Agenda item

To receive an update from the Council’s External Auditors Grant Thornton LLP.

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 that External Audit had received a high volume of working papers in support of the draft statement of accounts from officers and all indications based on this were very positive.  External Audit would begin fieldwork next month (in October 2024).  The backstop was now in place, as detailed at appendix 1 of the report.  The predecessor auditor was responsible for 3 audits prior to 2023/24 and had until 13 December 2024 to issue opinions on these.  External Audit’s focus would be on providing as much assurance as possible on the current year of 2023/24 by the end of February 2025 to issue an opinion.  Moving forward, statutory dates needed to be set for the completion of future audits.

Ms. Lillington advised that External Audit anticipated that there would be no assurance over the opening balance position for the 2023/24 accounts.  Their focus was on gaining as much assurance as possible on the in-year position but it was likely that the Council would receive a disclaimed opinion for the 2023/24 accounts.  There were some difficulties on regaining assurance for certain balances, particularly on the reserves, which were highly dependent previous audit years and property, plant and equipment balances were equally as challenging to regain assurance in a short period of time.

The Assistant Director for Resources commented that it was disappointing to anticipate disclaimed opinions on the accounts, as the Finance Team work hard to meet required deadlines.  The predecessor auditor would submit a report on this work to Committee in November.  He reiterated that the Finance Team would work with External Audit in October on the 2023/24 audit.

During discussion the following points were noted:

·       In response to a Member question, the Assistant Director for Resources advised that the uncompleted audits, lack of assurance opinion etc. did not necessarily present a potential risk to the delivery of planned programmes and expenditure.  Outturn reports and the accompanying narrative statements detailed performance against allocated budgets and were much more informative in that respect.

·       In response to a Member question, the External Auditor advised that the impact of the uncompleted accounts for 2020/21, 2021/22 and 2022/23 and no assurance over the opening balance for 2023/24 would impact the Council’s accounts in future years.  There would be many balances (i.e. cash balances, debtors and creditors etc.) where assurances from 2023/24 would follow through into 2024/25 but not all (i.e. accounting reserves and property, plant and equipment etc, due to valuing assets within a rolling programme rather than each year).  An option would be to accelerate valuation programmes to accumulate assurance quicker.

·       In response to a Member question, the External Auditor confirmed that the same rules of valuation applied to the Housing Revenue Account, although it would be valued in a slightly different way.  She reiterated that External Audit were focussed on obtaining as much assurance as possible for 2023/24, recognising that there was very little that could be done on the vast majority of the opening balances but with the aim of returning to a position of full assurance as soon as possible.

·       The Chair highlighted that the Housing Revenue Account was a separate, ring fenced account, which was met by the tenants of the Housing Revenue Account.

·       The Chair thanked the External Auditor for her work.

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.