Agenda item

*AC 23                                  

The External Auditor introduced the progress report and sector update to Members.  For the 2021/22 Financial Statement Audit, Grant Thornton had issued its opinion on 30 November 2022, which was the legislative target deadline for that financial year.

The 2022/23 audit timetable would see the finance team produce draft accounts by the end of May 2023.  Audited accounts would need to be published by the end of September 2023.  Grant Thornton stated that they believed they would not be able to start the audit until October 2023 (due to a shortage of audit staff) and therefore they were unable to meet the national target date for audited accounts to be published by the end of September 2023. Grant Thornton were aware of the reputational implications on public opinion and the press and the added workload to the finance team. Nationally, there had been a drop off in meeting the target date to complete the audit.

The External Auditor also stated that nationally, there had been a difficulty in recruiting and retaining auditors and a proposal for a joint value for money report for 2021/22 and 2022/23 was suggested.

Following his presentation, the Committee expressed its disappointment over the situation that the audit of the accounts would not be ready in time and the reputational damage it would cause to the Council.  Members also voiced their concern for the added work pressure it would cause to the finance team.

The Section 151 Officer also expressed her concerns over the extra workload to her team and echoed the Member concerns over the reputational risk to the Council.  The Council would put a notice on its website to state why the accounts had not been audited within the legislated timescale and would state that it was due to lack of resources within Grant Thornton. However, a member of public looking would probably only see that there was not a set of audited accounts published and may not look for the reason why.

A Member of the Committee suggested that the Council should be given a reduction in its audit fees. The External Auditor confirmed that he would need to be realistic in giving a completion date and would have dialogue with the finance team. He also said that there would be no reduction in audit fees as the work would still need to be completed, but not within the legislative timescale.

A Member was of the view that this delay should be added to the Council’s risk register due to the pressure on officers through the extra workload.  Another Member questioned the level of scrutiny within the audit.  He felt that this needed to be reduced for those smaller Borough and District Councils and felt that lobbying should be carried out accordingly.  The Section 151 Officer stated that the Redmond Review did not reduce the amount of audit work on areas such as pensions and fixed assets, however a Government Call for Evidence and consultation on the audit process was now taking place and a response from the Council would be made by 17 April 2023.

The Chairman PROPOSED and it was subsequently SECONDED that a formal request from the Chairman and the Section 151 Officer be sent to Grant Thornton asking for the audit to be expedited.  Also, for the Audit Committee in 2023/24 to ensure that this was at the forefront of its considerations.  An agenda item to be put on the first Committee agenda in the 2023/24 Municipal Year in regard to this item and to lobby local MPs.  It was also requested that Group Leaders should feed back to their Members regarding the issues around the delays in the external audit.

Finally, the finance team was thanked for its work with reaching the unqualified Audit opinion.

 It was then RESOLVED that:

1.    The Grant Thornton Audit Report: Audit Findings Report 2021/22 be noted;

2.      A letter be sent to Grant Thornton from the Chairman of the Audit & Governance Committee and the Section 151 Officer to request that the audit be expedited;

3.      The Committee Annual Work Programme be updated to ensure that an agenda item be put forward to the next Audit & Governance Committee meeting that includes reference to: lobbying on this item around the audit of smaller local authorities; the lack of audit resources in national audit firms; and the Council’s response to the Call for Evidence.