Agenda item

The Committee received an update on the 2020/21 and 2021/22 Statement of Accounts. The Committee also considered the management response to the Audit Risk Assessment attached at Appendix A to the report. Prior to discussion, the Chairman welcomed Mr Mark Stocks, Audit Partner and Ms Sheena Phillips, Audit Manager from Grant Thornton, external auditors.

The revised reconciled and completed Statement of Accounts were submitted to the auditors on 23 September 2022. Due to reduction in Gross Expenditure on the Comprehensive Income and Expenditure Account (CIES) the audit materiality had decreased which had resulted in additional sample testing. The external auditors had resumed their audit from 1 November 2022. Officers were working to resolve outstanding audit queries promptly and held regular bi-weekly meetings with auditors to monitor progress. Due to additional sampling, it was anticipated that the audit would be completed in January 2023 and the final accounts for 2020/21 would be presented to the Audit and Governance Committee for approval at its February meeting.

Work continued to progress on the 2021/22 Accounts draft accounts ensuring all the issues raised by the auditor on 2020/21 accounts were addressed. However, the accounts would not be finalised until the audit for 2020/21 was completed as this could potentially have an impact on the opening figures.

The Audit Risk Assessment report covered areas of auditor risk assessment along with the management response. The Committee considered the management response to aid in fulfilling its responsibilities in relation to the financial reporting process.

Key points raised during discussion included:

• Mr Stocks advised that there remained a focus on the completion of the 2020/21 accounts and an external audit team was working on the audit which would require a good deal of Council officer time to support and resolve queries. A team from Grant Thornton would also shortly be undertaking the Pension Fund Accounts 2021/22 audit, and associated sign off of admitted bodies to the Pension Fund. January/February 2023 was the target date for completion. It was noted that officers would be stretched at this time of the year, with budget preparation amongst a range of other priorities.
• Financial planning was as it should be for the 2021/22 accounts, although there could be resourcing issues in addressing the backlog of queries for 2020/21. Should all queries be resolved, officers would work with the external auditors to establish a timeline for the 2021/22 Accounts. It was anticipated that the 2021/22 accounts would be ready early on in the new financial year.
• The national infrastructure issue which affected all upper tier or unitary authorities was still awaiting legislation to pass through Parliament. If this had not been rectified by February 2023, the 2020/21 accounts would be signed off ‘subject to’ any infrastructure accounting points arising from the legislation.
• The Committee heard that many of the challenges encountered with the 2020/21 accounts were when establishing an opening position and the associated work that went with this. All local authorities who had been through the unitary process had encountered similar delays. Challenges were compounded by resourcing issues, and key staff leaving the Council which meant there was a lack of knowledge transfer from legacy Councils. As the team built its resilience it was anticipated that there would be a more ‘normal’ approach able to be taken with future Statements of Accounts work.

RESOLVED:

(i)                 That the 2020/21 and 2021/22 Statement of Accounts updates be noted.

(ii)               That the management response to the auditors be noted as accurate.