Agenda item

To receive the External Audit Progress Report.

Helen Lillington, External Auditor, introduced the report, the purpose of which was to provide the Committee with an update on the progress of delivery of External Audit responsibilities and a general sector update.  In doing so, she highlighted following publication of the Council’s 2023/24 accounts, External Audit would begin fieldwork in October 2024.  The preceding years’ audits were yet to be ‘closed’ and these remained the responsibility of the predecessor auditor.  Audit opinions for 2023/24 could not be signed without opinions being signed for prior years.  To date no ‘significant weaknesses’ had been identified in relation to Value for Money.  Further work would be undertaken and a detailed report would be submitted to a future meeting of the Committee.

The Chair thanked Ms. Lillington for her report, commenting that there could have been a better transition when changing the Council’s external audit provision.  He drew Members attention to the State of the Locals Extract: Who Do the Public Think Are Responsible graph (at page 18 of the report), highlighting the importance of localism, community groups, the Police, NHS etc. working to tackle issues, rather than reliance on central and local government.

During discussion the following points were noted:

·       The legend was missing from the graph, asking that it be included in future reports to provide the context needed to fully understand the information.  He clarified that the darker area represented a ‘great deal of responsibility’ and the lighter area represented a ‘fair amount of responsibility’.

·       The Chair highlighted Housing and Homelessness – Continuing Crisis and a New Reform (at page 20 of the report), stating that the Council were acting to ensure that people were protected from homelessness but more could be done i.e. more affordable housing, avoiding pressure on the General Fund/burden on general taxation.  Homelessness was one of the biggest pressures for councils, particularly in view of funding uncertainty.

·       Devolution to local councils was good but to successfully address and solve problems, appropriate funding was needed from central government.

·       Concerning Productivity Plans – New Guidelines Revealed and a Note of Caution, the Plan had been approved by Cabinet on 9 July and submitted by the deadline. The Plan would be published to the Council’s website and a link added to the next Member’s Bulletin.

·       Concerning the outstanding audits for 2020/21 to /22/23, the aim was to fully complete the audit for 2020/21, obtaining a full audit opinion.  For 2021/22 and 2022/23, the aim was to have value for money opinions only.  The Council awaited a timeline from its outgoing Auditors, Ernst and Young regarding completion.

·       The Director for Corporate Services reassured Members that all draft accounts had been produced by the end of May deadline and published to the Council’s website, along with the draft Annual Governance Statement.  Failure to complete the audits was not a reflection on the Finance Team, who had continued to meet those challenging deadlines.

·       The External Auditor confirmed that failure to complete audits was very much a national issue.  Legislation and guidance was needed to be able to progress matters.  External Audit could audit the Council’s accounts for 2023/24 and expectation was that prior years would have ‘a disclaimed opinion’ (a prescribed form of wording by Audit Standards), meaning that the Auditor had failed to complete work despite draft accounts and working papers being available to them.

·       The Director for Corporate Services commented on the wording for a disclaimed opinion, stating that generally the Council was given the right of reply at draft stage to confirm accuracy, while maintaining Auditor independence to reach agreement on what is fair and reasonable

·       Apart from the uncertainty and ongoing pressure to staff was the potential reputational damage.  The Council was occasionally asked by private companies who were not familiar in dealing with local councils for copies of its accounts but this was rare.

·       External Audit advised that there was uncertainty over any additional costs.  Auditors were aiming to not undertake significant work around the opening balances and issue a moderate opinion in 2023/24 to keep costs in line with the scale fee.

·       In response to a Member question concerning collection fees for garden waste remaining with the public or passing to the Council, Councillor Browne, Chair of Scrutiny Committee advised that the Council’s waste collection contract would be considered as part of the Scrutiny Work Programme and he would provide feedback to Members.

·       The Chair thanked the External Auditor for the report, commenting that he would have welcomed seeing some more local statistics as the information in the report appeared very generic.

RESOLVED that the Committee NOTED the progress made by External Audit in delivery of the External Audit Plan for 2024/25 and the sector updates.