Agenda item

Report of the External Auditor (Grant Thornton)

The Audit and Procurement Committee considered a report of the Director of Finance and Resources (Section 151 Officer) in relation to the 2025/26 External Audit Plan provided by the Council’s external auditor, Grant Thornton.

The Audit Plan provided details of the planned scope and timing of the audit of the Council’s accounts. As the focus of the audit is risk based, Grant Thornton had been liaising with the Council’s management to update their understanding of the nature of risks that could impact on the audit plan. The findings from this work were detailed in the ‘Informing the risk assessment’ report set out in Appendix 2 to the report.

The auditors design an audit programme that is tailored to address and assess the risks. Key risks identified in the Audit Plan are:

·  Management override of controls

·  The revenue cycle includes fraudulent transactions

·  The expenditure cycle includes fraudulent transactions

·  Valuation of land and buildings and investment properties

·  Valuation of the pension net asset/liability.

·  Accounting for the Group and related disclosures

·  Valuation of long-term investments

·  Equal pay claims

In support of the audit of the accounts, Grant Thornton review the controls in place for the Council’s key financial systems. The latest outcome from this work is detailed in the ‘2024/25 IT audit findings’ report which was presented to the Audit and Procurement Committee alongside the 2024/25 Audit Plan in September 2025. Although there were some areas for improvement identified, there were no significant deficiencies in IT controls relevant to the audit of financial statements. The 2025/26 IT audit had been scheduled for April 2026 and will specifically review the Business World Cloud Migration which took place in February 2026, with findings and assurances being fed into the Main Audit.

In September 2024, the Government passed legislation designed to address the backlog in the completion of local authority accounts. This legislation specified deadlines for the completion of audit work for particular financial years. In the event of uncompleted audits by the specific deadlines, auditors would be required to issue either qualified opinions or disclaimers, as appropriate.

Primarily due to delays in the publishing of the audited 2019/20 accounts, the publication and audit of the Council’s subsequent four years, 2020/21, 2021/22, 2022/23 and 2023/24 accounts were delayed. As the deadline for publishing the audited accounts in relation to these years was 28th February 2025, there was not sufficient time to carry out the full audit for these years, and the external auditor issued disclaimed opinions for these years.

The audit of the 2024/25 accounts was signed off and approved in February 2026, however, to reflect the fact that the Council’s prior four years accounts have not been audited,  reliance could not be placed on brought forward balances. This resulted in the 2024/25 audited accounts continuing to be issued with a disclaimed opinion.

The Audit Plan for 2025/26 reflected the continued application of the backstop arrangements and acknowledges limited assurance over opening balances and reserves. The Council’s strategic objective remains the rebuilding of audit assurance following the prior period disclaimers.

Whilst the Plan refers to rebuilding assurance over time, further detailed discussion was scheduled with Grant Thornton later in March regarding the scope, phasing and timing of regaining assurance work during 2025/26 and beyond. The outcome of those discussions will be reported back to the Committee as appropriate.

Members asked questions and received information about the approach to specific risks.

RESOLVED that the Audit and Procurement Committee:

1)  Note the details presented in the 2025/26 Audit Plan.

2)  Note the findings detailed in the ‘Informing the audit risk assessment – 2025/26’ report.