Agenda item

Report of the Chief Operating Officer (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Chief Operating Officer (Section 151 Officer) which sought approval for the audited 2019/20 Statement of Accounts and Grant Thornton’s Audit Findings Report provided alongside the accounting statements. The Audit & Procurement Committee was approving these accounts on the Council's behalf. This follows a very significant period of delay resulting in these accounts being brought much later than the original regulatory deadline of 30^th November 2020.

The report indicated that responsibility for approving the Council’s Statements rests with the Audit & Procurement Committee, which is the key body in respect of understanding, analysing, and discussing the content of these statements. The Committee’s attention was drawn to the appended Audit Findings Report as the key document detailing the changes to previous versions and key issues which need to be addressed by the Council.

Audit and Procurement Committee had been informed previously of the regulations requiring local authority 2019/20 Accounts to be audited and published by 30^th November 2020. Although the Council sought to meet this requirement, further work and challenges from the Council’s auditors, Grant Thornton, led to delays which have become very significant and have led to an extremely protracted audit of the accounts. Formal updates on this position were provided to the Committee on 28^th June 2021, 29^th November 2021 and Grant Thornton provided a further verbal update to Committee on 20^th March 2023.

The Committee had been informed previously of some of the factors responsible for the delay including: practical issues with undertaking audit work in a ‘virtual’ way; additional work required of the auditors including that insisted upon by the Financial Reporting Council in relation to the valuation of Property, Plant and Equipment; well publicised pressure on the auditing sector which were outlined in the Redmond Review; delays elsewhere in the process, for instance in the completion of the accounts of the Council’s companies; and national issues in relation to accounting for highways infrastructure assets. Despite these mitigating factors, in the final analysis it is reasonable to conclude that the majority of the lapsed time in completing the Council’s accounts is as a result of errors relating to the Council’s Group Accounts and property valuations.

Although a previous report obtained delegated approval for the final Statement of Accounts to be approved by the Section 151 Officer in consultation with the Chair of Audit and Procurement Committee, the extent of the changes made since the previous draft notified to Committee had led to the conclusion that it is more appropriate for these changes to be considered formerly by a full meeting of Committee.

The report and the Statement of Accounts were presented alongside the Audit Findings Report of the Council’s external auditors Grant Thornton which details the significant changes to the draft accounts published in November 2020.

These changes have been agreed between Grant Thornton and the Chief Operating Officer (Section 151 Officer).  The Committee was recommended to approve the Statement of Accounts and endorse the Audit Findings Report. A marginal change (in relation to the delay in completing the accounts) had also been made to the Annual Governance Statement (AGS) approved previously by Audit and Procurement Committee, which was now being asked to re-approve the AGS with these marginal amendments.

The Committee noted that once approved, the final Statement of Accounts will be published on the Council’s website with almost immediate effect.

The Committee asked questions and sought assurances at the meeting from officers and the external auditor, Grant Thornton, who attended the meeting, particularly in relation to the delay in approving the accounts. The Committee noted that this was a national issue, experienced by Local Authorities across the country. It was also noted that the issue had been recognised by the Government and a letter from the Department for Levelling Up, Housing and Communities regarding the future of local audits had been sent to all Local Authorities.

RESOLVED that the Audit and Procurement Committee:-

1)  Following consideration, approves the final 2019/20 Statement of Accounts.

2)  Following consideration, accepts Grant Thornton’s Audit Findings Report provided alongside the accounting statements.

3)  Following consideration, approves the Annual Governance Statement as amended and incorporated within the 2019-20 Statement of Accounts.

4)  Requests that a copy of the letter from the Department for Levelling Up, Housing and Communities to all Local Authorities regarding the future of local audits be circulated to the Committee for their information.