Agenda item

To consider the report of the Director of Finance (copy enclosed, Appendix 1 to follow).

The Committee considered the report of the Director of Finance presenting the initial findings report provided by the Council’s appointed External Auditor (KPMG) for their audit review of the accounts for the year 2024 / 25. The Chairperson reminded the Committee that these documents had been circulated in a supplementary pack ahead of the meeting.

The Director of Finance presented the report and apologised for the late circulation of the appendices. He commented on the improvement made over the past few years and referred to the hard work of the Finance Team on the accounts. The Director then referred to Emma Larcombe from KPMG (External Auditors) to provide further information in relation to their reports.

·                Draft Audit Progress report

This report summarised the key issues identified during the audit, and it was noted that it did not repeat matters previously communicated to the Council through written communication in July 2025. The report had been prepared in connection with the External Auditors Audit of the Council’s financial statements as at the year ended March 2025.

Members were advised that this was a draft report as the audit was not yet complete, and matters communicated in the report may change pending finalisation of the audit report. Attention was drawn to page 6 of the supplementary pack ‘Our Audit Findings’ which outlined the outstanding matters in relation to the audit.

Ms Larcombe took Members through the recommendations they had raised as a result of their work advising that the Council was in a good position and reiterated the comments of the Director of Finance regarding the work of the Finance Team. Page 7 of the supplementary pack set out the outstanding matters. Members were advised that recommendation 5 (set out in the Control Deficiencies appendix) was a duplicate of recommendation 4 and would therefore be deleted.

·                Draft Annual Audit report for the financial year ended 31 March 2025

This report provided a summary of the findings and key issues arising from the 2024 / 25 audit of the Council. It had been prepared in line with the requirements set out in the Code of Audit Practice published by the National Audit Officer (the ‘Code of Audit Practice’) and was required to be published by the Council alongside the annual report and accounts.

The report was a high-level overview of the findings of external audit’s financial statement audit along with more rationale, and detailed assessment of the findings of Value for Money (VFM) work. Ms Larcombe took Members through the content of the report advising that it was an interim report which would be reissued once the audit had been completed. There were no concerns in terms of Value for Money achieved across the Council.

It was noted that a significance weakness in relation to the production of the accounts had previously been raised and the delay relating to this had been recognised at the time. Given the significant improvement seen this year and the production of the accounts Ms Larcombe informed Members that she was happy for this weakness to be removed.

Mr Smith, the Independent Person, commended the Finance team on the fantastic job it had done under immense pressure. He commented on the work done by the previous Auditors and felt there had not been justification for the ongoing concern that had been disclaimed.

During the debate that ensued a number of questions regarding property valuations were raised and in response the following information was provided:

·                External Audit used its own team of valuers, a sample of investment properties valuations would be identified, and the team would review this looking at the underlying assumptions used by the Council’s valuation team. It was noted that the differences identified in respect of valuations were both factual errors and External Audit was comfortable with the rest of the methodology used by the Council. The Leisure Centres were classified as part of the Council’s standard portfolio and although they would have been reviewed and valued, they had not been considered in the particular work done by External Audit.

·                It was confirmed that Springfield Industrial estate was included in the investment properties list and following review External Audit had confirmed they were happy with valuation.

·                In response to further questions, the Director of Finance advised that he was happy to share further details regarding valuations and the different Council assets included.

·                A question was raised regarding the Burnham-on-Crouch golf club and the Director of Legal and Governance explained that for every lease the Council entered into a valuation would be done to set the rent. However, the rental value wouldn’t necessarily have a direct impact on the value of a property. The valuer would look at the market rent for similar venues as part of their valuation when coming up with a proposed rental value. If Officers were looking to agree a lease below market value, in accordance with the Constitution, this would be brought forward to Members for consideration.

The Chairperson moved the recommendations set out in the report. These were duly seconded and agreed.

The Chairperson thanked Ms Larcombe for joining a meeting of the Finance Working Group and her help in ensuring the Council’s processes were accurate and complete.

RESOLVED

(i)             That Members considered the findings presented by the External Auditors, (KPMG) and noted the status of the reports circulated and next steps arising;

(ii)            That Members noted the good progress previously reported to the Finance Working Group based on the feedback received from KPMG as well as the significant pressure placed on Officers in responding to queries.