Meeting documents

To consider a report by the Treasurer for the OPCC.

The Panel considered a report by the Chief Finance Officer, OPCC which provided an update on the financial position at the end of September 2017 and the full year forecast compared with the revised budget.

The Chief Finance Officer advised that following the last meeting, income was now being shown separately in the report and as the report was developed, relevant benchmarking would be included in future reports.

Members asked the following questions, which the Chief Finance Officer responded to:-

1.     The Quarter 2 finance report highlights that the forecast overspend, after the application of reserves, is now predicted to be £1m from the £885,000 reported at the end of the first quarter. Can the Commissioner provide the panel with reassurance around the mitigation strategy outlined to the panel at its September meeting?

The Force mitigation measures as previously described are continuing and consideration will be given in the review of the medium term financial strategy as to the ongoing measures that will be required.

2.     Can the Commissioner verbally explain a little bit more about the role of the Independent Audit Committee and its work in delivering greater Economy, Efficiency and Effectiveness?

The single audit committee (6 people) provides independent assurance to all 4 corporations sole (Dorset OPCC, Dorset Force, Devon and Cornwall OPCC and Devon and Cornwall Force).  This is more economic that supporting three separate committees that were previously in place (one in each Force and one specifically for the Alliance.

Being independent of all the entities they can provide advice to each Force either jointly or independently.  This model has worked effectively for some time in Warwick and West Mercia Police Forces who are also in an Alliance.  The terms of reference of the Audit Committee are drawn from CIPFA, and HM Treasury guidance.  In fulfilling their function they support the work of the corporations sole in delivering economy, efficiency and effectiveness.

These committee positions were advertised and 18 applications were received, there was a shortlisting process and interview were held over 2 days.  On completion of this process 6 positions were offered which had resulted in a balanced new committee.  The funding for this was being shared between the 4 corporations.

Following a subsequent question about how the Independent Audit Committee would drive effective efficiency and economy, the Chief Finance Officer advised this Panel would provide a wide focus and there was a clear role within its terms of reference regarding value for money. The Director of Operations, OPCC undertook to circulate the terms of reference to members.

Members asked for an update from the Chief Finance Officer on the re-introduction of the Major Operations Reserve of £1.2m and the additional £1.8m in the Capital Cash Flow/Capital Reserves funding line.  The Assistant Chief Officer advised that there had been an error in the precept report in respect of the Major Operations Reserve, which had been a genuine mistake between the Force and the then Treasurer.  The general balances figures had now been changed and the money that was held there had not been included on a line in that particular report.  Figures showed that the general balances were £3.6m in February 2016 and £7.5m in February 2017.  The Assistant Chief Officer accepted that the reporting of reserves and balances could be improved upon to provide the required levels of confidence and assurance for the Panel and accepted that there had been inconsistencies in the past.

The Chairman highlighted the importance that members of the Panel had confidence and assurance that the figures were consistent and that an omission of £1.2m was of concern.

Following a detailed discussion the PCC undertook to convene an urgent meeting between himself, his Chief Finance Officer, the Chief Constable and the Assistant Chief Officer (ACO) to identify opportunities to improve financial reporting to the Panel and to then reconvene with members of the Panel to address these important issues.

One member from Bournemouth Borough Council made reference to the budget now showing a £2m overspend with reserves to be applied to it and that it appeared that the only mitigation action that had been identified was the use of reserves.  The PCC highlighted that workforce management plans were based on assumptions about officer turnover rates but that officers had not been leaving with quite the same regularity as previously, a change in recruitment therefore was a specific mitigation to address the overspend.  The forecast overspend was set out in the report along with detailed forecasts, although the pay award was double the amount anticipated when the budget was set.

Following a comment regarding the Net Revenue Expenditure chart in the report and the balance between maintaining the service and maintaining financial control objectives, the PCC noted that Dorset had always traditionally spent a small amount on agency staff.  One member felt there was not as much control as there should be in this regard.

In response to a question regarding the minimum revenue provision and whether this would make the position worse in the next financial quarter’s report, the ACO confirmed that during the last financial year it was intended to fully finance the capital requirement but, at the end of the year, they had looked to see what alternatives were available. They were currently working with their strategic alliance partners and an external firm experienced in this area. The PCC added that the current financial projections clearly demonstrated that if the proposed merger with Devon and Cornwall did not progress Dorset would have to cut police officers and PCSO numbers.

Resolved

That the PCC would meet with members of the Police and Crime Panel on Friday 8 December 2017, to report back to address members’ concerns relating to finance.