Agenda item

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

The Committee considered the report of the Interim Chief Finance Officer presenting the International Standards on Auditing (ISA) 260 Audit report, attached as Appendix 1 to the report and the Annual Audit report (Appendix 2) for the financial years 2021 / 22 and 2022 / 23.

It was noted that the Audit Plan report (Appendix 3) was presented for review. Due to the constraints of the backstop dates issued by UK Government, the Audit Plan report was being presented alongside the main audit reports. Normally this would be presented before audits took place.

The Interim Chief Finance Officer presented the report and introduced the Council’s External Auditors - Paul Hewitson (Associate Partner) and Tope Odunsi from Deloitte. He commented on the new backstop dates introduced by the Government and the work undertaken to deliver the audits on time in light of these, highlighting the work done by the Finance team in respect of this. Members were informed that the Chartered Institute of Public Finance and Accountancy (CIPFA) Audit Committee had just published a guidance document ‘the Local Audit Backstop: Key Questions Answered for Audit Committees’ regarding the backstop dates and how Audit Committees could help, and the Officer advised he would circulate this following the meeting. At this point the Chairperson, thanked the Interim Chief Finance Officer for his hard work since joining the Council.

The Chairperson 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 specifically in relation to ISA 260. It was noted that because of the backstop dates issued by the Government a disclosure of opinion in respect of both financial years would be provided and Members were informed that some key paragraphs in the 2021 / 21 Audit would be different to previous years because of this. Appendix 1 detailed any uncorrected and principle corrected mistakes, along with the response from the Council’s management team. In respect of Value for Money (VFM) no risk of significant weakness in the Council’s arrangement had been identified. No objections or queries had been received from local objectors, there were no matters resulting in the need to issue a public interest report and no further powers under the Local Accountability Act had been exercised. The Associate Partner informed Members the External Auditors would work the Council’s appointed Auditor for 2023 / 24 onwards, KPMG, in respect of the handover of the audit of the Council and to ensure they understood the work completed and what was outstanding.

In response to questions the Interim Chief Finance Officer provided the Committee with the following information:

·                In respect of the outstanding management responses, Officers had been through and addressed all efficiencies and management responses given. It was agreed that the Committee would be provided with a copy of the management response outside of the meeting.

·                An update in respect of the work to build resilience within the finance team was provided along with proposals to continue this, including gaining CIPFA accreditation.

·                The backstop deadline for the 2023 / 24 audit was tight, with accounts having to be published by next Friday. However, the Interim Chief Finance Officer advised he had confidence in the finance team that this would be delivered.

The Associate Partner then took the Committee through the Annual report for the financial years 2021 / 22 and 2022 / 23(Appendix 2 to the report). It was noted that under the backstop provisions, the areas considered in respect of VFM had been amended and the criteria ‘improving economy, efficiency and effectiveness’ dropped. No significant weaknesses or risk of significant weakness had been found and moderate assurance had been given. The Associate Partner commented that within the Council there was challenge, appropriate promotion of standards of conduct and a good commitment to budget reconciliation. There was one recommendation from the Auditors regarding triangulation and the Chairperson read this out, asking that it be Minuted.

The recommendation from the external Auditors was as follows:

“We recommend the Council clearly articulate how prioritised savings will support the long-term delivery of statutory services and explicitly link these savings to the financial projections within the MTFS. This will provide greater transparency and assurance to stakeholders regarding the financial sustainability of the Council's operations. We encourage the Council to embed this approach within its planning processes to ensure ongoing alignment between financial plans and service delivery.”

In response to a question, the Associate Partner highlighted that they were satisfied that there were no significant weaknesses in the Council’s arrangements. Along with sufficient financial stability, reserves and a programme of planning, management, and efficiency to secure financial sustainability.

The interim Chief Finance Officer expressed his thanks to the External Auditors for their commitment of hitting the backstop and supporting him and his team. The External Auditors also thanked the Officer and his team. The Chairperson asked that the Committee’s thanks be given to the previous Interim Chief Finance Officer for the work she had done for the Council.

The Chairperson then moved the recommendations which were duly seconded and agreed.

RESOLVED

(i)             That Members considered the ISA 260 Audit Report for 2021 / 22 and 2022 / 23 at Appendix 1 to the report. The ISA 260 report aims to ensure that auditors communicate significant findings from the audit to those responsible for governance, such as the board of directors or Audit Committee;

(ii)            That Members considered the Annual Audit Report for 2021 / 22 and 2022 / 23 at Appendix 2 to the report. This report evaluates how effectively an organisation uses its resources to achieve its objectives;

(iii)           That Members considered the Audit Plan Report for 2021 / 22 and 2022 / 23 at Appendix 3 to the report. This report sets out the plan for the upcoming audit.