Agenda item

The Committee received an update on the 2020/21 Statement of Accounts. Mr Mark Stocks, Audit Partner, Grant Thornton, External Auditor was in attendance for this item. Mr David Skinner, Section 151 Officer introduced the item. On 24 March 2023 the Committee had received a briefing on the terminology used in audit reports which also covered technical areas of the accounts, a recording of this session had been circulated to Committee Members who were unable to attend on the day.

Key points raised during the update and discussion included:

·       Progress had been made on the 2020/21 accounts, with the approach and format of the working papers now agreed and the testing schedule set out in sections 1.2 to 1.6 of the report appended to the agenda pack. The external audit for the Pension Fund 2020/21 and 2021/22 were close to completion, as was the Housing Benefit 2020/21 audit. It was anticipated that the outstanding work on these would be completed in early April.

·       The Committee received assurance that both the Council and External Auditors had sufficient resource to deliver the outlined plan of work. There was a commitment from the Council’s Senior Management Team and Cabinet Member to ensuring adequate resourcing was in place and it was being explored whether external firms could provide additional capacity. From an external audit perspective, there was also commitment of resources with it being noted that the 2020/21 accounts audit had involved around five to six times the amount of time it ordinarily would have taken due to the issues with the previous versions of the accounts presented.

·       In terms of timescales for subsequent accounts, the Committee was advised that a realistic date to catch up would be circa Christmas 2024, however this could not be guaranteed as was dependant on any issues that may arise and on retaining in house capacity. It was expected that the 2020/21 accounts would be ready to be signed in December 2023 and now that the approach to working papers had been agreed, it was hoped that the 2021/22 accounts would be a much more efficient process.

·       The Committee heard that it had been the opening balances which had taken a significant amount of time, however as 2020/21 would be closed there would not be the same issues with accounts being consolidated for 2021/22. The use of multiple legacy systems had also hindered the process, which would remain an issue for 2021/22 although there was now knowledge of where issues had arisen and how they could be addressed. Quality assurance checking of the accounts prior to submission for external audit was also highlighted as being key to aid the process.

·       The Committee questioned national deadlines for accounts sign off, there was a deadline of November for the previous year’s accounts, however very few local authorities had their accounts signed off in that time period and the national deadline should not be a focus at this time. There were multiple issues around this deadline for complex local authority accounts which audit firms were liaising with the Financial Reporting Council and Government on.

·       Following a query, the Committee was advised that to date the Council had not been sighted on any national changes in relation to disability benefit and the housing benefit system. As such, an immediate change was not anticipated and would require a consultation period prior to any change.

·       Specific to this Council, the revenues and benefits systems had consolidated from the previous legacy systems in the current financial year. The Committee heard that there was a plan to manage the audit of this and information from previous systems had been retained to assist auditors in concluding the housing benefit audit.

·       It was raised that there had been discrepancies identified with property valuation, the Council used Carter Jonas to value its assets who used a valuation date of 31 December, however the external auditors had to value properties as at 31 March. The Chairman suggested that the Section 151 Officer negotiate this with Carter Jonas, to assess whether valuation dates could be brought in line with the external auditor.

ACTION: Mr D Skinner to explore the movement of the property valuation date used by Carter Jonas.

·       A query on who signed off bad debt and the balances involved was raised, the Committee was informed that the approval process for bad debt was detailed in the Council’s debt management strategy, with balances below £10k requiring Corporate Director and respective Head of Finance sign off, whilst those over £10k also required the approval of the Section 151 Officer. Revenues and benefits balances were also shared with the Cabinet Member for Accessible Housing and Resources.

ACTION: Mr D Skinner to circulate figures on bad debt to the Committee

RESOLVED:

That the update be noted