Agenda item

To update the Committee on the progress of the audit of the 2021/22 Statement of Accounts and the delayed publication of the draft unaudited Statement of Accounts for 2022/23.

The report was presented by the Assistant Director of Finance.

The draft 2021/22 Statement of Accounts were reviewed by the Governance and Audit Committee on 20 July 2022 and subsequently published on 29 July 2022.  Updated Statement of Accounts were presented to the Governance and Audit Committee on 30 November 2022 which reflected the changes that had been identified by the Finance Team and those agreed with the external auditors, Grant Thornton.  In accordance with the Accounts and Audit (Amendment) Regulations 2022, the target date for completing the 2021/22 audit and publishing the final accounts was 30 November 2022 which the Council did not meet due to delays beyond its control.

Since the last update to the Governance & Committee in November 2022, significant progress had been made with the external auditing of the accounts.  With respect to Property, Plant and Equipment (PPE) external audit had requested additional information from the Council and the external valuers to enable them to audit the property valuations included in the accounts.  This information had now been provided to the audit team in order for them to finalise the audit of this important area of the Council’s accounts.

Following the completion of the triennial review of the pension fund in 2022/23 external audit requested an updated 2021/22 IAS 19 Pension Valuation Report to enable them to establish whether the review has had a material impact on the pension information included in the accounts.  This information has been provided to the audit team for review.  The Assistant Director of Finance informed Members the Finance Team were confident in having the accounts signed off by mid-August 2023.  In respect of the 2022/23 accounts, a notice of the delay was published on the Council’s website.

Draft 2022/23 accounts would be brought before the Governance and Audit Committee in September 2023, however Grant Thornton Auditors have indicated they were unlikely to meet the deadline of 30 September 2023.  An update was to be provided at Committee at a future meeting.

The following points were raised in discussion:

·            Members were concerned about the unfortunate delay by external auditors in signing off the 2021-2022 Statement of Accounts and the impact on the 2022-2023 accounts.

The Deputy Leader acknowledged the concerns and confirmed that the shortage in supply of external auditors was a nationwide issue which was beyond the control of the Council.

The Assistant Director of Finance informed Members that KPMG had returned to the external audit market for Local Government which enables more audit firms to be for local government work.   Conversations were taking place with Grant Thornton Auditors and KPMG to ensure a smooth handover and establish when the audit would be completed.  Any changes on the value of assets would impact both the balance sheet and the income and expenditure statements for 2021-2022.  However, these would be ‘reversed out’ as they were accounting adjustments, not actual monetary adjustments.  On the 2022-2023 accounts, the Council had been able to process all year-end adjustments, except for depreciation and the revaluation, gains and losses associated with land and buildings.  It was expected, therefore, that the depreciation cost would increase against service areas.

The Chief Finance Officer confirmed that only 35% of councils have had their 2021-2022 accounts signed off. 

It was proposed, seconded and AGREED that the Governance and Audit Committee:

a)         Noted the progress of the audit of the 2021/22 Statement of Accounts

b)         Delegated authority to the Chief Finance Officer to make any final wording changes and accounting adjustments to the 2021/22 Statement of Accounts following the conclusion of any outstanding audit queries.

c)         Delegated approval of the audited 2021/22 Statement of Accounts and the Letter of Representation to the Chairman on behalf of the Governance and Audit Committee in consultation with the Chief Finance Officer following the completion of the audit.