A report on the Chartered Institute of Public Finance & Accountancy Financial Management Code, which sets out the standards of financial management for local authorities to assess themselves against.

Stuart Donnelly, Financial Planning & Strategy Manager, submitted a report on the Financial Management Code 2019 (FM Code) (Appendix 1), which had been introduced by the Chartered Institute of Public Finance & Accountancy (CIPFA).  The Code set out the standards of financial management for local authorities.  Local authorities had been expected to comply fully with the FM Code from 1 April 2021, with 2020/21 effectively being a shadow year.  The Guidance to the Code (Appendix 2) expected Authorities to be able to provide evidence that they had reviewed their financial management arrangements against the standards and that they had taken such action as may be necessary to comply with them.  Effectively, an annual self-assessment exercise had been required to assess compliance with the FM Code from 1 April 2021

The 2022/23 self-assessment had identified significant progress against three key areas:

i)     The Chief Auditor’s annual assurance report had improved from Limited Assurance to Reasonable Assurance;

ii)    The positive findings of the Corporate Peer Challenge (as set out in paragraph 8.18), organised by the Local Government Association (LGA), that had taken place in June 2022; and

iii)  The Medium-Term Financial Strategy (MTFS), which had been approved by Council in February 2023, delivered a balanced budget in 2023/24 without the need to draw on reserves and set out a provisionally balanced budget for 2024/25.

As a result of these improvements, this self-assessment had identified that two standards (standards C and E) had improved from a previous rating of ‘Amber’ to ‘Green’. All other standards remained as per the 2021/22 assessment.  A proposed action plan, setting out the required actions to improve those standards rated ‘Amber’ to ‘Green’ was set out in Appendix 3.

Resolved:     That the findings of the 2023/24 Financial Management Code Self-Assessment be noted.