Agenda and draft minutes

An apology for absence was received from Independent Member Anumesh Chandra.

To approve the record of the meeting held on 27 January 2026.

The record of the meeting held on 27 January 2026 was agreed and signed by the Chairperson as correct.

The Chairperson will announce any late items which do not appear on the main agenda but which she has agreed should be considered by reason of special circumstances to be specified in the report.

There were none. 

Members are invited to disclose any Disclosable Pecuniary Interests or Other Significant Interests in accordance with the Member Code of Conduct. Guidance on this is set out in agenda item 4.

Disclosable pecuniary interests

There were none.

Other significant interests (OSIs)

There were none.

Other interests

There were none.

This report presents the opinion for the financial statements for 2024-25 and the findings of the Council’s External Auditors, Grant Thornton LLP, in their audit of the Council’s arrangements to secure economy, efficiency and effectiveness in the use of resources during 2024-25.

 Discussion:

The Public Sector Audit Senior Manager, Grant Thornton, introduced the report which presented the Auditors Annual Report, the Audit Findings Report and the 2024/25 Statement of Accounts. She stated that the focus of the review had been on income and expenditure testing and closing balances. A significant amount of testing had taken place during the audit period, however, the auditors had been unable to obtain the necessary assurance on the statement of accounts and the final audit opinion for 2024/25 would be a disclaimer opinion. She added that the auditors had been unable to carry out detailed work in relation to the new audit standard IFRS16.

The following issues were discussed:

Finance Capacity – in response to a question whether the finance department had resources to implement the required changes in process in time to complete the 2025/26 audit within the required timescale, the Chief Operating Officer outlined there were two key recommendations in the Auditors Annual Report related to financial sustainability and financial capacity. He acknowledged there was a capacity issue in the department to meet the challenges of those recommendations. A previous rightsizing exercise had provided additional capacity in relation to budget management following a recommendation by CIPFA. It was proposed to strengthen the corporate finance functions, and in addition the Council had to recruit to two senior management vacancies.

He outlined the proposed way forward. In relation to the role of Chief Finance Officer, the Council would explore the potential for a fixed term appointment through to Local Government Reform. In relation to the Head of Revenue Accounts a recruitment campaign would begin shortly, however, the finance department required additional capacity. To develop this capacity, a review of the finance functions would be undertaken to create efficiencies. This would enable the department to reprioritise and strengthen areas of need such as the Statement of Accounts and recovering debt.

Medway Development Company (MDC) – it was asked whether the MDC’s £10m deficit had affected discussion with the auditor regarding the Council’s stance in relation to the Minimum Revenue Provision. The Chief Operating Officer stated that the auditors were aware of the deficit which contributed to the Council’s financial position. The way accounts had to be presented meant that it was inevitable that MDC would report losses at this stage of its development with long term loans to build housing for the private rental sector. As rents increase he was confident the company would become profitable. The Chief Operating Officer had requested a future cash flow forecast from MDC in the next six weeks to provide the auditors with additional assurance as to the position of the company. He remained confident that the cashflow forecast would demonstrate that loans to the company would be serviced through the sale or rental of the assets over the long term.

The Chief Operating Officer added that the Council’s position regarding the status of Loans to MDC and minimum revenue provision remained unchanged.

Valuation of Council Dwellings - a Member requested additional  ...  view the full minutes text for item 746.