A report on the draft annual governance statement (AGS) to the Wednesday, July 29, meeting of the authority’s audit committee noted that the document relates to 2019-20 and ‘consequently, much of the financial year was unaffected by coronavirus’.
It adds: ‘However, coronavirus did impact upon the governance of the council during March 2020 and at the time of the publication of the draft AGS, the pandemic undoubtedly has had a greater impact.
‘The council’s governance improvement plan includes an action to conduct a review of its response to the Covid-19 crisis, to identify any lessons learned and any areas of improvement required in its contingency planning and governance arrangements.
‘While there is a possibility that there may be secondary outbreaks and pandemic peaks, recovering from Covid-19 will set the context for future community and council planning and decision-making in the county.’
However, the main topic of discussion at the meeting was whether the committee should approve the AGS or not.
Under regulations from 2015, local authorities must review the effectiveness of their systems of internal control at least annually to ensure that governance arrangements are up to date and relevant.
The outcome of that review must be considered by a committee of the council and published in the AGS alongside the statement of accounts, in Northumberland’s case the responsibility falls to the audit committee.
With this in mind, the committee was recommended to approve the draft AGS so it can be published with the draft accounts for a period of public inspection, ahead of both being finally signed off later in the year.
However, while members accepted that the AGS was supported by a comprehensive raft of documents and evidence, many had reservations about approving it, in the sense that they would then be seen to be endorsing all of the conclusions within the paperwork.
In the end, they agreed to note the AGS for now, subject to the internal audit team carrying out a ‘health check’ on the documents and reporting back to the next meeting.
The minutes from the equivalent meeting last year, in March, show that the committee also noted the draft version rather than approved it.
The councillors then later approved the AGS as part of the statement of accounts for 2018-19 in November, at the meeting where the authority’s previous external auditors, Ernst and Young (EY), resigned amid a breakdown in the relationship between the two.
The company’s partner Stephen Reid did not support the approval of that AGS as he felt it had not adequately addressed the concerns he raised in his audit results report, which had been delayed while ‘whistle-blowing’ allegations were investigated.
In the end, EY ‘did not find evidence to support the allegations regarding a lack of independence and integrity of senior management, bullying or the inappropriate use of funds for political purposes’.
However, the report still recorded an adverse value for money conclusion, as ‘in our view, there are management and cultural challenges facing the council that need to be urgently addressed’. These issues were disputed by the authority’s chief executive Daljit Lally in a four-page rebuttal.