Minutes:
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The External Auditor from Ernst and Young gave a verbal update to the Committee.
The Chair invited question and comments from the Committee.
In response to a question from Councillor Long, the External Auditor from Ernst and Young explained due to a gap in completed audits since 2019/20, the current audit focuses on rebuilding assurance for significant account balances as of March 2025. Some balances, such as cash and investments, can be audited at year-end, while others, like reserves and asset valuations, require historical reconstruction.
Councillor Long questioned if the external audit would be presented with an explanation outlining the resume which needed to be completed for the external audit.
The External Auditor from Ernst and Young confirmed the audit results would identify each area such as cash flow, accounts etc and the RAG rating, e.g green for substantive assurance and rebuilt assurance. He added the results would show the narrative.
The Chair, Councillor Ryves sought clarification of the timetable of the external audit.
The External Auditor from Ernst and Young explained the backstop date was at the end of February 2026. He commented the delay in bringing the report to the Committee was to ensure further detail was included in the report. He explained the request to delay the external audit being presented to the Committee in mid-February 2026.
The Deputy Chief Executive and Section 151 Officer explained that resource limitations may prevent full assurance on all areas by the statutory deadline. Prioritisation would be agreed with the auditors, and some work may be deferred to subsequent years. The committee acknowledged that a disclaimer of opinion was expected due to opening balance uncertainties
In response to the Chair, Councillor Ryves the External Auditor from Ernst and Young confirmed there would be disclaimed opinion due to the lack of assurance and the audit results would be valuable to members.
He explained the impact of Local Government Reorganisation (LGR) would be the audit would not reach a clean opinion for 3 - 4 years and they were hoping for sector wide guidance on how assurance would be built on larger elements first. He commented LGR complicated the process in terms of audits.
Councillor Long commented further the importance of the narrative being explained in the report due to membership of the Committee changing.
Councillor Bearshaw questioned if a different colour was needed for the RAG rating for areas which were not in scope.
The Vice – Chair, Councillor de Winton commented on the importance of consistent membership of the Audit Committee as this provided consistent knowledge and understanding.
The Portfolio Holder, Councillor Morley commented on making audits simpler as there were less skilled auditors for Local Government.
The External Auditor from Ernst and Young explained there had been independent reviews that identified a key area was financial reporting framework and explained CIPFA had recently completed consultation on the code of practice resulting in a few changes being implemented.
RESOLVED: The Committee noted the verbal update.