets this criteria, and so we have applied the continued provision of service approach. In accordance with Audit Scotland guidance: Going concern in the public sector, we have therefore considered management’s (senior officer’s) assessment of the appropriateness of the going concern basis of accounting and conclude that: a material uncertainty related to going concern has not been identified management’s (senior officer’s) use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Page 32
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Other responsibilities under the Code (1) 20 Issue Commentary WGA return For local government audits, we are required to complete Whole of Government Accounts (WGA) work and provide an assurance statement on the WGA return as mandated by National Audit Office. The IJB will fall under its parents return (Moray Council).We will complete the relevant specified procedures and prepare and submit a partial assurance statement once we have completed all our work on Moray Council’s financial statements, and when the final guidance is received. Health board consolidation For health boards, we are required to under the Code of Audit Practice to examine and report on the consolidation schedules. The IJB expenditure for NHS Grampian was included within the health board consolidation process and this was submitted as part of our work on NHS Grampian’s financial statements. Other returns to Audit Scotland In accordance with the Audit Scotland Planning Guidance, as appointed auditors we have prepared and submitted Fraud Returns and Current Issues Returns to Audit Scotland, sector annual reports, shared intelligence on health and social care, sector meetings and Technical Guidance Notes. There is nothing we need to bring to your attention in this respect. Page 33
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Other findings – information technology Assessment - Significant deficiencies identified in IT controls relevant to the audit of the financial statements. - Non-significant deficiencies identified in IT controls relevant to the audit of the financial statements / significant deficiencies identified with sufficient mitigation of risk. - IT controls relevant to the audit of financials statements judged to be effective at the level of testing in scope. - Not in scope for testing 21 This section provides an overview of results from our assessment of Information Technology (IT) environment and controls which included identifying risks from the use of IT related to business process controls relevant to the financial audit. This includes an overall IT General Control (ITGC) rating per IT system and details of the ratings assigned to individual control areas. IT application Level of assessment performed Overall ITGC rating ITGC control area rating – security management ITGC control area rating – technology acquisition, development and maintenance ITGC control area rating – technology infrastructure Related significant risks / other risks Advance Business Solutions e5 system – Moray Council’s general ledger ITGC assessment (design and implementation effectiveness only) Green Green Green Green All significant risk areas eFinancials – NHS Grampian’s general ledger ITGC assessment (design and implementation effectiveness only) Green Green Green Green All significant risk areas Page 34
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Wider scope and best value conclusions 04 Page 35
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope conclusions 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. Within our audit plan we identified one significant risk in respect of financial sustainability. Wider scope area Our risk considerations and focus Significant risk identified - final stage Wider scope conclusion Financial Management The arrangements in place at the IJB to ensure sound financial management, accountability and the arrangements to prevent and detect fraud, error and other irregularities No The IJB did not approve the 2024/25 before the start of the financial year, with the final budget not approved until 30 May 2024. Due to costs pressures and the non-delivery of all required savings during 2024/25, both partner organisations required to provide additional funding contributions to enable the IJB to achieve financial balance. An improvement recommendation on year-end reporting of savings has been made at Appendix C. There is regular reporting of the financial position throughout the financial year. The IJB approved the 2025/26 budget in March 2025, before the start of the financial year and in line with required timescales. Financial Sustainability The projected financial position of the IJB in the medium to longer term and the relevance and appropriateness of assumptions applied to financial plans that will allow the council to effectively deliver services in the future Yes The 2025/26 budget is based on an unprecedented level of savings being delivered during the year. The quarter monitoring reports indicate the IJB will not deliver all required savings, which may result in partner organisations providing additional funding should savings not be achieved. Partners have provisions in their accounts for the risk of the IJB not achieving break even. The IJB has relied on the use of earmarked reserves to balance the 2025/26 budget. This is not sustainable for future years as reserves balances will diminish. The IJB are projecting an £18.2 million funding gap to 2029/30 and must ensure that transformation is the key driver for addressing identified budget gaps over the longer term. Use of Resources to Improve Outcomes The effectiveness of the IJB’s governance arrangements and the arrangements in place to deliver the vision, strategy and priorities set by the council No The IJB have governance arrangements in place that are appropriate and operate effectively. The results of both Moray Council and NHS Grampian internal audit activity is now reported to the Audit, Performance and Risk Committee. For the fourth year in succession, Internal Audit have provided a limited assurance audit opinion, which indicates there are weaknesses in the framework of governance, risk management and control. The IJB should have definitive plans in place to avoid further limited assurance opinions and four years of limited assurance opinions requires timely, secured and sustained action. Vision, Leadership and Governance How the IJB demonstrates economy, efficiency and effectiveness through its use of financial and other resources No The IJB have approved the new Strategic Delivery Plan which identifies the programme of transformational and improvement work required to meet the IJBs strategic objectives. The IJB have appropriate performance monitoring and reporting arrangements in place however the format of the Performance Report and content within should be reviewed to ensure the correct level of detail is included in year end reporting. The IJB’s performance is showing a general trend of improvement against the national indicators, however a number of local indicators are below target. No risks identified Other risks identified. Significant risk identified. 23 Page 36
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial management 24 Wider scope area Wider scope audit response and findings Conclusion Financial management No risk identified Financial Management Arrangements The IJB’s financial performance is reported to the Board as an integral part of the budget monitoring process. Budget monitoring reports are submitted to the IJB Board throughout the year and senior management and members receive regular and accurate financial information on the IJB’s financial position. All in-year financial information is reported on a timely basis and there are several supporting appendices to the monitoring reports. The outturn to date and projected year-end outturn position, alongside revisions to the budget are clearly stated in these reports. Where assumptions are determined unrealistic or changes significantly from budget, this is captured, and actions will be identified to resolve any adverse variances. Members are provided with the opportunity to review, challenge and scrutinise the financial performance. The finance team have access to real time information through the finance ledger systems within Moray Council and NHS Grampian to provide accurate financial monitoring reports. The IJB commission services from Moray Council and NHS Grampian. The management of services within each of these organisations continue to be governed by the existing Standing Financial Instructions, Schedule of Reserved Decisions, Operational Scheme of Delegation within the partner organisations. The Financial Regulations were subject to review during 2025 and approved by the IJB Board on 29 May 2025. Finance Team Individuals involved in the preparation and reporting of financial information are qualified and experienced and held finance positions at the organisation for a number of years. Given the nature of the IJB and how it operates, the finance team is relatively small, and if staff shortages or sickness arise, the organisation could face capacity issues. Our review of financial monitoring reports during the year did not identify any significant issues. We have not identified any issues regarding the skills and capability of finance staff within the organisation. Given the size of the organisation, should staff shortages arise, the finance team may face capacity issues. We are satisfied that the IJB have appropriate financial monitoring arrangements in place. Page 37
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial management (1) 25 Wider scope area Wider scope audit response and findings Conclusion Financial management (continued) Financial Performance The IJB has a responsibility under the Public Bodies (Joint Working) (Scotland) Act 2014 to set a budget before 31 March each year. For 2024/25, the IJB presented a “working budget” to the 28 March 2024 Board Meeting. The initial budget was in deficit of £3.764 million. Following this, the IJB presented its final budget for 2024/25 to the 30 May 2024 Board Meeting. The final Revenue Budget for 2024/25 totalled £200.641 million which included £14.665 million set aside services. The funding provided totalled £190.998 million and built into the 2024/25 funding assumptions was expected savings of £8.297 million. The IJB predicted an overall budget deficit of £1.346 million, with the intention to fund the deficit from earmarked reserves. Throughout 2024/25, there were several adjustments to the final 2024/25 Revenue Budget. All budget revisions were reported to the IJB with detailed reasoning of the changes made. The final revised budget position for 2023/24 was £211.765 million. The table below shows the IJB’s outturn position for the year. The IJB had total expenditure of £210.315 million against a final budget of £211.765 million, resulting in an underspend against budget of £1.450 million. This position was following both partner bodies providing an additional funding contribution to the IJB. Moray Council provided £2.061 million whilst NHS Grampian provided £2.196 million. Note: Strategic Funds relate to additional Scottish Government funding for Integrated Joint Boards. For Moray IJB, this generally relates to additional funding received via NHS Grampian and Moray Council. The IJB required additional funding contributions from both partners in order to achieve the year-end outturn position. 2024/25 Financial Outturn Revised Budget (£m) Actual (£m) Core Services 181.235 £188.656 Strategic Funds & Other Resources 14.891 6.020 Set Aside 15.639 15.639 Total 211.765 210.315 Page 38
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial management (2) 26 Wider scope area Wider scope audit response and findings Conclusion Financial management (continued) Financial Performance (continued) The main overspends within core services were as follows: • Learning Disabilities - The service was overspent by £2.27 million due to the additional purchase of care for people with complex needs. • Older People Services and Physical & Sensory Disability – The overspend of £2.26 million primarily related to overspends for home care and permanent care due to the increase in clients receiving nursing care rather than residential care. • Primary Care Prescribing - The primary care prescribing budget reported an overspend of £3.19 million, mainly due to by the impact of short supply causing an increase in costs. Financial Performance - Savings To balance the 2024/25 budget, the IJB intended to make savings of £8.297 million in 2024/25, with progress on the savings plan reported as part of the budget monitoring reports presented to the IJB Board. Each saving is broken down by project and continues to be reported on a RAG basis. There is no indication in either the budget or budget monitoring report whether savings are expected to be recurring in nature. Adding this context into both documents would provide a clear indication as to whether savings are expected to be one off savings or whether the benefit will continue in future years. See recommendation 1. Throughout the year, the IJB made it clear they would not achieve all planned savings and where savings were not fully achieved, it was expected that partner authorities would need to provide additional funding to meet any in year deficits. The budget and monitoring report should make it clear that savings are either recurring or non-recurring in nature. Page 39
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial management (3) 27 Wider scope area Wider scope audit response and findings Conclusion Financial management (continued) Financial Performance – Savings (continued) The year-end outturn report, presented to the IJB Board on 19 June 2025, provides an overview on the savings delivered during 2024/25: Of the £4.633 million of savings delivered in year, the IJB expect £3.398 million to be recurring in nature, with the remaining £1.235 million being non-recurring savings. As outlined previously, this additional context should be added to both the in-year monitoring report and year-end outturn report. We noted that whilst the year-end outturn report provides the final high-level savings position, it does not include the appendix presented as part of the in-year monitoring reports detailing the final delivery position. It would be good practice to provide this same level of detail as part of the year-end outturn report which allows a comparison across the full financial year. See recommendation 1. During 2024/25, the IJB have implemented a Budget Saving Oversight Group. The Chief Officer chairs the group, and membership is the senior management team plus project management officers to support to the process. Monthly meetings are held to review progress on the savings programmes, with the focus on the high risk/high value savings. The IJB did not deliver all planned savings in 2024/25 and required additional funding from partners to meet the in-year funding deficit. Reporting of savings could be improved by providing a detailed breakdown of savings delivered during the year as part of the year-end outturn report. Actual (£m) Savings delivered 2.302 Savings delivered through reduction in overspends 2.331 Savings not delivered 3.664 Page 40
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial sustainability 28 Potential significant risk identified in audit plan (narrative from Audit Plan) Response to potential significant risk (planned work in Audit Plan) Conclusion on potential significant risk The draft Revenue Budget for 2024/25 was £200.641 million, which included £14.665 million set aside services, representing Moray’s share of the Large Hospital Services. The total funding provided from the partner authorities and Scottish Government was £191.088 million, resulting in a budget gap of £9.553 million. To manage the funding deficit, the IJB identified efficiency savings totalling £8.297 million, resulting in a projected budget deficit of £1.346 million. The Quarter 2 revenue monitoring report presented to the Board in November 2024 identified that the IJB are projecting a total overspend of £5.580 million for 2024/25. If this deficit cannot be reduced by year end, partner authorities will require to provide additional funding contributions to manage the overspend. The IJB has a Medium-Term Financial Framework 2023/24 - 2027/28 which has not been subject to update since the 2023/24 budget was agreed and is now considered to be out of date. The funding deficit identified in the MTFF shows a budget gap of approximately £26 million from 2025/26 - 2027/28. The IJB is preparing an updated Medium Term Financial Framework which will presented to the Board in March 2025, alongside the 2025/26 budget. Our audit work included: • understanding the future financial forecasts and plans for the IJB for 2025/26 and beyond, including key assumptions used, scenario planning, sensitivity analysis, risk analysis and the extent of any budget pressures any impact upon reserves • considered the actions the IJB is taking to address identified funding gaps and associated savings plans. • followed up the prior year recommendations in respect of the financial sustainability risk highlighted last year. The 2025/26 Revenue Budget is predicated on delivering savings of £9.467 million. The IJB have also budgeted to use earmarked reserves to fund a projected budgeted deficit of £1.000 million in 2025/26. The IJB are forecasting a budget deficit of £4.685 million for financial year 2025/26. It is unlikely that the IJB will deliver all required savings in 2024/25 and if possible, they should look for alternative options to help achieve a balanced budget. The updated Medium Term Financial Framework (MTFF) confirms that financial pressures for 2025/26 and beyond are significant, with the total funding gap for the period currently projected to be £18.2 million. The IJB will need to identify and deliver significant savings and transformation to reduce funding gaps and continue to deliver key services and IJB priorities. The continued reliance on reserves is not sustainable and although it helps achieve a balanced budget in 2025/26, the IJB will not have sufficient available earmarked reserves to draw upon in order to meet the 2026/27 funding deficit. The risk below was included in the Annual Audit Plan. The narrative is the wording from the Audit Plan and identifies the work we would undertake in response to the risk identified. Pages 29 to 33 details the work undertaken in response to the assessed risk and we have outlined our overall conclusion below. Page 41
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial sustainability (1) 29 Wider scope area Wider scope audit response and findings Conclusion Financial sustainability Significant risk: 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. Short Term Financial Planning – Budget Setting 2025/26 Moray IJB’s main source of funding comes from the contributions received from the two partner authorities. The IJB undertakes an annual budget process which forms part of the wider medium term strategy process. This includes discussions taking place between management, Moray Council and NHS Grampian regarding funding requirements. As outlined, IJB did not present a balanced budget for 2024/25 before the end of March. As a result, we recommended in our previous audit that the IJB should ensure it presents its final budget, with all agreed savings, before the start of the financial year. The 2025/26 budget and savings plan was approved by the IJB Board on 27 March 2025, in line with required timescales. The final revenue Budget for 2025/26 is £213.843 million which included £15.638 million for set aside services. The funding provided totalled £212.843 million and built into the 2025/26 funding assumptions is projected savings of £9.469 million. The IJB expect £8.279 million of these savings to be recurring in nature. Overall, the IJB predicted an overall budget deficit of £1.000 million, with the intention to fund the deficit from earmarked reserves. The IJB agreed the 25/26 budget in line with required timescales. The IJB are intending to utilise £1.000 million of earmarked reserves balances to manage the budget deficit in 2025/26. 2025/26 Budget 2025/26 (£m) Total Budget 213.843 Total Funding (203.376) Savings Identified (9.467) Budget Deficit (1.000) Page 42
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial sustainability (2) 30 Wider scope area Wider scope audit response and findings Conclusion Financial sustainability (continued) Short Term Financial Planning – Budget Setting 2025/26 (continued) The level of savings the IJB require to produce in year is unprecedented. As outlined, the IJB did not deliver all planned savings for 2024/25 and were the full £9.467 million of savings not fully achieved during 2025/26, it is expected that partner authorities will need to provide additional funding to meet any in year deficits. The IJB will need to closely monitor savings delivery during 2025/26 via the Budget Savings Oversight Group. The savings plan for 2025/26 is made up of several wide-ranging savings proposals including reduction in locum use, reviewing care packages provided to patients, efficiencies in prescribing and reductions in overtime. 2025/26 Revenue Budget Monitoring The IJB presented Quarter 1 revenue monitoring report to the September 2025 Board Meeting. The report provides an update on the IJB’s performance against the 2025/26 budget and shows detailed forecast projections for the remainder of 2025/26. The budget position at the end of June 2025 is an overspend to date on the Core Services budget of £1.425 million, and an overspend on the Strategic Funds budget of £0.592 million. Looking ahead, the IJB are forecasting a budget deficit of £4.685 million (2.2% of the IJB budget) for financial year 2025/26. The progress towards the IJB’s savings plans is included as part of the monitoring report and is reported on a RAG basis. At the end of June 2025, the IJB were predicting: - Expect to achieve £6.871 million of savings (rated green) - £2.598 million of savings are at risk of not being achieved (rated amber or red). The monitoring reports indicate that it is likely the IJB will overspend in 2025/26 and as such, the IJB must ensure there is close liaison with partner bodies so that they understand the financial implications the projected overspend will have on their own budgets. The IJB share the financial position with the partners on a regular basis, as part of partners meetings held every six weeks. The IJB will require to deliver a significant level of savings in order to manage the funding gap in 2025/26. It is unlikely that the IJB will deliver all required savings in 2025/26 and if possible, they should look for alternative options to help achieve a balanced budget The IJB must ensure there is close liaison with partner bodies so that they understand the financial implications the projected overspend will have on their own budgets. Page 43
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial sustainability (3) 31 Wider scope area Wider scope audit response and findings Conclusion Financial sustainability (continued) Medium Term Financial Strategy The updated Medium Term Financial Framework (MTFF) 2025/26 - 2029/30 was approved at the IJB Board meeting on 27 March 2025. The financial pressures for 2025/26 and beyond are significant, with the total funding gap for the period currently projected to be £18.2 million. The summary position (in the table above) highlights that the IJB will need to closely monitor the financial constraints within which it is operating. Future funding assumes a level of savings will be achieved each year, together with transformational redesign that the IJB know they need to make in order to provide affordable sustainable services within the resources available. The MTFF assumes that the existing financial pressures will be addressed through savings alongside the need to transform the way services are provided across the system. Risks such as potential reduction in future funding, pay negotiations, rising inflation, cost of living crises and supply chain pressures are embedded within the MTFF however, given the economic uncertainty of these factors, this could result in a growth of the cumulative funding gap. To achieve financial sustainability and reduce reliance on useable reserves to bridge funding gaps, the IJB will need to identify and deliver significant savings and transformation to reduce funding gaps and continue to deliver key services and IJB priorities. There is a risk that where savings and transformation plans are not delivered, in the short to medium term this could provide financial sustainability challenges for the IJB. 2025/26 £m 2026/27 £m 2027/28 £m 2028/29 £m 2029/30 £m Estimated Budget Requirement 204.375 212.158 215.950 220.268 224.715 Total Funding (203.375) (207.390) (211.525) (215.784) (220.170) Use of earmarked reserves (1.000) Budget Surplus/ (Deficit) - (4.768) (4.425) (4.484) (4.545) Page 44
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial sustainability (4) 32 Wider scope area Wider scope audit response and findings Conclusion Financial sustainability (continued) Reserves Reserves are a key performance indicator of monitoring the financial health of a body. At 31 March 2025, the IJB held £1.450 million of reserves which were fully earmarked. During 2024/25, the IJB utilised £0.536 million of reserves. The IJB has budgeted to utilise £1.000 million of general earmarked reserves in 2025/26 to achieve a balanced budget. This will reduce general earmarked reserves to £0.450 million by 31 March 2025. The use of reserves to balance the budget should not be relied upon, as this is finite and not a way to create financial sustainability for the IJB. As mentioned above, the IJB will need to prioritise and focus on transformation to ensure that reserves are used for their intended purpose to and not to meet budget gaps. At the 31 March 2025, the IJB general reserves balance is nil, which means any future overspends will need to be fully met by the partner authorities. The table below outlines the movement in reserves during 2024/25: In our previous audit, we recommended that the IJB continue to monitor the percentage level of adequate reserves as funding gaps continue to grow and that the IJB should look to transformation in future years to ensure reserves do not dip to an unsustainable level. This recommendation remains valid as the IJB have budgeted to use earmarked reserves to balanced the 2025/26 budget, which will not be sustainable in future years. The continued reliance on reserves is not sustainable and although it helps achieve a balanced budget in 2025/26, the IJB will not have sufficient available earmarked reserves to draw upon in order to meet the 2026/27 funding deficit. There is no general reserve balance, and the level of reserves is at an unsustainable level. General Reserves £m PCIP & Action 15 £m Other Earmarked £m Total £m As at 31 March 2024 - 33 1.953 1.986 Transferred Out - (33) (0.503) (0.536) Balance at 31 March 2025 - - 1.450 1.450 Page 45
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – financial sustainability (5) 33 Wider scope area Wider scope audit response and findings Conclusion Financial sustainability (continued) Transformation Plans The cumulative funding gap position in the next four years is significant and outlines serious concerns over the future financial sustainability of the IJB where additional funding is not provided or where the IJB does not operate within its funding allocation. This creates a risk, as Moray IJB will have to balance ensuring that it maintains financial sustainability with ensuring that it continues its service delivery to meet its priorities. To reduce the current funding gap, a major transformation programme will need to be undertaken. The IJB has recognised the fact that it will require transformational redesign to reduce future funding gaps and reshape the organisation to ensure efficient service delivery. Substantial transformation is required to bring about financial sustainability. The size and scale of transformation required to deliver the savings and efficiencies required to close the projected funding gap is unprecedented. It is important that IJB members have oversight of the transformation programme to ensure the savings and efficiencies required to reduce future funding gaps can be delivered. Audit Scotland - Review of Integration Joint Boards In March 2025, Audit Scotland published Integration Joint Boards: Finance Bulletin 2023/24 which provided an independent analysis over the finances of Integration Joint Boards for financial year 2023/24. Key findings from the report included: • The majority of IJBs reported a deficit on the cost of providing services requiring unplanned use of reserves and additional contributions from partner bodies. • Total reserves held by IJBs have reduced by 40 per cent in 2023/24. Contingency reserves have almost halved, limiting IJBs ability to address future deficits. • The majority of the total planned savings were achieved, but a substantial proportion were achieved on a one-off basis Several items raised in the Audit Scotland report are consistent with the issues that Moray IJB are facing and there is an understanding that shape of service delivery will have to change in order to deliver services in a more sustainable manner. To ensure financial sustainability for the medium to longer term, the IJB will need to ensure that it is able to deliver increased income and efficiency initiatives to reduce costs and deliver financial benefits. The IJB will need to upscale the pace and delivery of transformation to achieve and mitigate the risk of becoming financially unsustainable. Moray IJB are facing several of the issues raised in the Audit Scotland report and are reviewing how they can provide services in a more sustainable manner. Page 46
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – vision, leadership and governance 34 Wider scope area Wider scope audit response and findings Conclusion Vision, leadership and governance No risk identified Leadership and Committee Effectiveness Moray IJB hold a committee-based structure which has delegated functions to several committees who subsequently become responsible for the administration of services. There are currently three different committees, namely the Board, the Audit, Performance and Risk Committee and the Clinical and Care Governance Committee. The Audit, Performance and Risk Committee undertakes the role of Those Charged with Governance (TCWG) and looks to consider reports and obtain assurance through internal and external audit reports concerning the IJB’s functions. The Committee also obtains assurance over performance monitoring and receive reports on the performance of and trends within the IJB’s services in terms of service standards and performance information. Monitoring of action plan progress and service performance in key areas is reported to ensure a process of continuous improvement. This allows the IJB the opportunity to evaluate on strengths and weaknesses and draw any themes arising from results of self evaluations. It also enables the implementation of any necessary action plans to support continuous improvement in priority areas and ensure it is demonstrating compliance against the CIPFA Code of Principles for Delivering Good Governance (revised 2016). In our previous audit, we recommended that the IJB and Moray Council need to secure permanent positions for the Chief Officer and Chief Social Worker at the Council, to provide certainty over the future direction of the IJB. The IJB appointed a Chief Officer on an interim basis in July 2024, with the appointment being made permanent in November 2024. The Chief Social Worker at the Council left in May 2024, with a replacement Chief Social Worker appointed on an interim basis in the same month. To date, no permanent appointment has been made, and the post continues to be filled on an interim basis. A recruitment process is underway to find a permanent replacement. The previous audit recommendation remains valid until a permanent appointment has been made. Our review of attendance of members at Committee meetings has not flagged any issues. We are satisfied that the governance arrangements are appropriate and operate effectively. We conclude that the Audit, Performance and Risk Committee effectively challenge and scrutinize reports presented and ensure effective decision making. The Council are actively recruiting a permanent Chief Social Worker. Page 47
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – vision, leadership and governance (1) 35 Wider scope area Wider scope audit response and findings Conclusion Vision, leadership and governance (continued) Governance Statement The Governance Statement details the composition and governance structure of Moray IJB and how that supports the achievement of the organisation’s priority themes. From review of the Statement, we are satisfied that it reflects the key findings from audit, scrutiny and inspection, including details of the limited assurance Internal Audit opinion issued for 2024/25 (see Internal Audit section for further detail). Risk Management The IJB maintains a strategic risk register which sets out the inherent risks being faced by the IJB, together with a current assessment on the level of the risks and mitigating actions being taken to reduce the impact of the risks. As part of the risk monitoring framework, the Strategic Risk Register was subject to review during 2024/25 and was co-developed with Board members during a development session in October 2024. The updated Strategic Risk register was formally approved by the Board in May 2025. The risk register is reviewed monthly by the Senior Management Team, updated and presented biannually to the Audit, Performance and Risk Committee, and annually to the Moray IJB Board for oversight. Any emerging or increasing risks are presented as required outside of the agreed reporting cycle. Changes made to the risk register since it was last presented to the Committee are easily identifiable and are highlighted to members. Risk scores are weighted, based on assessment according to their likelihood and corresponding impact as set out in the Risk Appetite Statement. The most recent risk register presented to the Board included one “very high” risk identified by the IJB as follows: • The MIJB must operate within the resources allocated to it by the partner bodies and it is good financial practice to set a balanced budget at the start of each financial year. There is a risk that Financial pressures being experienced by the funding partners will directly impact the MIJB’s strategic planning of services and its decision-making. This risk and the mitigating actions the IJB are implementing in response are in in line with our findings reported in the financial sustainability section of this report. The Strategic Risk Register has been updated during 2024/25 and we are satisfied that the key risks have been identified and that the pace of improvement is appropriate to the risks and challenges facing Moray IJB. The IJB has in place a wide range of policies and procedures designed to ensure compliance with laws and regulations, including for example financial regulations and standing orders. Our review of these policies have found the policies to be relevant and promoted within the organisation. Page 48
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – vision, leadership and governance (2) 36 Wider scope area Wider scope audit response and findings Conclusion Vision, leadership and governance (continued) Internal Controls The IJB has in place a range of policies and procedures designed to ensure compliance with laws and regulations, including for example financial regulations and standing orders. The date of approval and adoption by the Board for the Standing Orders was May 2022. The Financial Regulations were updated in May 2025 and approved by the Board. The IJB does not have its own separate code of conduct, whistleblowing or fraud policies and follows those set out by the partner organisations. Internal Audit Internal audit activity is undertaken by the Audit and Risk Manager of Moray Council, who was appointed as the Chief Internal Auditor of Moray IJB in 2022, for a period of two years to 31 March 2024. This was extended by a further two years following approval at the May 2024 Board meeting. Internal audit undertook the following reviews during the financial year: • An audit of the administrative arrangements for fostering and kinship care payments. • A review of the IJB’s governance arrangements to prevent fraud and corruption. • An audit of the systems and procedures supporting the delivery of services to individuals receiving adult care services who are classified as out of area (OOA). • A review of residential care to examine the processes for making accurate payments at agreed contract rates to third-party providers for the delivery of permanent residential care. • Follow-up audits of Self-Directed Support and Moray Integrated Community Stores As a result of the reviews, Internal Audit identified several audit recommendations. This resulted in an overall assurance opinion for the 2024/25 financial year of limited assurance. The IJB has in place a wide range of policies and procedures designed to ensure compliance with laws and regulations, including for example financial regulations and standing orders. Our review of these policies have found the policies to be relevant and promoted within the organisation. The IJB have an effective internal audit function in place to assist with assurance over governance framework, risk and internal controls. Page 49
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – vision, leadership and governance (3) 37 Wider scope area Wider scope audit response and findings Conclusion Vision, leadership and governance (continued) Internal Audit (continued) The internal audit opinion notes that “the Service has made progress by introducing improved governance arrangements, notably through regular reporting on the implementation of audit recommendations at Senior Management and Practice Governance Board meetings. However, significant findings have emerged from the audits undertaken, and follow-up reviews have identified recommendations that remain outstanding and require revised implementation dates. Furthermore, advancing the development of a single case recording system within the Service continues to be a matter of significant importance. After careful consideration, it is my opinion that I can only provide limited assurance that the Moray Integration Joint Board has adequate systems of governance and internal control.” This is the fourth year in succession that Internal Audit have provided a limited assurance opinion. Fundamentally, this indicates there are weaknesses in the framework of governance, risk management and control. We have previously reported that the IJB should ensure audit recommendation dates are realistic and monitored for implementation and it is clear that the IJB must aim to implement internal audit recommendations at a faster pace to move away from limited assurance opinions. Our recommendation remains valid As outlined, as part of their review of process at the IJB, internal audit make recommendations for management in order to improve controls. The IJB have introduced an internal audit recommendations tracker, however this is not presented to each Audit, Performance and Risk Committee meeting. In our previous audit, we recommended that the tracker of internal audit recommendations is reviewed periodically and reported to each Audit, Performance and Risk Committee meeting. During 2024/25, the IJB have agreed that internal audit recommendations will be reviewed at Operational Management Team (OMT) meetings, with monthly escalations to Senior Management Team (SMT) meetings on an exception basis. If SMT deem any issues require escalation, a report would then be compiled for reporting to the Audit, Performance and Risk Committee. This is the fourth year in succession that Internal Audit have provided a limited assurance opinion. Fundamentally, this indicates there are weaknesses in the framework of governance, risk management and control. The IJB should have definitive plans in place to avoid further limited assurance opinions. The recommendations made by internal audit span multiple years and the IJB must ensure that audit recommendations are actioned in a timely manner. Our prior year recommendation raised remains valid. Page 50
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – vision, leadership and governance (4) 38 Wider scope area Wider scope audit response and findings Conclusion Vision, leadership and governance (continued) Internal Audit (continued) We had also reported previously that the IJB should create a mechanism to monitor progress against external audit recommendations. The IJB presented a report to the IJB on 27 March 2025 detailing progress made with external audit recommendations, and progress updates will continue to be reported on a regular basis. The Audit, Performance and Risk Committee received quarterly audit and inspection reports from internal audit which outlined the work undertaken in each quarter alongside any follow up audits and the results of the audits. This provides Audit, Performance and Risk Committee members the opportunity to gain assurance that internal controls are operating as expected. We had previously reported that the IJB should look to strengthen the reporting of NHS Grampian’s internal audit results. In prior years, the reporting had been heavily weighted towards activity at Moray Council, with limited updates on the results of internal audit activity at the health board. An agreement has now been reached with the management of NHS Grampian and their Internal Audit Provider to allow the Chief Internal Auditor to confidentially report NHS Grampian's internal audit reviews of systems and practices of interest to the IJB to the Audit, Performance, and Risk Committee. This improves the level of oversight members have and provides a complete picture of both organisations. Joint inspection of adult support and protection: review of progress in the Moray partnership The Care Inspectorate published a report in October 2024 detailing the results of a progress review carried out by the Care Inspectorate, Healthcare Improvement Scotland and His Majesty’s Inspectorate of Constabulary in Scotland, following a previous joint inspection of adult support and protection conducted in 2022. The results of both Moray Council and NHS Grampian internal audit activity is now reported to the Audit, Performance and Risk Committee. Improvements were noted by the Care Inspectorate in relation to the delivery of adult support and protection. Page 51
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – vision, leadership and governance (5) 39 Wider scope area Wider scope audit response and findings Conclusion Vision, leadership and governance (continued) Joint inspection of adult support and protection: review of progress in the Moray partnership (continued) The progress review concluded that the Moray partnership’s efforts to implement seven priority areas for improvement were timely, rigorous and effective. Inspectors found that key processes for adult support and protection that required improvement were now demonstrably sound and effective. This improved the safety, health, and wellbeing outcomes for adults at risk of harm. Some improvement areas were identified by the Care Inspectorate, notably the provision of risk assessments for all adults at risk of harm who require them, and the quality of recording adult support and protection matters in health records. In November 2024, the IJB approved the Adult Support and Protection (ASP) Improvement Action Plan following the inspection. A progress report outlining the progress made towards each of the planned actions is presented at each sitting of the Adult Protection Committee. The IJB have agreed that any reporting to the Board will be by exception. Joint Strategic Needs Assessment All integration authorities are required to oversee the production of Joint Strategic Needs Assessments (JSNA) to analyse the needs of local populations and to inform and guide the commissioning of health, wellbeing and social care services within their area. The revised JSNA for adults was approved by the Moray IJB on 26 September 2024. The findings from the JSNA were considered when preparing the new Strategic Delivery Plan. Page 52
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – use of resources 40 Wider scope area Wider scope audit response and findings Conclusion Use of resources to improve outcomes No risk identified Strategic Planning The IJB have a Strategic Plan covering 2022-2032. The Strategic Plan identifies the IJB’s strategic themes: • Building Resilience - Taking greater responsibility for health and wellbeing • Home First - Being supported at home or in a homely setting as far as possible • Partners in Care - Making choices and taking control over decisions affecting care and support Underpinning these themes are several objectives which detail how the IJB will achieve each objective. To support the delivery of the Strategic Plan, the IJB approved the Strategic Delivery Plan 2025 – 2028 at the IJB Board meeting on 27 March 2025. The Strategic Delivery Plan sets out the programme of transformational and improvement work underway to enable the IJB to meet its strategic priorities. The Strategic Plan itself is also supported by the IJB's Workforce Plan, Medium Term Financial Strategy and Commissioning and Procurement Plan. The Strategic Delivery Plan reflects the key actions being driven by the IJB over the next three years. It is a live document, meaning the IJB can be responsive to new or emerging priorities. The Strategic Delivery Plan provides high level information about each action, and links to strategic objectives and strategic themes. This includes a key summary and the priority tasks that will be undertaken. A lead action owner is identified alongside a timescale for completion. Progress of the Strategic Delivery Plan is monitored by the Senior Management Team (SMT) and the Strategic Planning and Commissioning Group (SPCG), with a summary report to the Board every six months. A high- level summary of performance against the outcomes of the Strategic Delivery Plan is also reported to the Audit, Performance and Risk (APR) Committee on a quarterly basis. The IJB have approved the new Strategic Delivery Plan which identifies the set of actions the IJB will complete in order to deliver its strategic objectives. There are clear links between the Strategic Plan and Strategic Delivery Plan with a clear set of actions laid out in the Strategic Delivery Plan Page 53
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – use of resources (1) 41 Wider scope area Wider scope audit response and findings Conclusion Use of resources to improve outcomes (continued) Performance Reporting A performance report is published annually which outlines the IJB’s annual performance against the strategic priorities of the Health and Social Care Partnership and evidencing some of the key achievements and challenges faced by the IJB. Furthermore, the report provides details on the IJB’s performance in relation to the Scottish Government’s core suite of national integration indicators which allows comparisons to be made over time and against Scotland as a whole. We have previously reported that management should review the format of the Performance Report and content to ensure it is succinct, focuses on the IJB’s performance and outcomes, and supports the user of the financial statements to understand the IJB’s purpose and achievements in year. This has not been actioned during 2024/25 and remains an open action for implementation. The IJB have confirmed that the Performance Management Framework will be reviewed in 2025/26 following the approval of the Strategic Delivery Plan. Our review of the 24/25 performance report highlights that out of the 19 national indicators reported: • nine were showing as green (IJB performance has improved from last year), • four indicators were showing as amber (performance is similar to last year) • five were showing as red (performance is worse than previous year. There was one indicator that data is not available for reporting. The red indicators in the performance report, where the IJB’s performance worsened during 2024/25 are detailed on the following page. The performance report notes that national indicators 1-9 only report performance information every two years and therefore the comparisons being made relate to 2023/24 performance, not 2024/25 performance for these nine indicators. We have obtained assurance that appropriate performance monitoring and reporting arrangements are in place at the IJB, and where indicators are worsening, the IJB then agree upon actions that need to be taken to improve performance. The IJB’s performance is showing a general trend of improvement against the national indicators. Page 54
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – use of resources (2) 42 Wider scope area Wider scope audit response and findings Conclusion Use of resources to improve outcomes (continued) Performance Reporting (continued) Source: 2024/25 Annual Performance Report Note: National Indicators 1-9 are based on the HACE survey which is undertaken every two years. 2024/25 figures remain the same as reported in 2023/24 Annual Performance Report. Moray faces the challenge of an increasing older population with a decline in working age population, staff recruitment challenges and lack of available accommodation against a backdrop of significant financial challenge. Adult social care is widely publicised as being under pressure in all local government authorities, so this issue is not specific to Moray IJB. The IJB will need to ensure that it is able to continue to deliver safe and effective adult services considering the challenging financial background faced alongside a growing aging demographic. This will require wider transformation of the IJB which is outlined within the Financial Sustainability section of this report. National Indicator (Moray IJB reporting as red) 2023/24 2024/25 Scotland Avg. (24/25) 2. Percentage of adults supported at home who agree that they are supported to live as independently as possible 72% 72% 72% 3. Percentage of adults supported at home who agree that they had a say in how their help, care or support was provided 59% 59% 60% 8. Percentage of carers who feel supported to continue in their caring 28% 28% 31% 9. Percentage of adults supported at home who agree they felt safe 70% 70% 73% 17. Inspectorate inspections 81.1% 73.8% 81.9% Page 55
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – use of resources (3) 43 Wider scope area Wider scope audit response and findings Conclusion Use of resources to improve outcomes (continued) Performance Reporting (continued) The IJB have an agreed set of local performance indicators, with updates reported each quarter to the Audit, Performance and Risk Committee. Performance is reported in a RAG status, with five of the eleven indicators within agreed tolerance levels The table below shows the performance of each indicator as at March 2025: The IJB’s performance against its local indicators is mixed, with six indicators below agreed target levels. Target 2024/25 RAG A&E attendance rate per 1000 population all ages 21.9 22.0 Number of Delayed Discharges (including code 9) at census point 26 40 Number of bed days occupied by delayed discharges (incl. code 9) at census point 850 1149 Rate of emergency occupied bed days for over 65s per 1000 population 2681 2412 Emergency admission rate per 1000 population for over 65’s 187 177.8 Number of people over 65 years admitted as an emergency in the previous 12 months per 1000 population 131 125.7 % Emergency readmissions to hospital within 7 days of discharge 3.7% 3.9% % Emergency readmissions to hospital within 28 days of discharge 7.9% 7.4% % of patients commencing Psychological Therapy Treatment within 18 weeks of referral 90% 65% NHS Sickness Absence (% of hours lost) 4% 4.9% Council Sickness Absence (% of calendar days lost) 4% 8.2% Page 56
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Wider scope audit – use of resources (4) 44 Wider scope area Wider scope audit response and findings Conclusion Use of resources to improve outcomes (continued) Performance Reporting (continued) The performance monitoring reports taken to the Audit, Performance Risk Committee clearly indicate the planned actions to address each indicator assessed as below target. The reports identify mitigations the IJB have agreed to achieve improvement in each indicator, and these are monitored via the reporting to the Committee. Performance Framework Development Following the approval of the Strategic Delivery Plan, a review of the performance management framework is underway. The IJB have appointed a Senior Performance Officer as part of the review process. The IJB intend to develop a refreshed set of performance indicators as part of the review. Reporting arrangements are also being developed to ensure there is more clarity between activity and outcomes and to support the delivery of the strategic priorities set out in the Strategic Delivery Plan plan The IJB are carrying out a review of the Performance Framework with updates planned to be in place by the end of 2025. Page 57
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Best value conclusions 45 Under the Code of Audit Practice, the audit of Best Value in Integration Joint Boards is fully integrated within the annual audit work performed by appointed auditors and their teams. As part of our integrated wider-scope annual audit work, we as appointed auditors use a risk-based approach to assess and report whether the IJB has made proper arrangements for securing Best Value and how the body demonstrates that it is meeting Best Value responsibilities. The principles of best value are embedded within the wider scope work we perform, and the judgements made within the wider scope work allow us to make an assessment over Best Value. Conclusion Integration Joint Board’s have a statutory duty to have arrangements to secure Best Value. To achieve this, Integration Joint Boards should have effective processes for scrutinising performance, monitoring progress towards the strategic objectives and holding partners to account. The IJB have arrangements in place to secure Best Value, as demonstrated in the Annual Governance Statement. We consider these arrangements as part of our regular wider scope work and have provided our conclusions. We have noted that the IJB have no mechanism for formally reviewing and reporting on the arrangements to secure best value. We recommend that the IJB should undertake a formal review of the Best Value assurance framework and complete an assessment of the arrangements to secure Best Value. The outcome of the assessment should be reported to the Audit, Performance and Risk Committee at the end of each financial year, with reference made to this assessment in the Annual Governance Statement. See recommendation raised at Appendix B. Page 58
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendices 46 Page 59
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow A. Audit adjustments Impact of adjusted misstatements During the course of the audit, there were no adjusted non-trivial misstatements which were made that require reporting within our Annual Audit Report. Impact of unadjusted misstatements During the course of the audit, there were no unadjusted non-trivial misstatements which were made that require reporting within our Annual Audit Report. Impact of unadjusted misstatements in the prior year There was no unadjusted misstatement identified in the prior year audit. 47 We are required to report all non-trivial misstatements to those charged with governance, whether or not the accounts have been adjusted by management. Page 60
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow A. Audit adjustments (2) Misclassification and disclosure changes The table below provides details of substantive misclassification and disclosure changes identified during the audit which have been made in the final set of financial statements. This list of misclassification and disclosure changes reflects presentational adjustments to the financial statements which have no impact on the Council’s reported financial position. 48 Disclosure Auditor recommendations Adjusted? General There were minor changes noted to grammar and to correct spelling and other consistency issues. The health board has corrected these in the final version of the financial statements. Such changes are are expected and do not warrant detailed explanation. Yes Other Information We identified changes were required to the Moray Integration Joint Board members disclosure to accurately reflect membership during 2024/25. Yes Management Commentary We identified that detail should be added into the Management Commentary to explain the underspend in Strategic Funds and Other Resources budget. Yes Governance Statement We identified that additional disclosure should be added to confirm the processes in place to monitor the implementation of audit recommendations. Yes Remuneration Report We identified that all references to Interim Chief Officer should be removed as the position was made permanent in November 2024. We identified a difference of £2k in the lump sum calculation for the Chief Officer. The accounts were amended to include the correct figure. Yes Note 4 - Expenditure and Income Analysis by Nature We identified that the audit fee disclosure should be amended to state the final agreed audit fee. Yes Page 61
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow B. Action plan and recommendations – wider scope and best value 49 We have set our below, based on our audit work undertaken in 2024/25, the key recommendations arising from our wider scope and best value audit work: Recommendation Agreed management response 1. Financial Management – Reporting of savings The budget and financial reports presented to the Board and Audit, Risk and Performance Committee do not detail whether savings are expected to be recurring in nature. Adding this context into both documents would provide a clear indication as to whether savings are expected to be one off savings or whether the benefit will continue in future years. The IJB prepare a year-end outturn which includes the final high-level savings position. However, this report does not include the appendix presented as part of the in-year monitoring reports detailing the final delivery position. It would be good practice to provide this same level of detail as part of the year-end outturn report which allows a comparison across the full financial year. Recommendation: The IJB should indicate whether savings are expected to be recurring or non- recurring in nature. The IJB should prepare a report showing a breakdown of savings delivered on a project basis as part of the year-end outturn report. Summary has previously been shown at year end but detailed workings always available and this recommendation can easily be implemented along with recurring and non-recurring savings for the next report due. Action Owner: Chief Finance Officer Timescale for implementation: 30 June 2026 Page 62
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow B. Action plan and recommendations – wider scope and best value (2) 50 Recommendation Agreed management response 2. Assessment over the arrangements to secure Best Value We have noted that the IJB have no mechanism for formally reviewing and reporting on the arrangements to secure best value. Recommendation: The IJB should undertake a formal review of the Best Value assurance framework and complete an assessment of the arrangements to secure best value. The outcome of the assessment should be reported to the Audit, Performance and Risk Committee. The IJB will complete a self assessment for best value assurance for the end of the financial year. Action Owner: Chief Finance Officer Timescale for implementation: 31 March 2026 Page 63
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow C. Follow up of prior year recommendations 51 We identified the following issues in our prior year wider scope work, which resulted in twelve recommendations being reported in our 2023/24 Audit Findings Report. We have performed additional work in year to obtain assurance whether the recommendations have been closed and resolved in the current year or whether the issue still exists and the recommendation remains open and/or in progress. Six out of twelve recommendations have been cleared with one in progress and five still open. Recommendations from the wider scope audit Assessment Issue and risk previously communication Management update on actions taken to address the issue Auditor conclusion Closed Revenue Budget Setting The IJB is required to set its budget before the end of March. Whilst the IJB set a working budget on 28 March 2024 it did not formally approve the 2024/25 revenue budget until 30 May 2024. Recommendation: The IJB should ensure it presents its final budget, with all agreed savings, before the start of the financial year Work has been ongoing throughout 2024/25 to produce a balanced budget for 2025/26 which was presented to the Moray IJB Board on 27 March 2025 The IJB presented the 2025/26 budget to the Board on 27 March 2025, in advance of the start of the financial year and in line with required timescales. [Red] Recommendation is open [Amber] Recommendation is in progress [ Green] Recommendation is closed Page 64
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow C. Follow up of prior year recommendations (2) 52 Recommendations from the wider scope audit Assessment Issue and risk previously communication Management update on actions taken to address the issue Auditor conclusion Open Financial Sustainability – Reserves The IJB intend to utilise £1.346 million of earmarked reserves to bridge the budget deficit in 2024/25. There is a risk that continued reliance on reserves to bridge funding gaps will create financial sustainability issues for the IJB. Recommendation: The IJB will need to continue to monitor the percentage level of adequate reserves as funding gaps continue to grow and the IJB looks to transformation in future years to ensure reserves do not dip to an unsustainable level. Consideration has been given to the level of reserves in the IJB and the savings achieved are not able to provide a level of general reserves for 2025/26. For 2025/26 budget the IJB again intends to utilise £1 million of ear marked reserves to bridge the budget deficit. The latest Audit Scotland publication makes reference to the fact a significant number of IJBs are using reserves and not just unique to Moray. The 2025/26 budget has been agreed, with the IJB intending to use £1.000 million of earmarked reserves balances. The IJB have a limited amount of reserves balances (£1.450 million as at end of 2024/25) and continued use of reserves balances to manage the funding gap is not sustainable. The IJB should aim to bridge funding gaps through transformation and identifying alternative ways to deliver services. Recommendation remains valid. Revised Target Date: 31 March 2026 Closed Medium-Term Financial Strategy The Medium-Term Financial Strategy was last updated in March 2023 and is considered out of date. If the plan is not updated on a regular basis, there is a risk that the IJB are unaware of the potential funding implications over the medium term. Recommendation: The IJB should re-evaluate the financial outlook over the medium term and update the Medium-Term Financial Strategy to identify the total funding gap over the medium term. The updates to the Medium-Term Financial Framework (MTFF) were delayed, however the MTFF has now been refreshed and was presented at the Moray IJB Committee meeting on 27 March 2025. The MTFF has been updated and provides detail on the financial pressures for 2025/26 and beyond. The funding gap to 2029/30 is estimated to be £18.2 million. Page 65
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow C. Follow up of prior year recommendations (3) 53 Recommendations from the wider scope audit Assessment Issue and risk previously communication Management update on actions taken to address the issue Auditor conclusion Closed Reporting of NHS Grampian Internal Audit Activity Internal audit reporting is heavily based on activities within Moray Council. Moray IJB should look to strengthen the reporting of NHS Grampian’s internal audit results within the IJB to provide oversight to members and to provide a complete picture of both organisations. Recommendation: To ensure oversight of NHS Grampian internal audit reports, reporting to the Audit, Performance and Risk Committee needs to be strengthened. Implemented – An agreement has now been reached with the management of NHS Grampian and their Internal Audit Provider to allow the Chief Internal Auditor to confidentially report NHS Grampian's internal audit reviews of systems and practices of interest to the MIJB to the Audit, Performance, and Risk Committee NHS Grampian Internal Audit report which are relevant to the IJB are now reported in private to the Audit, Performance and Risk Committee. This ensures IJB members have oversight of the reporting of NHS Grampian internal audit activity. In progress Senior Management Team Following the retirement of the previous Chief Officer, the current Chief Officer has been appointed on an interim basis. Furthermore, the Chief Social Worker at the Council is also appointed on an interim basis. Recommendation: The IJB and Council need to secure permanent positions for the both posts to provide certainty over the future direction of the IJB. Following an open recruitment process a permanent Chief Officer was appointed in November 2024, the role being offered and accepted by the person undertaking the role as an interim. Given this, they were able to start in the permanent role immediately. A process will now be undertaken to recruit to the permanent CSWO role. The IJB have recruited a permanent Chief Officer who has been in role since November 2024 and had previously been appointed on an interim basis. To date, no permanent appointment has been made to the CSWO role meaning this recommendation is in progress. Recommendation is in-progress. Revised Target Date: 31 March 2026 Page 66
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow C. Follow up of prior year recommendations (4) 54 Recommendations from the wider scope audit Assessment Issue and risk previously communication Management update on actions taken to address the issue Auditor conclusion Open Internal Audit Limited Assurance Opinion This is the third year in succession that Internal Audit have provided a limited assurance opinion. Fundamentally, this indicates there are weaknesses in the framework of governance, risk management and control. Recommendation: The IJB should have definitive plans in place to avoid further limited assurance opinions. Progress has been made, however there are still concerns with the recommendations being implemented following audits, progress on CareFirst and realisation of the savings, resulting in the Internal Audit Manager providing another limited assurance opinion in 2024/25. This is the fourth year in succession that Internal Audit have provided a limited assurance opinion. Fundamentally, this indicates there are weaknesses in the framework of governance, risk management and control. The IJB still require to put definitive plans in place to avoid further limited assurance opinions. Recommendation remains valid. Revised Target Date: 31 March 2026 Closed Internal Audit Recommendations As part of their reviews, internal audit make recommendations for management to action. Whilst the IJB have introduced a recommendations tracker, this is not presented to each Audit Committee meeting. Recommendation: The IJB should ensure that the tracker of internal audit recommendations is reviewed periodically and reported to each Audit, Risk & Performance Committee meeting. Tracker has been completed and ownership agreed at OMT meetings, with monthly escalations to SMT on an exception basis. Then if SMT deem it should be escalated to APR a report will be compiled. The IJB have introduced an internal audit recommendations tracker, however this is not presented to each Audit, Performance and Risk Committee meeting. During 2024/25, the IJB have agreed that internal audit recommendations will be reviewed at Operational Management Team (OMT) meetings, with monthly escalations to Senior Management Team (SMT) meetings on an exception basis. If SMT deem any issues require escalation, a report would then be compiled for reporting to the Audit, Performance and Risk Committee. This approach is deemed to be reasonable and recommendation can be closed. Page 67
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow C. Follow up of prior year recommendations (5) 55 Recommendations from the wider scope audit Assessment Issue and risk previously communication Management update on actions taken to address the issue Auditor conclusion Open Performance Report - Recommendation: Management should review the format of the Performance Report and content to ensure it is succinct, focuses on the IJB’s performance and outcomes, and supports the user of the financial statements to understand the IJB’s purpose and achievements in year. Due to continuation of limited staffing resources this has not been able to be achieved in this financial year. The performance will be reviewed for 2025/26 following the approval of the Strategic Delivery Plan which was presented to the Moray IJB Committee on 27 March 2025 There has been no updates to the format of the Performance Report in 2024/25. Recommendation remains valid. Revised Target Date: 31 March 2026 Closed Financial Sustainability – Reserves – Recommendation: The IJB will need to continue to monitor the percentage level of adequate reserves as funding gaps continue to grow and the IJB looks to transformation in future years to ensure reserves do not dip to an unsustainable level. There have been no general reserves maintained in the IJB and the level of earmarked reserves has decreased as they have been used during the year. This recommendation has been superseded by a further recommendation on reserves balances and is now closed. Page 68
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow C. Follow up of prior year recommendations (6) 56 Recommendations from the wider scope audit Assessment Issue and risk previously communication Management update on actions taken to address the issue Auditor conclusion Open Financial Sustainability - Transformation - Recommendation: A depth of pace will need to be undertaken on the transformation programme to ensure the IJB can bridge the significant funding gap in a short space of time, to ensure that not only efficiencies can be delivered but that financial sustainability can be achieved. To ensure financial sustainability for the medium to longer term, the IJB will need to ensure that it is able to deliver increased productivity and efficiency initiatives to reduce costs and deliver financial benefits. The IJB will need to upscale the pace and delivery of transformation to achieve and mitigate the risk of becoming financially unsustainable. Savings plan in place for 2024/25 covered two financial years and the savings plan in place for 2025/26 will again be over more than one financial year. Transformation plans are also part of the savings plan for future years. The IJB understand the need for transformational change however the 2025/26 budget monitoring outlines that the IJB is projecting to overspend by £4.685 million. The recommendation remains relevant as the IJB need to continue to look for alternative means of service delivery which will increase productivity and the efficiency of the service. Recommendation remains valid. Revised Target Date: 31 March 2026 Closed Best Value – External Audit Action Log - Recommendation: Moray IJB should create a mechanism to monitor progress against external audit recommendations and the report should be brought to the relevant Committee on a regular basis to ensure scrutiny and challenge by members. Included in the papers for IJB on 27 March 2025 and will be scrutinised on a regular basis thereafter The IJB presented a report to the Audit, Performance & Risk Committee meeting in March 2025 which provided a progress update on external audit recommendations. This will be a standard agenda item going forward. Page 69
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow C. Follow up of prior year recommendations (7) 57 Recommendations from the wider scope audit Assessment Issue and risk previously communication Management update on actions taken to address the issue Auditor conclusion Open Vision, Leadership and Governance – Internal Audit – Recommendation: Moray IJB should ensure audit recommendation dates are realistic when set and are monitored for implementation. Where dates are moved or not met, a thorough understanding and follow up of these should be sought and explanations provided. A mechanism should be implemented to follow up on officers should missing recommendation deadlines becomes regular. Tracker has been completed and ownership agreed at OMT meetings, with monthly escalations to SMT on an exception basis. Then if SMT deem it should be escalated to APR a report will be compiled. The Internal Audit Annual Report confirmed that the follow-up audits undertaken during 2024/25 found a number of recommendations where revised timescales for the implementation of recommendations were required. The need to revisit audit reviews to evidence the implementation of recommendations has resulted in an additional workload commitment for the Internal Audit Section. The implementation of recommendations is a key determinant in assessing the adequacy and effectiveness of the internal control system. If recommendations are not implemented in a timely manner, then weaknesses in control and governance frameworks will remain. The lack of response to previous recommendations is one of the reasons for the limited audit assurance opinion issued by Internal Audit. Whilst we recognise the IJB have agreed an approach to monitoring existing recommendations, focus must be given to implementing these recommendations. Recommendation remains valid. Revised Target Date: 31 March 2026 Page 70
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow D. Audit fees, ethics and independence 58 Independence and ethics We confirm that there are no significant facts or matters that impact on our independence 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. We have complied with the Financial Reporting Council's Ethical Standard and confirm that we, as a firm, and each covered person, are independent and are able to express an objective opinion on the financial statements. We confirm that we have implemented policies and procedures to meet the requirement of the Financial Reporting Board’s Ethical Standard. 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 and network firms). In this context, there are no independence matters that we would like to report to you. As part of our assessment of our independence we note the following matters: Matter Conclusion Relationship with Grant Thornton We are not aware of any relationships between Grant Thornton and Moray IJB 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 Entity or investments in the organisation 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 IJB 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 Moray IJB. Contingent fees in relation to non-audit services No contingent fee arrangements are in place, note that there are no non-audit services provided. Gifts and hospitality We have not identified any gifts or hospitality provided to, or received from, a member of the organisation's board, senior management or staff. Page 71
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow D. Audit fees, ethics and independence (2) 59 Fees and non-audit services The tables below set out the total fees for audit and other services charged from the beginning of the financial year to the current date, as well as the threats to our independence and safeguards have been applied to mitigate these threats. None of the below services were provided on a contingent fee basis. For the purposes of our audit we have made enquiries of all Grant Thornton teams within the Grant Thornton International Limited network member firms providing services to Moray IJB. The table summarises all non-audit services which were identified. The final audit fee includes additional audit fee of £2,500 which has been agreed with the Chief Finance Officer. The planned audit fee included an additional fee for significant additional work that is required in the wider scope analysis than would usually be expected. This included a more detailed section on financial sustainability appreciating the significance of savings and budget pressures in 2024/25 and beyond. The Annual Audit Report will be considered by the Audit, Performance and Risk Committee on 24 October 2025 including agreement of audit fees. External audit fee Fees for other non-audit services Service Planned Fees Final Fees External Auditor Remuneration - Baseline £36,450 £36,450 External Auditor Remuneration - Additional audit fee £2,500 £2,500 Pooled Costs £920 £920 Contribution to Performance Audit and Best Value £7,000 £7,000 Sectoral cap adjustment (£10,370) (£10,370) 2024/25 Audit Fee £36,500 £36,500 Service Fees £ We confirm that for 2024/25 we did not receive any fees for non-audit services Nil The fees reconcile to the financial statements (round £’000 in the financial statements): • Fees per financial statements £37,000 • Total fees as above £36,500 The final audit fee with the additional fees is £36,500. The total fee is £2,500 higher than the Audit Scotland indicative fee set. Page 72
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow E. Client Service Review 60 Client service We take our client service seriously and continuously seek your feedback on our external audit service. Should you feel our service falls short of expected standards please contact Joanne Brown, Head of Public Sector Assurance Scotland in the first instance who oversees our portfolio of Audit Scotland work (joanne.e.brown@uk.gt.com). Alternatively, should you wish to raise your concerns further please contact Mark Stocks, Partner, 8 Finsbury Circus, London, EC2M 7EA. If you feedback relates to audit quality and we have not successfully resolved your concerns, your concerns should be reported to John Gilchrist, Audit Scotland Quality and Appointments in accordance with the Audit Scotland audit quality complaints process. Transparency Grant Thornton publishes an annual Transparency Report, which sets our details of the action we have taken over the past year to improve audit quality as well as the results of internal and external quality inspections. For more details see Transparency report 2024 (grantthornton.co.uk). Page 73
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Core Core Purple Core White Primary Bright Purple Dark Purple Secondary Teal Coral Neutral Dark Mid Light Yellow Our communication plan Audit Plan Annual Report (ISA 260 Report) Respective responsibilities of auditor and management/those charged with governance Overview of the planned scope and timing of the audit, including planning assessment of audit risks and wider scope risks 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 Moray IJB’s accounting and financial reporting practices, including accounting policies, accounting estimates and financial statement disclosures Significant findings from the audit Significant matters and issues 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 F. Communication of audit matters 61 RECOMMENDED CONTENT – entities OTHER THAN PIEs Guidance note The requirements here are relevant to entities that are not PIEs. For PIEs, delete the slide. Red text may not be applicable and should be either deleted or amended as appropriate. Page 74
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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. GUIDANCE NOTES: Please ensure every presentation has a back page with disclaimer Page 75
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REPORT TO: SPECIAL MORAY INTEGRATION JOINT BOARD ON 30 OCTOBER 2025 SUBJECT: 2024/25 AUDITED ANNUAL ACCOUNTS BY: CHIEF FINANCIAL OFFICER 1. REASON FOR REPORT 1.1 To submit to the Moray Integration Joint Board (MIJB) the Audited Annual Accounts for the year then ended 31 March 2025. 2. RECOMMENDATION 2.1 It is recommended that the Board consider and approve the Audited Annual Accounts for the financial year 2024/25 and the letter of Representation. 3. BACKGROUND 3.1 The Unaudited Annual Accounts for 2024/25 were submitted to the meeting of the Moray Integration Joint Board (MIJB) on 19 June 2025 prior to submission to external audit (paragraph 7 of the Minute refers). 3.2 The Annual Accounts have been prepared in accordance with International Financial Reporting Standards and the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014 and the Local Government in Scotland Act 2003. 4. KEY MATTERS RELEVANT TO RECOMMENDATION 4.1 The audit undertaken by the Board’s External Auditors, Grant Thornton is now complete. The External Auditors have expressed unqualified opinions in respect of the financial statements, the remuneration report, the management commentary and the annual governance statement. The Independent Auditor’s Report to the Members of the MIJB and the Accounts Commission is included within the audited Annual Accounts and can be found on page 56. The audited Annual Accounts are attached at Appendix 1. Item 4. Page 77
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4.2 Attached at Appendix 2, is the letter of representation to the External Auditors from the members of the MIJB, for approval by Committee to be signed following this meeting. 4.3 The audit process highlighted changes to be made to the accounts which in the main were presentational and in parallel with expectation following external audit inspection. 4.3 The Auditor’s Annual Audit Report to the MIJB and the Accounts Commission is the subject of a separate report to this meeting. The report sets out the responsibilities of Grant Thornton as the independent auditor and presents a summary of the findings arising from the 2024/25 audit. The report confirms there are no unadjusted misstatements in the annual accounts to report to those charged with governance. 4.4 The Audited Annual Accounts are presented to this meeting for consideration and approval. Thereafter, the Chief Officer, Chief Financial Officer and the Chair of the Board will sign the accounts prior to submission to Grant Thornton prior to publication. 5. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) and Moray Integration Joint Board Strategic Plan “Partners in Care 2022 – 2032” The Audited Annual Accounts have been completed within the statutory timescales and are being presented for consideration and sign off. (b) Policy and Legal The Public Bodies (Joint Working) (Scotland) Act 2014 requires that the MIJB is subject to the audit and accounts provisions of a body under Section 106 of the Local Government (Scotland) Act 1973. (c) Financial implications The adjustments and revisions made to the Annual Accounts following the external audit had no financial impact on the MIJB. (d) Risk Implications and Mitigation There are no risk issues arising directly from this report. The work undertaken by Audit Scotland provides assurance to the Board that the Annual Accounts for 2024/25 give a true and fair view in accordance with applicable law and the 2024/25 Code of the state of affairs of the MIJB as at 31 March. (e) Staffing Implications None arising directly from this report. (f) Property None arising directly from this report. (g) Equalities/Socio Economic Impact Page 78
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None arising directly from this report as there is no resultant change in policy. (h) Climate Change and Biodiversity Impacts There are no direct climate change and biodiversity implications as there has been no change to policy. (i) Directions None arising directly from this report (j) Consultations In preparation of the Annual Accounts, consultations have taken place between finance staff of both Moray Council and NHS Grampian who are in agreement within their areas of responsibility. The Chief Officer has been consulted and comments have been considered. 6. CONCLUSION 6.1 Following a completed external audit process and an unqualified opinion being received. The Audited Annual Accounts are presented here for approval and formal sign off. Author of Report: Deborah O’Shea, Chief Financial Officer Background Papers: With author Ref: Page 79
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 Page 80
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 If you need information from the Moray Council in a different language or format, such as Braille, audio tape or large print, please contact: ياروم سلجم لبق نم تامولعم لىإ ةجاح ي ف متنك اذإ نوكتو ةغلب وأ ويدوأ ةناوطسأ ،يا ربلا لثم فلتخم لكش لىعوأ ةفلتخم نوكت نأ مط ب لاصّتلإا ءاجّرلاف ةظيلغ فورح لامعتساب ةعوب Jei pageidaujate tarnybos Moray tarybos teikiamą informaciją gauti kitokiu formatu, pvz., Brailio raštu, garso įrašu ar stambiu šriftu, kreipkitės: Jeśli potrzebują Państwo informacji od Rady Okręgu Moray w innym formacie, takim jak alfabet Braille'a, kasety audio lub druk dużą czcionką, prosimy o kontakt: Se necessitar de receber informações por parte do Concelho de Moray num formato diferente, como Braille, cassete áudio ou letras grandes, contacte: Ja Jums vajadzīga informācija no Marejas domes (Moray Council) citā valodā vai formātā, piemēram, Braila rakstā, audio lentā vai lielā drukā, sazinieties ar: ای نابز رگید یسک ےس لسنوک ےروم وک پآرگاتروص راکرد تامولعم ںیم لاثم ںوہ ˝ ،فورح ےڑب ای پیٹ ویڈآ ،ےلیربںیئامرف ہطبار رک امرف ینابرہم وت: Chief Finance Officer to the Moray Integration Joint Board, High Street, Elgin, IV30 1BX accountancy.support@moray.gov.uk Page 81
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 Table of Contents MORAY INTEGRATION JOINT BOARD MEMBERS 2024/25 .............................................. 1 MANAGEMENT COMMENTARY .......................................................................................... 2 STATEMENT OF RESPONSIBILITIES ............................................................................... 27 REMUNERATION REPORT ............................................................................................... 29 ANNUAL GOVERNANCE STATEMENT ............................................................................. 33 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT ..................................... 44 MOVEMENT IN RESERVES STATEMENT ........................................................................ 45 BALANCE SHEET .............................................................................................................. 46 NOTES TO THE FINANCIAL STATEMENTS ..................................................................... 47 Note 1 Significant Accounting Policies ............................................................................. 47 Note 2 Critical Judgements and Estimation Uncertainty .................................................. 48 Note 3 Events after the Reporting Period ........................................................................ 49 Note 4 Expenditure and Income Analysis by Nature ........................................................ 49 Note 5 Taxation and Non-Specific Grant Income ............................................................. 50 Note 6 Debtors ................................................................................................................ 50 Note 7 Usable Reserve: General Fund ............................................................................ 51 Note 8 Agency Income and Expenditure .......................................................................... 52 Note 9 Related Party Transactions .................................................................................. 53 Note 10 VAT .................................................................................................................... 55 Note 11 Accounting Standards That Have Been Issued but Have Yet To Be Adopted .... 55 INDEPENDENT AUDITORS REPORT…………………………………………………………...56 Page 82
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 1 MORAY INTEGRATION JOINT BOARD MEMBERS 2024/25 Voting Members Dennis Robertson (Chair) Grampian Health Board Tracy Colyer (Chair) Moray Council (Resigned 26/09/2024) Elaine Kirby (Chair) Moray Council (21/11/2024 to 31/07/2025) Bridget Mustard (Vice-Chair) Moray Council (Joined 1/08/2025) Sandy Riddell Grampian Health Board Derick Murray Grampian Health Board Alex Stephen Grampian Health Board (Joined 1/7/2024) Cllr. Peter Bloomfield Moray Council Cllr. Scott Lawrence Moray Council Cllr Ben Williams Moray Council Non-Voting Members Simon Bokor-Ingram Chief Officer (left 31/5/2024) Judith Proctor Chief Officer (Joined 15/7/2024) Jim Lyon Interim Chief Social Work Officer (Joined 3/6/2024) Tracey Stephen Chief Social Work Officer (left 17/6/2024) Jane Ewen Lead Nurse Professor Duff Bruce Non Primary Medical Service Lead Dr Robert Lockhart GP Lead Dr Malcolm Simmons GP Lead (left 31/3/2025) Janette Topp Third Sector Stakeholder (19/4/2024 – 11/2/2025) Sheila Brumby Service User Rep. (Joined 19/4/2024) Ivan Augustus Carer Representative Kevin Todd Moray Council Staff Representative Elizabeth Robinson Public Health Representative Deirdre McIntyre Grampian Health Board Staff Partnership Page 83
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 2 MORAY INTEGRATION JOINT BOARD MEMBERS 2024/25 Continued Co-opted Members Sean Coady Head of Service and Deputy Chief Officer Deborah O’Shea Chief Finance Officer Adam Coldwells Interim Chief Executive Grampian Health Board Roddy Burns Chief Executive, Moray Council (retired 31/5/2024) John Mundell Interim Chief Executive, Moray Council (2/4/2024 – 14/3/2025) Karen Greaves Chief Executive, Moray Council (Joined 17/3/2025) Sonya Duncan Interim Corporate Manager . MANAGEMENT COMMENTARY The Role and Remit of the Moray Integration Joint Board The Public Bodies (Joint Working) (Scotland) Act 2014 required that Moray Council and Grampian Health Board prepared an Integration Scheme for the area of the local authority detailing the governance arrangements for the integration of health and social care services. This legislation resulted in the establishment of the Moray Integration Joint Board (MIJB) that became operational from 1 April 2016. Moray Council and Grampian Health Board, as the parties to the Integration Scheme, each nominate voting members to the MIJB, currently, four elected members from Moray Council and four Grampian Health Board members. Under the Public Bodies (Joint Working) (Scotland) Act 2014, a range of health and social care functions have been delegated from Moray Council and Grampian Health Board to the MIJB who has assumed responsibility for the planning and operational oversight of delivery of integrated services. MIJB also has a role to play in the strategic planning of unscheduled acute hospital based services provided by Grampian Health Board as part of the ‘set aside’ arrangements. Hosted services also form part of the MIJB budget. There are a number of services which are hosted by one of the three IJB’s within Grampian Health Board area on behalf of all the IJBs. Responsibilities include the planning and operational oversight of delivery of services managed by one IJB on a day to day basis. MIJB has responsibility for hosting services relating to Primary Care Contracts and the Grampian Medical Emergency Department (GMED) Primary Care Out of Hours service. Page 84
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 3 MANAGEMENT COMMENTARY (continued) Key Purpose and Strategy Following review and consultation, the refreshed Strategic Plan (2022-2032) is a continuation of the 2019 Strategic Plan. The current plan emphasises the strength of integration and in addition to our two main Partners – Moray Council and Grampian Health Board - the MIJB recognises the importance of the Third and Independent Sectors and Unpaid Carers, in facilitating the successful operation of the partnership of Health & Social Care Moray. As with all health and social care systems Moray is facing increasing demand for services at the same time as resources – both funding and workforce availability - are under pressure. These challenges will intensify in the coming years as our population ages and more people with increasing complex needs require support to meet their health and care needs. The MIJB sets the direction and strategic intent through the development and implementation of the Strategic Plan and seeks assurance on the management and delivery of services through Board level performance reporting which ensures an appropriate level of scrutiny and challenge. The Strategic Plan identifies priority areas to support strategic direction and vision. STRATEGIC PLAN KEY THEMES MANAGEMENT COMMENTARY (continued) BUILDING RESILIENCE – Taking greater responsibility for our health and wellbeing HOME FIRST – Being supported at home or in a homely setting as far as possible PARTNERS IN CARE – Supporting citizens to make choices and take control of their care and support WE ARE PARTNERS IN CARE OUR VISION: “We come together as equal and valued partners in care to achieve the best health and wellbeing possible for everyone in Moray throughout their lives.” OUR VALUES: Dignity and respect; person-led; care and compassion; safe, effective and responsive OUTCOMES: Lives are healthier – People live more independently – Experiences of services are positive – Quality of life is maintained/improved – Health inequalities are reduced – Carers are supported – People are safe – The workforce continually improves – Resources are used effectively and efficiently Page 85
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 4 The Plan purposefully places an emphasis on prevention and early intervention activities and seeks to prioritise these activities as a long term goal, actively pursuing good health and wellbeing for the population, with increased investment in this area of work. It highlights the Home First approach and the rationale for this is to assist people in understanding that “hospital is not always the best place for people”, a statement frequently used and in particular if you are frail and elderly can be counter intuitive to a successful recovery. Initiatives to transform services in response to high levels of demand continue. The Moray Strategic Plan was refreshed in 2022 and along with the associated delivery plan, which was updated in May 2025, highlights key priorities for transformation. Population Moray is a largely rural area covering a land mass of 2,238 sq. km. It has a long coastline on the Moray Firth with harbours, fishing villages and world-class beaches. From the 2022 census, the area’s population is 93,4001, which is an increase of 0.1% since 2011. The population growth in Moray is slowing and it is projected that the population in Moray will start to decline by 2030. This trend is forecast to continue. The main centre of population is Elgin, which is home to more than one quarter of the people living in Moray. Other towns of population between 4,000 and 10,000 are Forres, Buckie, Lossiemouth and Keith. The table below sets out projected population growth based on the 2022 baseline, which has not changed from the 2018 publication. Across Scotland there is a projected reduction in those in the 0-15 age group, limited change in the working age population, but significant growth in adults of pensionable age. By comparison it is projected that Moray will have a greater decrease in children, a marked decrease in those of a working age, but a significantly higher change in those of a pensionable age2. MANAGEMENT COMMENTARY (continued) 1 Scotland's Census 2022 - Rounded population estimates - data | Scotland's Census 2 Population Projections for Scottish Areas 2018-based - National Records of Scotland (NRS) -22.2% -9.0% 30.8% -10.5% -0.2% 23.2% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Children (0-15) Working Age Pensionable age and overProjected change (%) Age Group Projected percentage change in population (2018- 2043) by age Moray Scotland Page 86
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 5 Performance Reporting Performance is reported quarterly to the Audit, Performance and Risk Committee of the MIJB. In addition to the quarterly reporting, there is a requirement under the Public Sector (Joint Working) (Scotland) Act 2014 for the MIJB to produce and publish an Annual Performance Report setting out an assessment of performance in planning and carrying out the delegated functions for which they are responsible. The Annual Performance Report is due to be published by 31 July this year and will be published on the Health & Social Care Moray website, once approved by the MIJB. One of the major aims of integration and a key measurable target for MIJB is to reduce the number of Moray residents that are ready to be sent home from hospital but have been delayed in this process. This is referred to as a ‘delayed discharge’. Delayed discharge can occur due to many reasons but quite often involves the onward provision of social care which can be complex in nature and/or finite in its availability. Figures 1 and 2, below, notes Moray’s performance over a six-year period showing the number of delayed discharge bed days occupied varying significantly and with minimal seasonal pattern up to March 2025. Delayed discharges reduced during the COVID pandemic and the lock down periods, as people stayed in their own homes as per advice at the time and there was more availability of family members to support care needs. Notably, delayed discharges began to rise in Moray and across the country in March 2022 and work commenced across the three partnerships in Grampian to address the issue. Results in this activity can be seen from March 2023 onwards. However, winter 2023 saw delayed discharges increasing, in Moray and across the country and continues at an increased level. Figure 1 MANAGEMENT COMMENTARY (continued) Page 87
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 6 Figure 2 There continues to be a focus on ensuring people are getting home quickly and can maintain their independence. In figures 3 and 4, below, the rate of emergency occupied bed days for over 65 years of age per 1000 population has increased since 2021/22 with a slow decrease since March 2023. With an ageing population the number of people delayed at any one time could increase again unless viable, sustainable alternative community provision is developed. Presentations to hospital from an older population have more acuity and complexity, exacerbating the issue of delays. The Scottish Government have now set targets for delayed discharges per 100,000 and for Moray the target is 26. This presents a challenge, but efforts continue to review and streamline processes and improve flow across the system. The importance of integration across the system is key to making progress, and over the year teams have enhanced communication and decision making as a Moray system. There has been further redesign of pathways and dedicated resource assigned to supporting critical decision making in social care. This has all supported the steady progress that is evident from the national comparisons of Moray’s performance. 0 200 400 600 800 1000 1200 1400 1600 Jun Sep Dec Mar Number of bed days occupied by delayed discharges 18+ at census date 2020/21 2021/22 2022/23 2023/24 2024/25 Page 88
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 7 MANAGEMENT COMMENTARY (continued) Figure 3 The figures for 2019/20 and 2020/21 have been restated as these figures are subject to change as more patients are discharged from hospital and when there is a annual mid year population estimate. The figures now included are accurate and in line with reports elsewhere. Figure 4 1500 1700 1900 2100 2300 2500 2700 2900 Jun Sep Dec Mar Rate of Emergency Occupied Bed Days for over 65s per 1000 population 2020/21 2021/22 2022/23 2023/24 2024/25 Page 89
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 8 MANAGEMENT COMMENTARY (continued) Moray Integration Joint Board (MIJB) The MIJB has scrutinised and directed the delivery of services in line with the Integration Scheme and Strategic Plan while recognising that the cost base has to change as the level of available budget in real terms is reducing. Both funding partners (Moray Council and NHS Grampian) have significant savings to achieve, and against this backdrop the MIJB directed a series of workshops during the year to support officers in their work. The focus has continued to be on achieving the highest quality and safety possible within a diminished budget, while being most efficient, and achieving the best possible outcomes for our residents. The Strategic Plan aspires to increasing spend on preventative work, “upstream” to tackle issues earlier, preventing crises where possible and reducing demand. However, a key challenge going forwards will be to continue that focus at a time when budgets are under so much pressure and people are presenting with increasingly complex needs. Performance The MIJB, its committees and the Health and Social Care Partnership Senior Management Team receive regular assurance reports and updates on how the Strategic Plan commitments are being progressed through work streams and individual service plans, as well as detailed financial and performance updates. The strategic risk register was reviewed by the Moray Integration Joint Board and Senior Management Team. It was approved in May 2025 and will form part of a robust risk monitoring framework in order to identify, assess and prioritise risks related to the delivery of services, particularly any which are likely to affect the delivery of the Strategic Plan. The inherent risks being faced by the MIJB, together with a current assessment on the level of the risks and mitigating actions being taken to reduce the impact of the risks, is reported to biannually to the Audit Performance and Risk Committee for oversight and assurance. Management teams and the Care and Clinical Governance Group review and respond to any reports produced by Audit Scotland, Healthcare Improvement Scotland, the Care Inspectorate, and the Mental Welfare Commission for Scotland. Quarterly performance reports are produced for Health and Social Care Moray (HSCM) management to review performance and to determine actions required to address areas for concern or to highlight areas showing improvement. This information is further scrutinised by the Senior Management team and then reported to the MIJB’s Audit, Performance and Risk Committee. There are many initiatives and ongoing projects being undertaken by HSCM that are seeking to reduce the delays in hospitals and to meet unmet needs. For example, ensuring the provision of care at home is maximised within available budget is a key aspect of the Strategic Care at Home workstream. Page 90
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 9 MANAGEMENT COMMENTARY (continued) Research into the type of equipment, benefits and impacts is being undertaken by the Digital Health Institute as part of the Growth Deal which will inform our Technology Enabled Care and Digital strategy which will provide other options for supporting people to live independently in their own homes. The collaborative initiative Discharge Without Delays being undertaken by partners across NHS Grampian, is aiming to reduce delays currently experienced by people who are medically fit to return home and is being facilitated by Health Intelligence Scotland. Whole system outcomes have been determined which will be incorporated into the revised performance report to this committee for 2025/26. The integration of Children & families and Justice services into Health & Social Care Moray under the direction of the MIJB is not yet reflected in the Board’s Strategic Plan. Work in ongoing to ensure appropriate governance of performance reporting so that it can be included in future MIJB Annual Performance Reports. Strategy and Plans The MIJB is required to review its Strategic Plan every three years as per the legislation. The Strategic Plan 2022-2032 places an emphasis on prevention and early intervention with the aim of building resilience for individuals and communities. The Plan identified key aims of the MIJB and directed HSCM to work closely with communities and key partners to reform the system of health and social care in Moray. It was also recognised that progress has been made against the three strategic themes and the review of the Plan focused on what already has been achieved the long-term strategic objectives make room for adapting to challenges and developments in health and social care over the coming years. The current Strategic Plan sets out the 3 key themes and the objectives; • Building Resilience – supporting people to take greater responsibility for their health and wellbeing. • Home First – supporting people at home or in a homely setting as far as possible. • Partners in Care – supporting citizens to make choices and take control of their care and support. Page 91
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 10 MANAGEMENT COMMENTARY (continued) Staff Wellbeing Health & Social Care Moray’s Health Improvement Team has achieved the Paths for All Walk at Work Award for its innovative efforts to promote physical activity in the workplace and encourage colleagues to boost their health and wellbeing through daily walking. Morgan McKay, Health Walk Coordinator, led the team in developing initiatives to get colleagues moving more. She carried out a travel survey to identify how staff travel to and from work and used the data to develop a plan to increase workplace activity. The team mapped convenient walking routes from two key work locations in Elgin – the Moray Council Annexe and Dr Gray's Hospital – offering both 30-minute and 15- minute options. To encourage staff to keep walking no matter the weather, Morgan arranged for umbrellas to be available for borrowing and designated areas for drying wet outdoor gear. Staff engagement was further boosted through participation in the Paths for All step count challenge, a twice-yearly walking initiative that connects Scottish workplaces in friendly competition. The Walk Moray project supports a network of trained volunteers to deliver a variety of weekly low-level, accessible and friendly health walks in communities across Moray which are a great way to increase your activity levels. Promoting Health and Wellbeing Health & Social Care Moray (HSCM) teamed up with community partners to highlight the importance of eating well and staying hydrated during Nutrition and Hydration Week. The national campaign aims to highlight how proper food and drink intake plays a vital role in overall health, particularly for people in care settings such as hospitals and care homes. Malnutrition and dehydration are often overlooked but can have serious consequences, leading to hospital admissions, longer hospital stays, delayed recovery, and a decline in overall wellbeing. HSCM is tackling this issue head-on with an exciting lineup of activities designed to educate, engage, and inspire action by colleagues and the wider public. Throughout the week, HSCM’s Health Improvement Team has been helping local partners host a variety of activities including information stands; launch of new food and drink initiatives; daily themed food days; poster displays; themed drinks trollies; and tea parties. Page 92
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 11 MANAGEMENT COMMENTARY (continued) Service Delivery/Business as Usual HSCM continues to invest in the delivery of high-quality services through commissioning activity across mental health, advocacy, and primary care. Following a competitive procurement process, Scottish mental health charity SAMH (Scottish Action for Mental Health) has been awarded contracts to deliver adult mental health community support services in Moray until 2029. SAMH will provide two key services: an intensive recovery service for individuals with higher-level mental health needs, and a new community support service, which includes delivery of the Distress Brief Intervention (DBI) programme. The intensive recovery service will continue to support people receiving care from hospital or community mental health teams, offering enhanced, community-based outreach to promote recovery and independent living. The new community support service will provide short-term, practical assistance to help individuals access appropriate support and tackle factors affecting their mental wellbeing. DBI will offer a rapid response to individuals in emotional distress, particularly those presenting to emergency or crisis services. As part of ongoing efforts to support people to have their voices heard, HSCM has commissioned VoiceAbility as its new independent advocacy service provider. Launched in October 2024, this free and confidential service is available to adults accessing social care services in Moray, including those with mental health conditions, learning disabilities, autism, dementia, physical and sensory disabilities, as well as unpaid carers. VoiceAbility's trained advocates support individuals to understand their rights, express their views, and take an active role in decisions affecting their health and wellbeing. A new contract has also been awarded to secure the future of GP services in Aberlour Medical Practice, with Speyside Medical Group appointed as the new provider from April 2025. The experienced partnership of eight GPs currently operates Grantown-on-Spey and Glenlivet Medical Practices and will bring its expertise to serve the 3,000 patients in Aberlour. The practice had been under interim management by HSCM and NHS Grampian since February 2024, following the withdrawal of the previous sole GP contractor. Page 93
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 12 MANAGEMENT COMMENTARY (continued) The aim of a Community Appointment Day (CAD) is to create the right conditions to allow clinicians to support people with their condition and beyond, lean into the local community services, embed personalised care and focus on prevention. With the intention of addressing increasing waiting lists by trialling a new model of care, NHS Grampian delivered their first CAD in Moray for MSK Physiotherapy and Podiatry patients. This was a new way of working, moving away from treatment led health and delivering services differently by strengthening local partnerships, particularly with communities, to enhance both patient and practitioner experience. There were 210 patients on the waiting list who were all invited, with 162 opted to attend and 120 attending on the day. Patients were linked their own online Personal Health Passport, which was completed by them as they moved around the zones. Patients received a one-to-one consultation with the appropriate clinician and were encouraged to have meaningful conversations about what matters most to them. The CAD followed Realistic medicine principles, focusing on personalised and values-based care. The voice of lived experience was heard throughout the planning process by involving the local Versus Arthritis Chronic Pain Group who offered valuable feedback and guidance. 19 community groups and partner services were in attendance to provide information about the support available within the local community. Bringing health and community organisations together under one roof, allowed people’s health and wellbeing to be viewed in full totality. Preliminary Feedback was largely positive, indicating that patients felt the day had been ‘enlightening’, benefited greatly from having services available in one place and found out about what is available in communities. Page 94
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 13 MANAGEMENT COMMENTARY (continued) Longer Term Changes to Strategies and Plans Moray Community Justice Partnership The Moray Community Justice Partnership has formally launched its new improvement plan, which will bring together local agencies and communities to strengthen efforts to make Moray a safer place to live and work. The five-year plan focuses on rehabilitation and public safety. It builds on existing work to reduce reoffending and minimise the number of victims by offering individuals who have offended support to make positive life changes. The local priorities for improving justice outcomes were identified through engagement with community justice stakeholders and residents, and a strategic assessment of Moray's strengths and needs. By 2029, the Moray Community Justice Partnership aims to: • Strengthen engagement with communities to reduce stigma, increase understanding and support for community justice, and embed lived experience within its work; • Improve access to support for individuals leaving prison to aid reintegration; • Expand access to employability skills and employment opportunities for those with convictions; • Enhance support for individuals in police custody; • Develop more community-based restorative justice options. Significant progress in reducing drug and alcohol-related harms and improving lives across communities has been achieved through the work of the Moray Alcohol and Drug Partnership (ADP). Moray ADP has made notable progress in implementing the national Medication Assisted Treatment (MAT) standards, which are a key part of Scotland’s response to the ongoing drug related deaths crisis. The standards provide a framework ensuring treatment is safe, person-centred and effective. Improved referral pathways, delivered through a third sector direct access service, have reduced waiting times for people and enabled faster access to support. Feedback from lived experience groups has shaped pathways into and through Page 95
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 14 MANAGEMENT COMMENTARY (continued) services to better reflect the realities of people’s lives, leading to improved outcomes, while frontline staff have benefitted from continued training on rights awareness, trauma informed practice and crisis response. Strategic Delivery Plan A revised Strategic Delivery Plan for 2025 to 2028 was approved in draft by MIJB in March 2025 and final version in May 2025. This plan incorporates the developments required to enhance our ability to meet predicted future demands for services, whilst undertaking reviews of existing models of care to ensure that the services provided are sustainable and fit for purpose. There are also projects to implement more efficient ways of working, to aid in meeting the financial challenge that is impacting on all public sector organisations. A robust governance framework will be essential to ensure that projects can be delivered within available resources and have a clear focus on outcomes Joint Inspection Moray's multi-agency Public Protection Partnership has evidenced substantial improvement in supporting and protecting adults at risk of harm The positive impact achieved by local authority, health and police colleagues in their work to keep people safe, has been acknowledged with publication in October 2024 of the Joint Inspection of Adult Support and Protection in Moray. The progress review by the Care Inspectorate and its scrutiny partners was a follow-up to a joint inspection carried out in 2022. On their return, inspectors found significant progress had been achieved across all seven priority areas identified for improvement. Mental Health Strategic Delivery Plan The Moray Mental Health and Wellbeing Delivery Plan 2024-2026 was approved by the MIJB in September 2024 and was updated in May 2025, which underpins the work required to progress the Moray Mental Health and Wellbeing Strategy 2016- 2026. Scotland is currently facing a growing mental health crisis, with challenges including rising demand for services, increased complexity of cases, and persistent inequalities in access and support. While there is a focus on developing and expanding services, significant workforce challenges, and funding shortfalls continue to hinder progress. Many of these challenges are amplified in Moray due to the rural nature of many of our communities, difficulties in the recruitment and retention of staff, and access to specialist tertiary services. Page 96
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 15 MANAGEMENT COMMENTARY (continued) The Moray Adult Mental Health and Wellbeing Strategic group aim to ensure that the collective voice of lived and living experience influences the way that we design services and responses to address the challenges facing individuals and families affected by mental health in Moray. The group work closely with Moray Wellbeing Hub, Making Recovery Real Partnership and tsiMoray to achieve this; for example, the involvement of lived experience in service development, commissioning, implementation and evaluation of the recently commissioned SAMH projects. The alignment of Children’s Services and Adults Services mental health strategic planning and delivery is essential. Within Moray there is currently a Children’s Mental Health and Wellbeing Partnership and there is the Moray Mental Health and Wellbeing Strategic Group. There is a degree of cross representation between both groups to ensure shared planning however, there remains the medium term vision for there to be a single strategic group for children and adult mental health services in Moray. Financial Review and Performance Financial performance forms part of the regular reporting cycle to the MIJB. Throughout the year the Board, through the reports it receives, is asked to consider the financial position at a given point and any management action deemed as necessary to ensure delivery of services within the designated financial framework. From the first quarter in the financial year, the Board was presented with financial information that included a forecast position to the end of the year. In November 2024 the Board received a financial report which forecast an expected overspend to the end of the financial year of £5.58m. This forecast remained consistent throughout the remainder of the year and in January 2025, MIJB were forecasting an overspend to the end of the year of £5.51m, the MIJB actually out turned at £4.26m overspent. Both partners in line with the Integration Scheme, put in additional funding to cover this overspend, so with the use of ear marked reserves totalling £0.536m, this leaves a balance of £1.45m in ear marked reserves to be carried forward into 2025/26. In May 2024, the MIJB agreed a savings plan of £8.297m, with a mixture of recurring savings and recurring reductions in spend. At the end of the financial year, this had been achieved in part, with recurring savings of £2.302m and £2.331m reduction in overspend. Given the uncertainties associated with funding and the emerging overspend position at the early stage of the financial year, it was necessary to update the Board regularly on the emerging financial position. This was done formally through MIJB meetings and informally through development sessions. Page 97
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 16 MANAGEMENT COMMENTARY (continued) Service Area Budget £000’s Actual £000’s Variance (Over)/ under spend £000’s Note Community Hospitals & Services 7,701 8,329 (628) Community Nursing104,360 5,979 6,166 (187) Learning Disabilities 17,702 19,975 (2,273) 1 Mental Health 12,140 12,055 85 Addictions 1,907 1,763 144 Adult Protection & Health Improvement 249 273 (24) Care Services Provided In-House 24,743 22,754 1,989 2 Older People Services & Physical & Sensory Disability 24,775 27,034 (2,259) 3 Intermediate Care & OT 1,771 1,972 (201) Care Services Provided by External Contractors 1,836 1,817 19 Other Community Services 10,383 10,280 103 Administration & Management 3,333 3,152 181 Other Operational Services 1,377 1,535 (158) Primary Care Prescribing 18,748 21,937 (3,189) 4 Primary Care Services 21,427 21,331 96 Hosted Services 5,713 5,665 48 Out of Area Placements 720 1,971 (1,251) 5 Improvement Grants 1,207 1,021 186 Children’s & Justice Services 19,524 19,626 (102) Total Core Services 181,235 188,656 (7,421) Strategic Funds & Other Resources 14,891 6,020 8,871 6 TOTALS (before set aside) 196,126 194,676 1,450 Set Aside 15,639 15,639 - TOTAL 211,765 210,315 1,450 The table above summarises the financial performance of the MIJB by comparing budget against actual performance for the year. Page 98
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 17 MANAGEMENT COMMENTARY (continued) Significant variances against the budget were notably: Note 1 Learning Disabilities (LD) – The LD service is overspent by £2,272,694 at the year-end. The overspend is essentially due to the purchase of care for people with complex needs which resulted in an overspend of £2,806,801 and client transport of £13,781. This is offset by more income received than expected of £524,800 (income due from another authority and Change Fund funds from NHS) and other small underspends of £18,619 which primarily relate to property costs. There was a minor underspend of £4,469 in other Learning Disabilities clinical services. This budget has been under pressure for a number of years due to demographic pressures, transitions from Children’s services and people living longer and getting frailer whilst staying at home. The biggest overspends was for services provided to individuals in their own homes to support their daily living needs which enables people to stay living at home or in a homely setting for as long as possible and day care which provides activities during the day in the community. Note 2 Care Services Provided In-House – This budget is underspent by £1,988,757 at the end of the year. This relates to underspend in staffing across all the services in this budget totalling £2,291,755 and other minor underspends of £8,275 which is being reduced by overspends relating to transport costs £97,970; insurance costs £29,047, utility costs £62,430 and less income than expected £121,826. Unfilled vacancies have been the main reason for the underspend throughout the year, and the issue of recruitment has been an ongoing problem. Note 3 Older People Services and Physical & Sensory Disability - This budget is overspent by £2,259,056 at the end of the year. This primarily relates to overspends for home care in the area teams £539,818, permanent care £1,766,157 due to the increase in the number of clients receiving nursing care rather than residential care and respite care £105,776 this is being reduced by an underspend for day care £152,695. The variances within this overall budget heading reflect the shift in the balance of care to enable people to remain in their homes for longer. The ageing population requiring more complex care and local demographics also contributes to this overspend as well as the correlation between the recruitment and retention of the internal home care service provision. Note 4 Primary Care Prescribing - The primary care prescribing budget is reporting an over spend of £3,189,386 for the twelve months to 31 March 2025. The overall average price has remained relatively consistent and includes cost reduction savings identified by Pharmacy implemented countered by the impact of short supply causing an increase in costs. This is spread across a range of products and is ongoing. This overall volume increase at 3.5% is less than previously anticipated. Note 5 Out of Area Placements – This budget is overspent by £1,250,899 at the year end. This is due to the continuing number of high cost individual specialised NHS placements. Page 99
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 18 MANAGEMENT COMMENTARY (continued) Note 6 Strategic Funds and Other Resources – This budget is underspent by £8,871,064 as it relates to savings achieved during the year, any unallocated funding and reserves balances. MIJB’s financial performance is presented in the comprehensive income and expenditure statement (CIES), which can be seen on page 44. At 31 March 2025 there were ear marked reserves of £1.45m available to the MIJB, compared to £1.986m at 31 March 2024. These remaining reserves of £1.45m are for various purposes as described below: Earmarked Reserves Amount £000’s GP Premises 39 National Drugs MAT 250 OOH Winter Pressure funding 172 Moray Cervical screening 35 Moray hospital at home 5 Moray Psychological 315 MHO Funding 138 Adult protection funding for CA 18 Adult Disability payment 45 National Trauma Training services 62 Moray School Nurse 32 Moray Winter Fund HCSW & MDT 182 LD Annual Health Checks 69 Community Planning partnership 2 Moray District Nurses 56 OOH Dev Fellowship scheme 30 Total Earmarked 1,450 General Reserves 0 TOTAL Earmarked & General 1,450 Page 100
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 19 MANAGEMENT COMMENTARY (continued) GP Premises – balance of funding for improvement grants including the making of premises improvement grants to GP contractors. The continued digitalisation of paper GP records. Modifications for the purposes of improving ventilation and increase to the space available in NHS owned or leased premises for primary care multi- disciplinary teams. National Drugs Medication Assisted Treatment (MAT) for embedding and implementation of the standards will he be overseen by the MAT implementation support team (MIST). National Drugs Mission Moray – balance of funding for range of activities including: drug deaths, taskforce funding, priorities of national mission, residential rehabilitation, whole family approach, outreach, bear fatal overdose pathways and lived and living experience. Out of Hours Winter Pressure funding – balance of funding to sustain GO out of hours and to support resilience to explore operational solutions. Moray Cervical Screening – balance of funding for smear test catch up campaign. Moray Hospital at home – development of Hospital at Home provides Acute hospital level care delivered by healthcare professionals, in a home context for a condition that would otherwise require acute hospital inpatient care. Moray Psychological – funding streams for mental health, psychological wellbeing, facilities, post diagnostic support and psychological therapies. Mental Health Officer (MHO) funding – funding to support additional mental health officer capacity. Adult protection funding for care at home– balance of funding to build capacity in care at home community based services. Adult Disability payment – funding to assist with the implementation of the adult disability payments. National Trauma Training services – training for dealing with people affected by trauma and adversity. Moray School nurse – funding to support NHS Grampian to retain school nurse posts. Moray Winter Fund Health Care Social Workers (HCSW) – additional funding for further HCSW in both the IJB and Emergency department. Moray Winter fund Multi Disciplinary Team – additional funding for service pressures includes Discharge to Assess, Home First Frailty team and volunteer development. Page 101
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 20 MANAGEMENT COMMENTARY (continued) Learning Disability Annual Health Checks – to implement the annual health checks. Community Planning Partnership – funding towards community planning partnership. Moray District Nurses – allocation to support recruitment and training of District Nurses Out of Hours (OOH) Development Fellowship Scheme – scheme to keep GPs within clinical practice, increase GP’s confidence and competence in OOHs work. All reserves are expected to be utilised for their intended purpose during 2025/26. Set Aside – Excluded from the financial performance table above on page 16 but included within the Comprehensive Income & Expenditure Account is £15.639m for Set Aside services. Set Aside is an amount representing resource consumption for large hospital services that are managed on a day to day basis by the NHS Grampian. MIJB has a responsibility for the strategic planning of these services in partnership with the Acute Sector. Set Aside services include: • Accident and emergency services at Aberdeen Royal Infirmary and Dr Gray’s inpatient and outpatient departments; • Inpatient hospital services relating to general medicine, geriatric medicine, rehabilitation medicine, respiratory medicine, learning disabilities, old age psychiatry and general psychiatry; and • Palliative care services provided at Roxburgh House Aberdeen and The Oaks Elgin. The budget allocated to Moray is designed to represent the consumption of these services by the Moray population. The figures for 2024/25 have been derived by uplifting 2019/20 figures by baseline funding uplift in 2020/21 (3.00%), 2021/22 (3.36%) ,2022/23 (6.70%), and 2023/24 (5.35%) and 2024/25 (6.64%): 2024/25 2023/24 2022/23 2021/22 2020/21 Budget 15.639m 14.665m 13.92m 13.04m 12.62m Page 102
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 21 MANAGEMENT COMMENTARY (continued) Risks, Uncertainties and Future Developments The MIJB Chief Officer has a responsibility to maintain a risk strategy and risk reporting framework. Risks inherent within the MIJB are monitored, managed and reported at Audit, Performance and Risk Committee. In addition, a risk action log is monitored and managed by the Senior Management Team. The key strategic risks of the MIJB classed as ‘High’ and ‘Very High’ are presented below, the risk number relates to the MIJB internal risk numbering: VERY HIGH Risk 2 - The MIJB must operate within the resources allocated to it by the partner bodies and it is good financial practice to set a balanced budget at the start of each financial year. There is a risk that financial pressures being experienced by the funding partners will directly impact the MIJB’s strategic planning of services and its decision-making. Managing the risk – current controls in place – 1. Medium Term Financial Framework (MTFF) approved by MIJB on 27 March 2025. 2. Additional resource to support services a Programme Management Office agreed until September 2025. 3. Tri-partite partnership performance meetings with partner CEOs, Finance Directors and Chair/Vice Chair of MIJB. 4. Operational financial monitoring undertaken by Chief Finance Officer (CFO), Heads of Service (HOS) and Budget Managers. 5. Budget Savings Oversight Group chaired by Chief Officer, attended by HOS, CFO and Service Managers as appropriate. 6. Review of MIJB Strategic Delivery Plan ensuring all projects are aligned with savings plans. Assurances: Quarterly Budget monitoring reporting to APR and MIJB. Financial Reporting through MIJB, NHS Grampian and Moray Council. The Project Management Office will support the Financial Recovery Savings presented as part of the budget setting for 2025/26. Financial Development Sessions with MIJB members. Internal Audit quarterly reporting to APR. External Audits presented to MIJB/ Committees as appropriate. Six weekly Tri-partite partnership performance meetings with partner CEOs, Finance Directors and regular meetings with the Chair/Vice Chair of MIJB. Page 103
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 22 MANAGEMENT COMMENTARY (continued) HIGH Risk 3 - There is a risk that the MIJB’s workforce strategy is not delivered impacting the quality of paid and unpaid Health & Social Care. Managing the risk – Current controls in place 1. Management structure currently under review. 2. Moray Council are aware of the housing issues and are conducting an assessment of needs, including people working in the Health and Care sector. 3. Staff wellbeing is a key focus and there are many initiatives across both parent organisations offering information, support and access to activities. 4. Collaborative approaches with educational institutions e.g. intakes and programmes for future workforce development. 5. Professional Development and retention programmes; Incentives have been secured to attract additional NHS dentists and dental practices to Moray. The Scottish Dental Access Initiative includes Moray, with grants of £50,000 and above available to allow dental practices to be established or extended– provided there is a seven-year commitment to providing NHS treatment. A recruitment and retention bonus is also being offered to eligible new dentists in Moray 6. GP sustainability Group and Primary Care Vison for the Future Groups now progressing across Grampian. 7. iMatter reports are used to develop actions plans for teams. Assurances: Operational oversight by Moray Workforce Forum. The HSCM Response Group continues to focus on leadership around emerging issues and resolving them, including staffing. Risk 5 - There is a risk that the MIJB does not comply with the necessary legislative and regulatory requirements in which it operates. Managing the risk – Current controls in place: 1. NHS Grampian Resilience Standards Action Plan approved (3 year). New standards are being drafted by Scottish Government, and these are expected in 2025 and will replace the current standards. 2. Continuous emergency preparedness awareness with partners under GLRP – including exercises and debriefs. 3. Learning from Inspection Reports, Adverse Events, Complaints – action plans and performance measures monitored by OMT with oversight by SMT. 4. HSCM Civil Contingencies group review specific risks and action plans to mitigate, developing plans and testing arrangements in partnership with NHSG and Council. 5. Annual review of internal resilience and emergency processes with Senior Managers on Call. Page 104
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 23 MANAGEMENT COMMENTARY (continued) HIGH (continued) Assurances: Quarterly reporting to Clinical and Care Governance and Audit, Performance and Risk Committees. Annual Performance Report – published September 2024. Chief Social Work Officers Report. Internal and External Audits. Senior Management Meetings fortnightly. Joint meeting of MIJB Chief Officer with two Partner Body Chief Executives. Annual report on MIJB activity developed and reported to Moray Council and NHSG Risk 6 - There is a risk that the MIJB’s strategic aspirations are not transformative and as a result, we are unable to deliver outcomes for people in a sustainable way. Managing the risk – Current controls in place: 1. Clinical and Care Governance (CCG) Committee. Clinical Risk Management and Practice Governance group has oversight of their respective professional standards and links into Clinical and Care Governance Group, which escalates to CCG Committee as necessary. 2. High and Very High operational health service risks are reviewed by HSCM Clinical Risk Management (CRM) Group and also NHS Grampian CRM Group. 3. Annual Performance Reports. 4. Internal and External Audit. 5. Internal/External Inspection reports are scrutinised by appropriate operational groups and by exception to SLT for subsequent reporting to CCG or APR Committee as appropriate. 6. Care Home Collaborative Support Group meets to oversee and manage risks in care homes. 7. Children and Adult Protection services report to their respective committees. Governance Structure and Process (Senior Leadership Team meetings, Operational Team Meetings, Daily Huddles). Assurances: Audit, Performance and Risk and Clinical and Care Governance Sub-Committees oversight and scrutiny. The Clinical and Care Governance Framework was refreshed and presented to CCG Committee in November 2023 Page 105
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 24 MANAGEMENT COMMENTARY (continued) HIGH (continued) Risk 7 - There is a risk that the MIJB is unable to exert influence on services delegated but hosted within another organisation. Managing the risk – Current controls in place: 1. Chief Officer regularly meets with Chief Officers of Aberdeen City Health and Social Care Partnership and Aberdeenshire Health and Social Care Partnership. 2. Significant changes to service delivery are discussed across all three HSCP’s. 3. Agreement that proposals regard significant service changes are presented to all three MIJB’s for approval. 4. Internal Audit of MIJB Hosted Services. Assurances: These largely come from the systems, process and procedures put in place by NHS Grampian, which are still being operated, along with any new processes which are put in place by the lead MIJB. North East System Wide Transformation Group (Officers only) led by the 4 pan- Grampian chief executives. The aim of the group is to develop real top-level leadership to drive forward the change agenda, especially relating to the delegated hospital-based services. Both the CEO group and the Chairs & Vice Chairs group meet quarterly. The meetings are evenly staggered between groups, giving some six weeks between them, allowing progressive work / iterative work to be timely between the forums. The Portfolio approach and wider system approach demonstrates closer joint working across the three Health and Social Care Partnerships and the Acute Sector. Development Aims for 2025/26 Discharge without Delay & Frailty at the Front Door Health and Social Care Moray is taking part, supported by the MIJB, in the National Collaborative to support Discharge without Delay. This approach supports us in undertaking mapping and self-assessment work and understanding where the application of best practice and learning from other areas can help us improve locally and get people home from an acute setting as quickly and safely as possible. By taking part in this collaborative, we aim to reduce further the number of people delayed in our system and to ensure we apply optimum practice across acute and community setting to do so. Page 106
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 25 MANAGEMENT COMMENTARY (continued) Realignment of Organisational Structures Since its inception the MIJB has sought to ensure the most effective and efficient structures are in place to support the delivery of its strategic aims and overall strategic plan. Over the course of 2025/26 a review of the HSCM organisational structure will take place that will support these aims and ensure that both HSCM and the MIJB have the right resources in place, and the right operational structure to enact our plans, deliver the best outcomes for people and operate sustainably within the current challenging financial conditions. Our organisational structure supports how we deliver our ambitions in our communities and directly with people and is a key enabler in driving progress against our priorities. Strengthening Integration and Oversight of Children, Families and Justice within our system Children, Families and Justice Services were delegated formally to the MIJB in 2023/24 under the integration scheme and there is now reporting of these services within the Clinical and Care Governance structures in place. Moray Council and Councillors retain statutory responsibilities for outcomes for Children and also remain Corporate Parents in respect of those Children and Young People who are cared for or accommodated out with their families. MIJB is committed to ensuring robust reporting across the system that ensures all partners can fulfil their statutory obligations while focussing on improving outcomes for our young people. A review of current reporting arrangements will take place to reduce any duplication in reporting whilst strengthening oversight of performance and delivery. Strengthening Performance Oversight The MIJB approved its Strategic Delivery Plan at its meeting in May 2025, and this now provides a clear line of sight from Strategic Plan to the impact of the programmes, services and initiatives in place to deliver it. Over the course of this year, we aim to further strengthen this line of sight, aligned to the Board’s Risk Appetite Statement, to ensure that our programmes of work are effective in achieving their objectives and represent value for money. Page 107
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 26 MANAGEMENT COMMENTARY (continued) In addition, we will seek to: • Maintain our focus on early intervention and prevention, reducing demand and supporting the resilience of people and communities. We’ll undertake learning from the successful Community Appointment Day which took place in Elgin as a possible model to support this; • Continue to develop how we care for our staff well-being, with staff our most valuable asset; • Provide leadership and participation as key partners in the NHS Grampian led Strategic Change Programme and ensure we explore effective joint working; • Focus our budget setting efforts in the context of the Medium Term Financial Strategy and longer term sustainability. ………………………… ……………………… ……………………… Dennis Robertson Judith Proctor Deborah O’Shea Chair of Moray IJB Chief Officer Chief Financial Officer Page 108
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 27 STATEMENT OF RESPONSIBILITIES Responsibilities of the MIJB • To make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of those affairs. In Moray Integration Joint Board, that officer is the Chief Financial Officer; • To manage its affairs to achieve best value in the use of its resources and safeguard its assets; • Ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014) and so far as is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government in Scotland Act 2003); and • To approve the Annual Accounts. Signed on behalf of the Moray Integration Joint Board Dennis Robertson Chair of Moray IJB Page 109
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 28 STATEMENT OF RESPONSIBILITIES (continued) Responsibilities of the Chief Financial Officer The Chief Financial Officer is responsible for the preparation of the Moray Integration Joint Board’s statement of accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code) 2024/25. In preparing the Annual Accounts the Chief Financial Officer has: • Selected suitable accounting policies and applied them consistently; • Made judgements and estimates that were reasonable and prudent; • Complied with legislation; and • Complied with the local authority code (in so far as it is compatible with legislation). The Chief Financial Officer has also: • Kept proper accounting records that were up to date; and • Taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that the financial statements give a true and fair view of the financial position of the Moray Integration Joint Board as at 31 March 2025 and the transactions for the year then ended. Deborah O’Shea FCCA Chief Financial Officer Page 110
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 29 REMUNERATION REPORT Introduction This Remuneration Report is provided in accordance with the Local Authority Accounts (Scotland) Regulations 2014 (SSI2014/200) as part of the MIJB annual accounts. This report discloses information relating to the remuneration and pension benefits of specified MIJB members. All information disclosed in the tables is subject to external audit. Other sections within the Remuneration Report will be reviewed for consistency with the financial statements. Moray Integration Joint Board The voting members of MIJB are appointed through nomination by Moray Council and Grampian Health Board. There is provision within the Order to identify a suitably experienced proxy or deputy member for both the voting and non-voting membership to ensure that business is not disrupted by lack of attendance by any individual. MIJB Chair and Vice-Chair Nomination of the MIJB Chair and Vice-Chair post holders alternates every 18 months between a Councillor and a Health Board non-executive member. The MIJB does not provide any additional remuneration to the Chair, Vice-Chair or any other board members relating to their role on the MIJB. The MIJB does not reimburse the relevant partner organisations for any voting member costs borne by the partner. The MIJB does not have responsibilities in either the current or in future years for funding any pension entitlements of voting MIJB members. Therefore, no pension rights disclosures are provided for the Chair or Vice-Chair. Taxable Expenses 2023/24 Name Position Held Nomination By Taxable Expenses 2024/25 £ £ - Dennis Robertson Vice-Chair 01/04/24 – 26/09/24; 01/04/2025 to date Chair 27/09/24 to 31/03/25 Grampian Health Board - - Cllr Tracy Colyer Chair 01/04/24 – 26/09/24 Moray Council - - Cllr Elaine Kirby Vice-Chair 21/11/24 – 31/03/25 Chair 1/04/25 to date Moray Council - Page 111
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 30 REMUNERATION REPORT (continued) Officers of the MIJB The MIJB does not directly employ any staff in its own right; however specific post- holding officers are non-voting members of the Board. Chief Officer Under section 10 of the Public Bodies (Joint Working) (Scotland) Act 2014 a Chief Officer for the integration joint board has to be appointed and the employing partner has to formally second the officer to the Board. The employment contract for the Chief Officer will adhere to the legislative and regulatory framework of the employing partner organisation. The remuneration terms of the Chief Officer‘s employment are approved by the Board. Other Officers No other staff are appointed by the MIJB under a similar legal regime. Other non- voting board members who meet the criteria for disclosure are included in the disclosures below. Total 2023/24 Senior Employees Salary, Fees & Allowances Total 2024/25 £ £ £ 122,460 Simon Bokor-Ingram Chief Officer (1/04/24- 31/05/24) 20,268 20,268 - Judith Proctor (from 25/07/24) 95,673 95,673 83,476 Deborah O’Shea Chief Financial Officer 90,729 90,729 In respect of officers’ pension benefits, the statutory liability for any future contributions to be made rests with the relevant employing partner organisation. On this basis there is no pensions liability reflected on the MIJB balance sheet for the Chief Officer or any other officers. The MIJB however has a responsibility for funding the employer contributions for the current year in respect of the officer time spent on fulfilling the responsibilities of their role on the MIJB. The following table shows the MIJB’s funding during the year to support the officers’ pension benefits. The table also shows the total value of accrued pension benefits which may include benefits earned in other employment positions and from each officer’s own contributions. Page 112
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 31 REMUNERATION REPORT (continued) NOTE: no bonuses, expenses allowances, compensation for loss of office or any taxable benefits were made in 2024/25 In Year Pension Contributions Accrued Pension Benefits Year to 31/03/24 Year to 31/03/25 As at 31/03/2025 Difference from 31/03/2024 £ £ £ 000’s £ 000’s Simon Bokor- Ingram, Chief Officer (*) 24,346 4,378 Pension 40 (6) Lump Sum 101 (22) Judith Proctor, Chief Officer - 21,526 Pension 36 9 Lump Sum 99 19 Deborah O’Shea Chief Financial Officer 7,179 20,339 Pension 9 (19) Lump Sum 31 - (*) Simon Bokor-Ingram figures included in the table above, relate to the full year and employment after Chief Officer, as figures are unable to be apportioned. Page 113
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 32 REMUNERATION REPORT (continued) Disclosure by Pay bands As required by the regulations, the following table shows the number of persons whose remuneration for the year was £50,000 or above, in bands of £5,000. Number of Employees in Band 2023/24 Remuneration Band Number of Employees in Band 2024/25 1 £80,000 - £84,999 - - £85,000 - £89,999 1 1 £120,000 - £124,999 - £130,000 - £134,999 1 Exit Packages There were no exit packages agreed by the MIJB during 2024/25 financial year, or in the preceding year. ……………………….. ……………………… Dennis Robertson Judith Proctor Chair of Moray IJB Chief Officer Page 114
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 33 ANNUAL GOVERNANCE STATEMENT The Annual Governance Statement describes the Moray Integration Joint Board’s (MIJB) governance arrangements and reports on the effectiveness of the MIJB’s system of internal control. Scope of Responsibility The MIJB is responsible for ensuring that its business is conducted in accordance with the law and appropriate standards, and that public money is safeguarded and used efficiently and effectively in pursuit of best value. In discharging its responsibilities, the MIJB has established arrangements for its governance which includes the system of internal control. This system is intended to manage risk and support the achievement of the MIJB’s policies, aims and objectives. The system provides reasonable but not absolute assurance of effectiveness. The MIJB places reliance of the systems of internal control of NHS Grampian systems and Moray Council, which supports organisational compliance of policies and procedures in addition to those of the MIJB. Assurances are required on the effectiveness of the governance arrangements of all three organisations, meaning a significant failure in one of the three Partners may require to be disclosed in the annual accounts of all three Partners. The Governance Framework The CIPFA/SOLACE framework for ‘Delivering Good Governance in Local Government’ last updated in 2016 remains current and provides a structured approach in defining seven principles that underpin effective governance arrangements. Whilst the framework is written specifically for Local Government, the principles apply equally to integration authorities, and while the MIJB continues to evolve as an entity in its own right. It continues to draw on the governance assurances of NHS Grampian and Moray Council as its principal funding partners. Given the scope of responsibility within the MIJB and the complexities surrounding the assurance arrangements, a Local Code of Corporate Governance was developed and the MIJB assesses the effectiveness of its governance arrangements against the principles set out in the document. The Code outlines the seven governance principles from the CIPFA/SOLACE guidance (as referenced below) and provides the sources of assurance for assessing compliance relative to the MIJB, Moray Council and NHS Grampian. These assurances include referencing the governance arrangements of NHS Grampian and Moray Council which are summarised annually and published in their respective Annual Governance Statements which form part of the annual accounts of each organisation. The respective governance statements can be found on the individual organisations websites: Moray Council: Annual Accounts - Moray Council and NHS Grampian: https://www.nhsgrampian.org/about-us/annual- accounts/. Page 115
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 34 ANNUAL GOVERNANCE STATEMENT (continued) Key Governance Arrangements All of the scheduled Audit Performance and Risk and Clinical Care Governance Committee meetings were held as timetabled during 2024/25. Health and Social Care Moray (HSCM) established an emergency response group that has been operational since the end of March 2020, this has now transformed into a Daily Response meeting. Representation on the response groups of the Partner organisations is provided by HSCM staff, ensuring the necessary links and flow of information to ensure a co-ordinated response on a pan Grampian basis and locally within Moray. There continues to be governance standards and collaborative working across the whole system, both across the NHS Portfolios and Grampian wide system. The use of a Grampian Operation Performance Escalation System (GOPES) was established to enable senior leaders to have oversight of where pressures were located in the system and to direct responses accordingly. This development has also strengthened the identification of key metric thresholds to inform the levels for escalation. Evaluation of the Effectiveness of Governance Governance Principle 1 – Behaving with integrity, demonstrating strong commitment to ethical values and respecting the rule of law Assessment of Effectiveness • The activities of the MIJB are governed by a Board comprising both voting and non-voting members, drawn from a diverse range of backgrounds to ensure broad representation. The Board meets bi-monthly and is supported by regular development sessions that allow for in depth exploration of key strategic and operational issues. Governance is further strengthened through the work of two committees: the Audit, Performance and Risk Committee, and a Clinical and Care Governance Committee, each with clearly defined remits to support effective governance and assurance. The MIJB operates in accordance with Standing Orders, which set out the rules governing the proceedings of the Board and its Committees. These include the Scheme of Administration which defines the structure and remit of the Board’s committees, ensuring clarity and consistency in governance arrangements. • To uphold high standards of ethical conduct, the MIJB has appointed a Standards Officer. This role supports compliance with the Ethical Standards in Public Life etc. (Scotland) Act 2000, which requires members of devolved public bodies to comply with Codes of Conduct approved by Scottish Ministers. The Standards Officer also ensures alignment with guidance issued by the Standards Commission for Scotland, reinforcing the Board’s commitment to integrity, accountability, and ethical governance. Page 116
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 35 ANNUAL GOVERNANCE STATEMENT (continued) Governance Principle 2 – Ensuring openness and comprehensive stakeholder engagement Assessment of Effectiveness • MIJB’s Standing Orders provide for public and press access to meetings and reports, supporting transparency and accountability. In response to positive feedback and to enhance accessibility, hybrid meetings continued throughout 2024/25. A dedicated website was developed for Health and Social Care Moray and is continuously monitored for improvement, and about to transition to a new platform to further improve the accessibility and quality of information. Agendas, reports and minutes for all committees can be accessed via Moray Council website, alongside links to all relevant strategies of the MIJB. • Both the voting and non-voting membership arrangements of the MIJB are in line with the Public Bodies (Joint Working) (Integration Joint Boards) (Scotland) Order 2014. There are eight voting members, four are elected members appointed by Moray Council and four are non-executive members of NHS Grampian Board. The non-voting membership comprises six professional members and five stakeholder members representing: staff, third sector bodies carrying out activities in relation to health and social care, service users and unpaid carers, and six additional non-voting members which include the Chief Executives of Moray Council and NHS Grampian in an Ex-officio capacity. The broad membership of the MIJB ensures valued input and engagement from a wide range of stakeholders. • The Community Empowerment (Scotland) Act 2015 places a statutory duty on MIJB and its Community Planning Partners to engage with communities on the planning and delivery of services and securing local outcomes. The MIJB has an approved Communications and Engagement Strategy which recognises and promotes the active and meaningful engagement with all stakeholders. Governance Principle 3 – Defining outcomes in terms of sustainable economic, social and environmental benefits Assessment of Effectiveness • The MIJB Strategic Plan 2022-2032 building on the foundations of the 2019 plan, sets out long-term strategic objectives that are flexible and responsive to emerging challenges and developments in health. To support the delivery of these objectives a 3 year delivery plan was approved by MIJB in May 2025, underpinned by a medium-term financial framework. • The strategic plan is supported by a comprehensive suite of documents, including a performance framework, workforce plan, and a communications, engagement and participation plan. These documents are currently under review, with a focus on enabling service transformation within existing financial constraints. • These documents collectively provide a structured approach to defining and achieving outcomes, with a clear focus on medium term priorities. The outcomes are directly aligned with the delivery of health and social care services and are aimed at driving measurable improvements for the population of Moray. Page 117
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 36 ANNUAL GOVERNANCE STATEMENT (continued) • In support of environmental sustainability, a climate change duties report is compiled and submitted annually on behalf of the MIJB, demonstrating the Board’s commitment to meeting its statutory environmental responsibilities Governance Principle 4 – Determining the interventions necessary to optimise the achievement of intended outcomes Assessment of Effectiveness • The MIJB’s decision making processes are designed to ensure that Board members receive clear, objective and comprehensive analysis of available options. Each proposal outlines how intended outcomes will be achieved, supported by detailed assessments of associated risks and opportunities. • Board papers reflect the broad range of strategic and operational matters under consideration. These include regular updates from the Chief Officer on current developments, as well as agenda items covering both opportunities and challenges, particularly those arising from reconfiguration and transformation of services. • The MIJB recognises the importance of sound financial governance and has adopted the Financial Management Code promoted by CIPFA as a guiding framework for effective financial administration. A Medium-Term Financial Strategy, approved in March 2025, supports this approach and will be reviewed regularly to ensure alignment with the Strategic Plan, Delivery Plan and the integration of delegated children’s services. Governance Principle 5 – Developing the entity’s capacity, including the capability of its leadership and the individuals within it Assessment of Effectiveness • The Senior Management Team (SMT) and Officers and have developed a programme of Development sessions with Board members with a focus on the challenging financial position and exploring opportunities for service transformation. Officers present a range of proposals aimed at delivering the MIJB’s strategic objectives whilst also contributing to the necessary financial savings for the upcoming year. • The MIJB continues to prioritise leadership development and collaborative working through the regular development sessions with Officers. These sessions provide valuable opportunities for shared learning, strategic dialogue, and constructive challenge, helping to strengthen leadership capabilities and organisational resilience. Page 118
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 37 ANNUAL GOVERNANCE STATEMENT (continued) Governance Principle 6 – Managing risk and performance through robust internal control and strong public financial management Assessment of Effectiveness • As part of a robust risk monitoring framework the Strategic Risk Register was co-developed with Board members during a dedicated development session in October 2024 and was formally approved by the Board in May 2025. This updated register will be reviewed monthly by the Senior Management Team and updated and presented biannually to Audit, Performance and Risk Committee, and annually to MIJB. A related action log was created for monitoring purposes and is owned and monitored by the Senior Management Team. The committee agreed in October that the register would be presented biannually with the caveat that any emerging or increasing risks would be presented as required. • The Performance Management Framework has currently under review. Performance reporting falls within the scope of the Audit, Performance and Risk Committee and reporting is quarterly. This now includes reporting by the delegated Children’s & Families Services. • The internal control system is closely aligned with those of MIJB’s Partner organisations, reflecting their operational responsibility for service delivery under direction of the MIJB. The Audit, Performance and Risk committee through its consideration of reports monitors the effectiveness of internal control procedures. The MIJB Chief Internal Auditor undertakes an annual review of the adequacy of internal controls and the opinion is included within this statement. • The MIJB benefits from the oversight of an independent S95 Officer, who is a member of the Board. This Officer provides expert advice on all financial matters and ensure timely preparation and reporting of budget estimates, monitoring reports and annual accounts. • Governance arrangements have been developed and maintained to comply with the core functions of various good framework guidelines including Code of Practice on Managing the Risk of Fraud and Corruption, Public Sector Internal Audit Standards (incorporating the principles of the Role of the Head of Internal Audit), Audit Committees: Practical Guidance for Local Authorities and Police. These frameworks support the MIJB’s commitment to strong financial stewardship and effective internal control. Page 119
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 38 ANNUAL GOVERNANCE STATEMENT (continued) Governance Principle 7 – Implementing good practices in transparency, reporting and audit to deliver effective accountability Assessment of Effectiveness • MIJB business is conducted through an approved cycle of Board meetings. To promote openness and accessibility, recordings of Board meetings are made available to the public. In addition, agendas, reports and minutes are published and accessible for the public to inspect. There is a standardised reporting format in place to ensure consistency, clarify and transparency in decision making processes. • The MIJB demonstrates its commitment to accountability through publication of both its Annual Accounts and Annual Performance Report. Following formal approval by the Board. • The Chief Internal Auditor reports independently to the Audit, Performance and Risk committee with direct access to the Chief Officer, Chief Financial Officer and Chair of the Audit, Performance and Risk committee on any matter of concern. Throughout 2024/25, the Chief Internal Auditor has continued to provide regular reports to the Committee, supporting effective oversight of internal accounts and assurance processes. Review of Adequacy and Effectiveness The MIJB has a responsibility for conducting, at least annually, a review of the effectiveness of the governance arrangements, including the system of internal control. The review is informed by the work of the Senior Management Team (which has responsibility for the development and maintenance of the internal control framework environment), the work of the Internal Auditors and the Chief Internal Auditor’s annual report and the reports from the External Auditor and other review agencies and inspectorates. Internal Audit Opinion Moray Council’s Internal Audit Section delivers the Internal Audit Service for the Moray Integration Joint Board (MIJB), and the Council’s Audit and Risk Manager holds the Chief Internal Auditor appointment to the MIJB until the 31st of March 2026. The Council’s Internal Audit Section has adopted the Public Sector Internal Audit Standards (PSIAS), which requires the Chief Internal Auditor to deliver an annual internal audit opinion and report, which has also been used to inform this governance statement. The Chief Internal Auditor’s evaluation of the adequacy and effectiveness of the MIJB framework of governance, risk management and internal control includes consideration of the findings from the audit work undertaken by the Chief Internal Auditor in his role as the Audit and Risk Manager for the Moray Council. Assurance is also sought from the Internal Audit Service Provider for NHS Grampian of the governance processes adopted by that organisation. This includes the Chief Internal Auditor now being provided with internal audit reports by the Internal Audit Service Provider for NHS Grampian of interest to the MIJB. In addition, reports issued by other Page 120
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 39 ANNUAL GOVERNANCE STATEMENT (continued) external review agencies are considered in the opinion provided by the Chief Internal Auditor. Internal Audit operates independently within the organisation, with no management- imposed limitations on the scope of audit work performed. In accordance with PSIAS, the Chief Internal Auditor prepares a risk-based Audit Plan for the MIJB, considering the internal audit arrangements of both Moray Council and NHS Grampian functions. The Annual Audit Plan for 2024/25 agreed to the following audits to be undertaken: • Out of Area Placements- A review of the systems and procedures of people receiving adult social care services who are out of the Moray area. • Residential Care- A review to assess the adequacy of procedures and administrative arrangements for third-party suppliers that provide care home services. The audit also included testing to verify the accuracy of financial assessments and the charging of residential care for both respite and permanent care residents. • Fostering and Kinship- An audit to review fostering and kinship payments of fees and allowances, ensuring they comply with agreed policies and procedures. The audit review of out of area placements identified significant concerns regarding the progress in determining the ordinary residence status of individuals receiving adult social care services, contractual arrangements with care providers, and budgetary control arrangements. A review of residential care highlighted the need for improved administrative processes and the potential for further digitalisation. The fostering and kinship payments audit was found to be well managed within the scope of the review, though some administrative control improvements were noted. In addition to the projects outlined in the Audit Plan, governance arrangements were reviewed to prevent fraud and corruption. The audit found that further improvements are needed to enhance the effectiveness of counter fraud measures. Internal Audit has also undertaken follow-up reviews to evidence the implementation of recommendations from previously issued audit reports. The follow-up audits undertaken of Self-Directed Support and the Moray Integrated Community Store found several recommendations where revised timescales for implementing recommendations were required. A previous review of social care information governance noted a need for a single case recording system. The Service is seeking a replacement for the current arrangements for recording social care information, but there is a need for this to be progressed in a timely manner. Implementation of recommendations is a key element in determining the adequacy and effectiveness of governance and internal control systems. If recommendations are not implemented in a timely manner, then weaknesses in control and governance frameworks will remain. Page 121
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 40 ANNUAL GOVERNANCE STATEMENT (continued) The Chief Internal Auditor, after considering the results of the work carried out by Internal Audit, together with other sources of assurance, has provided limited assurance that the Moray Integration Joint Board had adequate systems of governance and internal control for the year ended 31 March 2025. There is now a process in place within both the Senior Management Team (SMT) and Operational Management Teams (OMT) that tracks all audit actions. SMT has a regular discussion on these and a focus on those that are due completion or open and overdue. There is ongoing discussion with the Internal Audit Team in relation to the planned audits and in relation to agreeing audit actions to ensure improved accuracy of agreeing feasible closure dates. Supporting all of this is an action plan overseen by SMT. Prior Year Governance Issues The Annual Governance Statement for 2023/24 highlighted a number of areas for development in looking to secure continuous improvement. An assessment of progress is provided below: Area for Improvement Identified in 2023/24 Action Undertaken / Progress Made in 2024/25 GP visioning programme to deliver resilience and sustainability. Financial Sustainability with best value and outcomes. Progress within the agreed priority workstreams has been made across the year and there have been regular updates to the IJB on the programme. A Visioning refresh event was held in March 2025 and further work to strengthen the programme deliverables will be taken forward from that into the next financial year. The Chief Officer has put in place a Budget Savings Oversight Group (BSOG) which supports oversight of the delivery of the savings programme on a monthly basis. A Programme Management Office (PMO) has been established to support this work and our senior responsible officers for each savings programme. In addition, regular tri- partite meetings between the Chief Officer, Chief Finance Officer and the Director and Head of Finance in NHS Grampian and Moray Council take place to ensure shared visibility on financial matters for all partners. Page 122
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 41 Area for Improvement Identified in 2023/24 Action Undertaken / Progress Made in 2024/25 Assurance and reporting for Children’s Social Work and Justice Services. Improvement in compliance with audit recommendations. Assurance and reporting for CF&J continues to take place in both the IJB and its committees and within Moray Council Structures. Resource has now been secured to support a review of this across 2025/26 to ensure robust and proportionate reporting that is cognisant of the statutory roles of partner organisations. Improvements continue to be made in this area with a process now in place to review audit actions in both the Operational Management Team (OMT) and within the Chief Officer’s Senior Management Team (SMT). This provides visibility on the delivery of actions within agreed timescales and on those actions that remain open and overdue so that a focus can be put upon those and ensure their closure. Improvement on progress has been evidenced; however, this area of improvement requires further development and will be included for developments in 2025/26. Further Developments Following consideration of the review of adequacy and effectiveness, the following action plan has been established to ensure continual improvement of the MIJB’s governance arrangements and progress against the implementation of these issues will be assessed as part of the next annual review. Areas of focus for 2025/26 1. Developing further our approaches to frailty and Discharge without Delay. 2. Realigning our organisational structure to ensure effective delivery of strategy and transformation. 3. Integration of Children’s Social Work and Justice Services governance and oversight within the IJB. 4. Further strengthen performance oversight of the Board’s key strategies and priorities. 5 Continue to improve on the progress for compliance with audit recommendations. ANNUAL GOVERNANCE STATEMENT (continued) Page 123
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 42 ANNUAL GOVERNANCE STATEMENT (continued) Key Governance challenges going forward will involve: • Providing capacity to meet statutory obligations and ambitions to transform services, whilst managing expectations, increasing complexity and rising demand for services and the wider societal economic challenges now presented that also potentially drive demand. • As a Board, difficult decisions will be required in balancing how we meet the needs of our community whilst operating within the available resource envelope, this will be supported by our approach to risk as set out in our risk appetite statement. • Continuing to address our work force challenges in respect of recruitment and retention and where persistent vacancies will necessitate the need for redesign of roles and/or services. • Continuing to work closely with NHS Grampian, Moray Council and Moray Community Planning Partnership to build on existing relationships and establishing collaborative leadership, and to maximise the opportunities from an expanded health and social care remit within the revised Portfolio approach, including Dr Grays hospital, and how the IJB contributes to the wider community planning agenda in Moray and the North East. • Continuing to implement the recommendations of internal and external audit, including learning from national reviews. • Continuing work with teams to provide assurance to MIJB as we develop the governance structures for Children’s Social Work and Criminal Justice Services that support decision making on how best to tackle poverty and inequalities. • There have been no significant events up to the authorised for issue date. Page 124
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 43 ANNUAL GOVERNANCE STATEMENT (continued) Statement In our respective roles as Chair and Chief Officer of the MIJB, we are committed to ensuring good governance and recognise the contribution it makes to securing delivery of service outcomes in an effective and efficient manner. This annual governance statement summarises the MIJB’s current governance arrangements and affirms our commitment to ensuring they are regularly reviewed, developed and fit for purpose. Whilst recognising that improvements are required, as detailed earlier in the statement, it is our opinion that a reasonable level of assurance can be placed upon the adequacy and effectiveness of the MIJB’s governance arrangements. The ongoing challenge will be to meet all operational demands and pressures as we continue to operate within the legacy of the Covid 19 pandemic and global financial pressures, both of which have impacted at a socioeconomic level on our region and the community. Pressure on financial settlements is increasing for all partners, and we will continue to engage with them, the Scottish Government and the wider community to agree plans and outcomes that are both sustainable and achievable within this context. Taking that forward will be challenging as we aim to fulfil the nine Health and Wellbeing national health and well-being outcomes, and the strategic priorities identified and detailed in our Strategic Plan. Good governance remains an essential focus in delivering services in a way that both meets the needs of communities and discharges statutory best value responsibilities. These were arrangements in place for 2024/25 and up to the date of authorised for issue. ………………………… ……………………… Dennis Robertson Judith Proctor Chair of Moray IJB Chief Officer Page 125
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 44 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT This statement shows the cost of providing services for the year ended 31 March 2025 according to generally accepted accounting practices. 2023/24 2024/25 Net Expenditure Net Expenditure £ 000 £ 000 7,942 Community Hospitals 8,329 5,702 Community Nursing 6,166 18,366 Learning Disabilities 19,975 11,506 Mental Health 12,055 1,726 Addictions 1,763 213 Adult Protection & Health Improvement 273 23,044 Care Services Provided In-House 22,754 25,191 Older People & Physical & Sensory Disability Services 27,034 1,881 Intermediate Care and Occupational Therapy 1,972 1,808 Care Services Provided by External Providers 1,817 10,012 Other Community Services 10,280 2,828 Administration & Management 3,152 1,299 Other Operational services 1,535 21,339 Primary Care Prescribing 21,937 19,939 Primary Care Services 21,331 5,936 Hosted Services 5,665 1,777 Out of Area Placements 1,971 949 Improvement Grants 1,021 19,762 Children & Justice Services 19,626 6,898 Strategic Funds & Other Resources 6,020 14,665 Set Aside 15,639 202,783 Cost of Services 210,315 (200,086) Taxation and Non-Specific Grant Income (note 5) (209,779) 2,697 Deficit on provision of Services 536 2,697 Total Comprehensive Income and Expenditure 536 There are no statutory or presentational adjustments which reflect the MIJB’s application of the funding received from partners. The movement in the General Fund balance is therefore solely due to the transactions shown in the Comprehensive Income and Expenditure Statement. Consequently, an Expenditure and Funding Analysis is not provided in these annual accounts. Children & Justice Services were integrated into the MIJB from 2023/24, with the first year being the shadow year meaning all financial responsibilities remained with the Council but from 2024/25 the MIJB has full control over the finances. Page 126
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 45 MOVEMENT IN RESERVES STATEMENT This statement shows the movement in the year on the Moray Integration Joint Boards (MIJB) reserves. The movements which arise due to statutory adjustments which affect the General Fund balance are separately identified from the movements due to accounting practices. Additional detail included within note 7 on page 51. Movement of Reserves During 2024/25 General Fund Balance £000 Opening Balance at 1 April 2024 (1,986) Total Comprehensive Income and Expenditure 536 (Increase) in 2024/25 536 Closing Balance at 31 March 2025 (1,450) Movement of Reserves During 2023/24 General Fund Balance £000 Opening Balance at 1 April 2023 (4,683) Total Comprehensive Income and Expenditure 2,697 Decrease in 2023/24 2,697 Closing Balance at 31 March 2024 (1,986) Page 127
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 46 BALANCE SHEET The Balance Sheet shows the value of the Moray Integration Joint Board’s (MIJB) assets and liabilities as at the balance sheet date. The net assets of the MIJB (assets less liabilities) are matched by the reserves held by the MIJB. 31 March 2024 £000 Notes 31 March 2025 £000 1,986 Short Term Debtors 6 1,450 Current Assets - Short Term Creditors - Current Liabilities - Provisions - Long Term Liabilities 1,986 Net Assets 1,450 1,986 Usable Reserve General Fund 7 1,450 1,986 Total Reserves 1,450 The unaudited annual accounts were issued on 19 June 2025 and the audited annual accounts were authorised for issue on 30 October 2025. The Annual Accounts present a true and fair view of the financial position of the MIJB as at 31 March 2025 and its income and expenditure for the year then ended. Deborah O’Shea FCCA Chief Financial Officer Page 128
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 47 NOTES TO THE FINANCIAL STATEMENTS Note 1 Significant Accounting Policies General Principles The Financial Statements summarise the Moray Integration Joint Board’s (MIJB) transactions for the 2024/25 financial year and its position at the year-end of 31 March 2025. The MIJB was established under the requirements of the Public Bodies (Joint Working) (Integration Joint Boards) (Scotland) Act 2014 and is a Section 106 body as defined in the Local Government (Scotland) Act 1973. The Financial Statements are therefore prepared in compliance with the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25, supported by International Financial Reporting Standards (IFRS), unless legislation or statutory guidance requires different treatment. The accounts are prepared on a going concern basis, which assumes that the MIJB will continue in operational existence for the foreseeable future. The historical cost convention has been adopted. Accruals of Income and Expenditure Activity is accounted for in the year that it takes place, not simply when settlement in cash occurs. In particular: • Expenditure is recognised when goods or services are received, and their benefits are used by the MIJB. • Income is recognised when the MIJB has a right to the income, for instance by meeting any terms and conditions required to earn the income, and receipt of the income is probable. • Where income and expenditure have been recognised but settlement in cash has not taken place, a debtor or creditor is recorded in the Balance Sheet. • Where debts may not be received, the balance of debtors is written down. Funding The MIJB is primarily funded through funding contributions from the statutory funding partners, Moray Council and Grampian Health Board. Expenditure is incurred as the MIJB commissions’ specified health and social care services from the funding partners for the benefit of service recipients in Moray area. Cash and Cash Equivalents The MIJB does not operate a bank account or hold cash. Transactions are settled on behalf of the MIJB by the funding partners. Consequently, the MIJB does not present a ‘Cash and Cash Equivalent’ figure on the balance sheet. The funding balance due to or from each funding partner as at 31 March is represented as a debtor or creditor on the MIJB’s Balance Sheet. Page 129
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 48 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 1 Significant Accounting Policies (continued) Employee Benefits The MIJB does not directly employ staff. Staff are formally employed by the funding partners who retain the liability for pension benefits payable in the future. The MIJB therefore does not present a Pensions Liability on its Balance Sheet. The MIJB has a legal responsibility to appoint a Chief Officer. More details on the arrangements are provided in the Remuneration Report. The charges from the employing partner are treated as employee costs. Where material the Chief Officer’s absence entitlement as at 31 March is accrued, for example in relation to annual leave earned but not yet taken. Charges from funding partners for other staff are treated as administration costs. Reserves The MIJB’s reserves are classified as either Usable or Unusable Reserves. The MIJB’s only Usable Reserve is the General Fund. The balance of the General Fund as at 31 March shows the extent of resources which the MIJB can use in later years to support service provision. Indemnity Insurance The MIJB has indemnity insurance for costs relating primarily to potential claim liabilities regarding Board members. Grampian Health Board and Moray Council have responsibility for claims in respect of the services that they are statutorily responsible for and that they provide. Unlike NHS Boards, the MIJB does not have any ‘shared risk’ exposure from participation in the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS). The MIJB participation in the CNORIS scheme is therefore analogous to normal insurance arrangements. Note 2 Critical Judgements and Estimation Uncertainty In applying the accounting policies, the MIJB has had to make certain judgements about complex transactions or those involving uncertainty about future events. There are no material critical judgements or estimation uncertainty. Page 130
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 49 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 3 Events after the Reporting Period The unaudited accounts were issued by Deborah O’Shea, Chief Financial Officer on 19 June 2025 and the audited accounts were authorised for issue on 30 October 2025. Events taking place after this date are not reflected in the financial statements or notes. Note 4 Expenditure and Income Analysis by Nature 2023/24 2024/25 £000 £000 95,500 Services commissioned from Moray Council 98,217 107,247 Services commissioned from Grampian Health Board 112,061 36 Auditor Fee: External Audit Work 37 202,783 Total Expenditure 210,315 (200,086) Partners Funding Contributions and Non- Specific Grant Income (209,779) 2,697 Deficit on the Provision of Services 536 Page 131
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 50 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 5 Taxation and Non-Specific Grant Income 2023/24 2024/25 £000 £000 84,615 Funding Contribution from Moray Council 88,441 115,471 Funding Contribution from Grampian Health Board 121,338 200,086 Taxation and Non-specific Grant Income 209,779 The funding contribution from Grampian Health Board shown above includes £15.639m in respect of ‘set aside’ resources relating to acute hospital and other resources. These are provided by Grampian Health Board who retains responsibility for managing the costs of providing the services. The MIJB however has responsibility for the consumption of, and level of demand placed on, these resources. Note 6 Debtors 31 March 2024 31 March 2025 £000 £000 1,723 Grampian Health Board 1,187 263 Moray Council 263 1,986 Debtors 1,450 Amounts owed by the funding partners are stated on a net basis. Creditor balances relating to expenditure obligations incurred by the funding partners but not yet settled in cash terms are offset against the funds they are holding on behalf of the MIJB. Page 132
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 51 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 7 Usable Reserve: General Fund The MIJB holds a balance on the General Fund for two main purposes: • To earmark, or build up, funds which are to be used for specific purposes in the future, such as known or predicted future expenditure needs. This supports strategic financial management. • To provide a contingency fund to cushion the impact of unexpected events or emergencies. This is regarded as a key part of the MIJB’s risk management framework. The table below shows the movements on the General Fund balance: Earmarked Reserves General Reserves PCIP & Action 15 Other Earmarked Total £000 £000 £000 £000 Balance at 1 April 2023 - 937 3,746 4,683 Transfers (out) 2023/24 - (904) (1,793) (2,697) Balance at 31 March 2024 - 33 1,953 1,986 Transfer (out) 2024/25 - (33) (503) (536) Balance at 31 March 2025 - - 1,450 1,450 Primary Care Improvement Fund (PCIP) - The purpose of this fund is to ring fence funding received from the Scottish Government as part of its Primary Care Transformation Plan; this includes Action 15 funding as part of this plan. Other earmarked reserves are noted in detail on pages 18 to 20. Page 133
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 52 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 8 Agency Income and Expenditure On behalf of all IJB’s within Grampian Health Board, the MIJB acts as the lead manager for Grampian Medical Emergency Department (GMED) and Primary Care Contracts. It commissions services on behalf of the other IJBs and reclaims the costs involved. The payments that are made on behalf of the other IJBs, and the consequential reimbursement, are not included in the Comprehensive Income and Expenditure Statement (CIES) since the MIJB is not acting as principal in these transactions. The amount of expenditure and income relating to the agency arrangement is shown below: 2023/24 2024/25 £000 £000 10,615 Expenditure on Agency Services 10,680 (10,615) Reimbursement for Agency Services (10,680) - Net Agency Expenditure excluded from the CIES - Page 134
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 53 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 9 Related Party Transactions The MIJB has related party relationships with Grampian Health Board and Moray Council. In particular the nature of the partnership means that the MIJB may influence, and be influenced by, its partners. The following transactions and balances included in the MIJB’s accounts are presented to provide additional information on the relationships. Transactions with Grampian Health Board 2023/24 2024/25 £000 £000 (115,471) Funding Contributions received from the NHS Board (121,338) 107,064 Expenditure on Services Provided by the NHS Board 111,864 183 Key Management Personnel: Non-Voting Board Members 197 (8,224) Net Transactions with Grampian Health Board (9,227) Key Management Personnel: The Chief Officer and Chief Financial Officer are non- voting Board members and are both employed by Grampian Health Board and recharged to the MIJB. Details of the remuneration of both officers are provided in the Remuneration Report. The Chief Officer is a joint appointment made by Moray Council and Grampian Health Board and is jointly accountable to the Chief Executives of both organisations, as such this post is jointly funded. The Chief Financial Officer, whilst a Board appointment, does not share this arrangement of funding. Balances with Grampian Health Board 31 March 2024 31 March 2025 £000 £000 1,723 Debtor balances: Amounts due from Grampian Health Board 1,187 1,723 Net Balance due from Grampian Health Board 1,187 Page 135
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 54 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 9 Related Party Transactions (continued) Transactions with Moray Council 2023/24 2024/25 £000 £000 (84,615) Funding Contributions received from the Council (88,441) 95,455 Expenditure on Services Provided by the Council 98,179 81 Key Management Personnel: Non-Voting Board Members 75 10,921 Net Transactions with Moray Council 9,813 Balances with Moray Council 31 March 2024 31 March 2025 £000 £000 263 Debtor balances: Amounts due from Moray Council 263 263 Net Balance due from Moray Council 263 Page 136
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 55 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 10 VAT The MIJB is not registered for VAT and as such VAT is settled or recovered by the partners. The VAT treatment of expenditure in the MIJB accounts depends on which of the partners is providing the services as each of these partners are treated differently for VAT purposes. VAT payable is included as an expense only to the extent that it is not recoverable from His Majesty’s Revenue and Customs. VAT receivable is excluded from income. Note 11 Accounting Standards That Have Been Issued but Have Yet To Be Adopted The Code requires the MIJB to identify any accounting standards that have been issued but have yet to be adopted and could have material impact on the accounts. This applies to the adoption of the following new or amended standards within the 2024/25 Code: • IAS 21 The Effects of Changes in Foreign Exchange Rate (Lack of Exchangeability) issued in August 2023; • IFRS 17 Insurance Contracts issued in May 2017; and • Changes to the measurement of non-investment assets within the 2025 to 2026 Code include adaptations and interpretations of IAS16 Property, Plant and Equipment, and IAS 38 Intangible Assets. The Code requires implementation from 1 April 2025 and there is, therefore, no impact on the 2024/25 financial statements. The above amendments are not anticipated to have a material impact on the information provided in the financial statements. Page 137
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 56 INDEPENDENT AUDITOR’S REPORT Independent auditor’s report to the members of Moray Integration Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements We certify that we have audited the financial statements in the annual accounts of Moray Integration Joint Board for the year ended 31 March 2025 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet and notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 (the 2024/25 Code). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Board as at 31 March 2025 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2024/25 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Accounts Commission on 18 May 2022. Our period of appointment is five years, covering 2022/23 to 2026/27. We are independent of the Board in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the Board. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Page 138
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 57 INDEPENDENT AUDITOR’S REPORT (Continued) Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Board’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the Board’s current or future financial sustainability. However, we report on the Board’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement We report in our Annual Audit Report the most significant assessed risks of material misstatement that we identified and our judgements thereon. Responsibilities of the Chief Financial Officer and Moray Integration Joint Board for the financial statements As explained more fully in the Statement of Responsibilities, the Chief Financial Officer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Chief Financial Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Chief Financial Officer is responsible for assessing the Board’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the Board’s operations. The Moray Integration Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement Page 139
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 58 INDEPENDENT AUDITOR’S REPORT (Continued) when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Board; • inquiring of the Chief Financial Officer as to other laws or regulations that may be expected to have a fundamental effect on the operations of the Board; • inquiring of the Chief Financial Officer concerning the Board’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Board’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Page 140
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 59 INDEPENDENT AUDITOR’S REPORT (Continued) Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report We have audited the parts of the Remuneration Report described as audited. In our opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Chief Financial Officer is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In our opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Page 141
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APPENDIX 1 Moray Integration Joint Board Annual Accounts 2024/25 60 INDEPENDENT AUDITOR’S REPORT (Continued) Matters on which we are required to report by exception We are required by the Accounts Commission to report to you if, in our opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to our responsibilities for the annual accounts, our conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in our Annual Audit Report. Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Angela Pieri, (for and on behalf of Grant Thornton UK LLP), 120 Bothwell Street, Glasgow, G2 7JS Date: Page 142
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APPENDIX 2
Health & Social Care Moray
Judith Proctor
Chief Officer
Health & Social Care Moray
Moray Council HQ
High Street
ELGIN IV30 1BX
01343 563552
hscmchiefofficer@moray.gov.uk
www.hscmoray.co.uk
Grant Thornton UK LLP
120 Bothwell Street
Glasgow
G2 7JS
Moray Integration Joint Board
Financial Statements for the year ended 31 March 2025
This representation letter is provided in connection with the audit of the financial statements of Moray
Integration Joint Board (the “IJB”) for the year ended 31 March 2025 for the purpose of expressing an
opinion as to whether the IJB’s financial statements are presented fairly, in all material respects in
accordance with International Financial Reporting Standards, and the CIPFA/LASAAC Code of Practice
on Local Authority Accounting in the United Kingdom 2024/25 and applicable law.
We confirm that to the best of our knowledge and belief having made such inquiries as we considered
necessary for the purpose of appropriately informing ourselves:
Financial Statements
i. We have fulfilled our responsibilities for the preparation of the IJB’s financial statements in
accordance with International Financial Reporting Standards and the CIPFA/LASAAC Code of
Practice on Local Authority Accounting in the United Kingdom 2024/25 ("the Code"); in particular
the financial statements are fairly presented in accordance therewith.
ii. We have complied with the requirements of all statutory directions affecting the IJB and these
matters have been appropriately reflected and disclosed in the financial statements.
iii. The IJB has complied with all aspects of contractual agreements that could have a material effect
on the financial statements in the event of non-compliance. There has been no non-compliance
with requirements of any regulatory authorities that could have a material effect on the financial
statements in the event of non-compliance.
iv. We acknowledge our responsibility for the design, implementation and maintenance of internal
control to prevent and detect fraud.
v. We are satisfied that the methods, the data and the significant assumptions used by us in making
accounting estimates and their related disclosures are appropriate to achieve recognition,
measurement or disclosure that is reasonable in accordance with the Code and adequately
disclosed in the financial statements. In this context we confirm there are no significant
assumptions and accounting estimates.
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vi. Except as disclosed in the financial statements: a. there are no unrecorded liabilities, actual or contingent b. none of the assets of the IJB has been assigned, pledged or mortgaged c. there are no material prior year charges or credits, nor exceptional or non-recurring items requiring separate disclosure. vii. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of International Financial Reporting Standards and the Code. viii. We have considered the disclosures changes schedules included in your Auditor’s Annual Report. The financial statements have been amended for these disclosure changes and they financial statements are free of material misstatements, including omissions. ix. All events subsequent to the date of the financial statements and for which International Financial Reporting Standards and the Code require adjustment or disclosure have been adjusted or disclosed. x. Actual or possible litigation and claims have been accounted for and disclosed in accordance with the requirements of International Financial Reporting Standards. xi. We have no plans or intentions that may materially alter the carrying value or classification of assets and liabilities reflected in the financial statements. xii. We have updated our going concern assessment. We continue to believe that the IJB financial statements should be prepared on a going concern basis and have not identified any material uncertainties related to going concern on the grounds that : a. the nature of the IJB means that, notwithstanding any intention to cease its operations in their current form, it will continue to be appropriate to adopt the going concern basis of accounting because, in such an event, services it performs can be expected to continue to be delivered by related public authorities and preparing the financial statements on a going concern basis will still provide a faithful representation of the items in the financial statements b. the financial reporting framework permits the entry to prepare its financial statements on the basis of the presumption set out under a) above; and c. the IJB system of internal control has not identified any events or conditions relevant to going concern. We believe that no further disclosures relating to the IJB’s ability to continue as a going concern need to be made in the financial statements. xiii. The IJB has complied with all aspects of ring-fenced grants that could have a material effect on the IJB’s financial statements in the event of non-compliance. Information Provided xiv. We have provided you with: a. access to all information of which we are aware that is relevant to the preparation of the IJB’s financial statements such as records, documentation and other matters; b. additional information that you have requested from us for the purpose of your audit; and c. access to persons within the Council and NHS via remote and in person arrangements from whom you determined it necessary to obtain audit evidence. Page 145
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xv. We have communicated to you all deficiencies in internal control of which management is aware. xvi. All transactions have been recorded in the accounting records and are reflected in the financial statements. xvii. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. xviii. We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of and that affects the IJB and involves: a. management; b. employees who have significant roles in internal control; or c. others where the fraud could have a material effect on the financial statements. xix. We have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the financial statements communicated by employees, former employees, analysts, regulators or others. xx. We have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements. xxi. We have disclosed to you the identity of the IJB’s related parties and all the related party relationships and transactions of which we are aware. xxii. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements. Annual Governance Statement xxiii. We are satisfied that the Annual Governance Statement (AGS) fairly reflects the IJB’s risk assurance and governance framework and we confirm that we are not aware of any significant risks that are not disclosed within the AGS. Management Summary xxiv. The disclosures within the Management Summary fairly reflect our understanding of the IJB’s financial and operating performance over the period covered by the IJB’s financial statements. Approval The approval of this letter of representation was minuted by the IJB Board at its meeting on 30 October 2025. Yours faithfully Name: Judith Proctor Position: Chief Officer Date: Signed on behalf of the Moray Integration Joint Board Page 146