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.

The Committee considered 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 2023/24 self-assessment had identified significant progress against four key areas:

i)      The external audit of the 2019/20 Statement of Accounts gave an unqualified opinion for the first time since 2015/16. The 2020/21 Statement of Accounts had also received an unqualified audit opinion;

ii)     The 2021/22 and 2022/23 Draft Statements of Accounts had now been published;

iii)    The Capital Strategy had been extended from 3 years to 5 years; and

iv)     A 75% increase in the number of responses to the Council’s budget engagement had been received.

As a result of these improvements, this self-assessment had identified that four standards (standards A, D, L and P) had improved from a previous rating of ‘Amber’ to ‘Green’. All other standards remained as per the 2022/23 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.