Ms Josephs has been on paid leave since January from the £190,000-a-year job, when it emerged she had held a leaving party during lockdown as she left her post as head of the Government's Covid taskforce.
A cross-party committee was appointed by the council to assess its response to the issue, with the group meeting on several occasions behind closed doors and also receiving a report from an independent investigator, whose identity was not revealed. The findings of the investigator have not been made public.
But Sheffield Council this afternoon announced that Ms Josephs would be staying in the role.
In a statement posted on Twitter, Ms Josephs said confirmed she had received a fixed penalty notice but would be continuing in her post.
"I want to thank the SCC Committee for the rigour and thoughtfulness they have shown. I am grateful that the committee's investigation has concluded I should return to work," she said.
She added: "I have made mistakes for which I am deeply sorry. I intend to learn from these mistakes and continue to work hard to be the very best chief executive I can be for our city."
A statement from the committee said: "Firstly we would like to thank the people of Sheffield for their patience while the independent investigation has been carried out, and the cross-party committee has conducted its work. We understand this has been a difficult time and people have, quite rightly, been eager to see this situation conclude.
“There has been a prescribed process that forms part of the contract for any statutory officer, and we have strictly adhered to it. This has meant there has been little information that we have been able to share.
“As a result of the findings of the independent investigation, the committee were able to conclude their work. Kate Josephs has decided to publicly share that she received a written warning from the committee. Kate will now be resuming her full duties as Chief Executive.
“The decision was made based on the facts at hand and with very careful consideration. The committee acknowledges that Kate has apologised and believes that she feels genuine remorse."
Leader of Sheffield City Council, Cllr Terry Fox said: “It’s no secret that I’ve been deeply disappointed by Kate Josephs’ actions. Over the last few months I’ve repeatedly said that I share the anger and upset felt by some Sheffielders about the choices Kate has made. Those feelings don’t just go away overnight.
"But I am here to deliver for Sheffield, and that is what matters the most to me now. The Chief Executive’s work to rebuild trust across the city and organisation begins now. Kate and I will also need to rebuild our relationship, and I do believe we are both committed to doing that. We must, and we will, keep driving our amazing city forward. The people of Sheffield deserve that – they are my priority today and always.
"The cross-party committee, which followed national guidelines was put in place for a reason – to ensure a fair process - and I respect their decision. I would like to thank the committee for their work on this and thank the people of Sheffield for their patience while the process was carried out.
"Finally, I want to give my sincere thanks to Eugene Walker for his leadership and support over the last few months in his role as Acting Chief Executive, and our outstanding employees here at the council who have continued their fantastic work during what has been a challenging time.”
In May, Ms Josephs reiterated her “sincere and unequivocal apology” after details of her leaving drinks during lockdown were outlined in the Sue Gray report.
Ms Josephs first apologised in January this year after it emerged a gathering was held to mark her leaving the Civil Service on December 17 2020.
Ms Gray’s report outlined how the event was attended by 20 to 30 people, with six pizzas ordered for those still in the room more than two hours later.
After the Gray report was published, Ms Josephs said: “I want to reiterate my sincere and unequivocal apology for, on 17 December 2020, gathering with colleagues in the Cabinet Office as I left my previous job.
“I am truly sorry I did this and for the anger that people feel as a result. The specific facts of the event are set out in the Cabinet Office investigation report published today. I did not attend any events in 10 Downing Street.
“I am continuing to do everything asked of me by the committee that Sheffield City Council have put in place to make decisions on my future as chief executive and do not want to prejudice or pre-empt that process, as such I will make no further statement until that process is complete. I remain totally committed to our city and the Council.”
Ms Gray’s report said the December 17 event to mark Ms Josephs and an unnamed official leaving took place in the Cabinet Office in Whitehall and was attended by 20 to 30 people, including senior officials.
In the week before the event, Second Permanent Secretary James Bowler said the event could take place if it was time-limited, that no-one was to travel into the office specially and that it should be socially distanced.
The report said that an official sent a email on behalf of Ms Josephs to 40 members of staff the day before the event which said: “Kate J and (unnamed No 10 official) farewell drinks @ Thu 17 Dec 2020 6:30pm – 8:30pm.
“Where: 70 Whitehall Conference Room C.
“Given higher COVID restrictions please do not travel into London for this if you wouldn’t otherwise have been in the office
“We are leaving the COVID Taskforce :(”
The message also said: “We’d love it if you could join us for a farewell, COVID secure, drink.”
Ms Gray found that Mr Bowler gave a speech to thank both Ms Josephs and the No 10 official, leaving shortly afterwards.
Her report said that plans to observe social distancing guidance during the event did not happen “as those in the room gathered in small groups, and there was also mingling between groups”.
The report said “There was food and drink available, including crisps, beer and prosecco that had been purchased by individuals attending.
“Background music was played through a smartphone.”
The report found that the event began between 7pm and 8pm and, although some people left after the speeches, somebody ordered six pizzas for those left at 10.44pm.
It said the event ended between 11pm and 11.30pm but some people, including Ms Josephs, left at around 12.23am after tidying up.
And a small number of other people then headed to No 10 Downing Street, “apparently with the intention of joining the separate leaving event taking place”.
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