Agenda item

To consider the report of the Interim Chief Finance Officer, (copy enclosed).

The Committeeconsidered the report of the Interim Chief Finance Officer that provided the Council’s External Auditor, Deloitte, with the opportunity to report the key findings of their audit to those charged with governance, prior to issuing their opinion on the 2020/21 Statement of Accounts and the report for the year ended 31 March 2021 at Appendix 1.

The Chairperson introduced the report and deferred to the Interim Chief Finance Officer to provide the context. She advised that this Committee under its Terms of Reference was charged with reviewing the External Audit opinion attached at Appendix 1 and then invited the Associate Partner from Deloitte to take the Committee through the report.

He drew Members’ attention to the key points in the report. It was noted that based on the work concluded to date the auditors were able to issue an unqualified audit opinion on the affairs of the Council for the year ending 31 March 2021. The reasons for the delay in completion of the accounts were outlined in the report and included issues relating to valuations, infrastructure assets, cashflow, a significant correction in the accounts relating to covid revenue etc. all of which were successfully concluded as a result of the hard work of all involved. There were no significant weaknesses which in audit terms was a good outcome. 

The Associate Partner then addressed the issue of the audit fee which on the 20 August 2020 had been set at £99,580, subsequently reduced to £88,580 due to a revised scope and now, taking into account the further additional work and hours involved, the final proposed audit fee was £99,500 in total. In conclusion he advised on next steps in relation to the fee approval process in that Deloitte, the External  Auditor will provide a fee proposal to the Council to seek agreement. The Public Sector Audit Appointments (PSAA) Ltd will adjudicate on what constitutes a fair fee, Deloitte will submit their proposal to the PSAA in early January 2024 setting out the premise for the fee variation and the PSAA will then seek the Council’s opinion on the audit fee level.

The Chairperson then moved the recommendation which was duly seconded and opened the discussion.

In response to issues raised Officers provided the following information:-

• That whilst there were policies in place around asset management they were not fully documented, therefore, work was now underway on a solid Asset Register.
• That Deloitte will work on the Statement of Accounts until 2022/23 and KPMG will then take over as the Council’s External Auditor for the 2023/24 accounts.
• That the reason most authorities experienced difficulties in accounting for the Covid grant revenue was that Government didn’t provide clear guidance on which grants should be treated as ‘agent’ and which as ‘principal’.
• That work on the 2021/22 accounts was underway and it was hoped to finalise pre-Christmas with priority given to the Value for Money aspect of the work.

In response to a comment from the auditor regarding uncorrected misstatements in the accounts the Interim Chief Finance Officer recommended that the misstatements not be adjusted as they were already noted in the report and were not deemed material enough to warrant a delay in approving the 2020/21 accounts.

There being no further discussion the Chairperson put both recommendations, duly seconded, to the Committee and they were agreed by assent.

RESOLVED that Members considered the report of the external auditor at Appendix 1 and agreed that the uncorrected misstatements in the report were not material enough to warrant adjustment.