Agenda item

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Vicky Chong, Audit Manager, Ernst and Young presented the report and drew attention to the key findings and outlined the reasons for the delay in the 2019/2020 audit, the number of hours required to undertake the audit and fee implications.

A summary of the key findings are set out below:

•          Page 5:  Materiality – Council as a single entity £1.845m final and Council Group £1.923 m final.

•          Page 6:  Closing procedures and signing off of 2019/2020 Statement of Accounts scheduled for 22 January 2024 and issue a certificate.

•           Pages 7 to 9:  Unadjusted differences, Adjusted differences, Disclosure    differences.

•          Page 12:  Control observations, recommendations set out on pages 44 and 45.

The Committee was advised of the proposal from the Department for Levelling Up, Housing and Communications to resolve the backlog of previous years Statement of Accounts.  Vicky Chong explained that this would potentially lead to a technical disclaimer opinion on the intervening years audit between 2019/2020 accounts and 2023/2024 accounts to move the whole system forward.  The Committee was informed that did not apply to the VFM (value for money) arrangement and would still need to be completed across all the financial years and which Ernst Young were in the process of undertaking with a view to reporting around Easter 2024.  It was noted that subject to legislation, it was anticipated that the disclaimer form of audit opinion would include the three year period – i.e. 2020/2021, 2021/2022, 2022/2023.  It was explained that the Council was not the only authority in this category.  However, having three years disclaimer was quite significant and therefore for the 2023/2024 accounts it was important to produce a good quality set of accounts and supporting documents.

The Committee was informed that David Ridler who would be taking over as a partner from Mark Hodgson,  would be attending the next Audit Committee meeting regarding the 2023/2024 accounts.

The Chair thanked Vicky Chong for the report and invited questions and comments from the Panel.

The Assistant Director, Resources explained that an announcement was expected from the Government regarding the backlog of accounts.  The Assistant Director added that she had attended a recent LGA Conference  where Simon Ball, MP had attended in person and it was hoped that an announcement would be made end January/beginning February 2024.

The Chair commented that it was his understanding that it was acceptable for the next three audits to be presented as unqualified.  In response, the Assistant Director, Resources explained that there was a proposal out for consultation but that the outcome had not yet been confirmed and an announcement was imminent.

The Chair invited the Portfolio Holder for Finance to address the Committee.

The Portfolio for Finance confirmed he had nothing further to add.

The Chair commented that in his view there was an issue with delays and after reading the report objectively got the impression that those delays were caused by the Borough Council and added that officers had worked extremely hard during a difficult time.  The Chair asked if the report might show a flexibility regarding this.

In response to questions from the Chair on the problems with the fixed assets, the Assistant Director, Resources explained that there was catching up to undertake but the result of this audit meant that the Council would need to go back and retrospectively review the subsequent years following that to ensure the appropriate balances were being carried forward into 2023/2024.  The Assistant Director added that the lessons learned had been recognised and officers had been working to get the council to this position had been competent in taking that work forward.

In response to questions from Councillor Bearshaw on subjective market value and being comfortable about the amount outstanding, the Chair explained that there was a timing difference and controls had been identified to correct the errors.

RESOLVED:  The Committee noted the 2019/3030 Audit Results Report – ISA 260.