Report to follow.
Minutes:
The Committee considered a report setting out an overview of the planned scope and timing of the 2023-24 statutory audit of Guildford Borough Council for those charged with governance.
The scope of the audit had been set in accordance with the Code and International Standards on Auditing (ISAs) (UK). The external auditors were responsible for forming and expressing an opinion on the Council and group’s financial statements that had been prepared by management with the oversight of those charged with governance (this Committee); and considering whether there were sufficient arrangements in place at the Council and group for securing economy, efficiency and effectiveness in the use of resources. Value for money related to ensuring that resources were used efficiently in order to maximise the outcomes that could be achieved.
The External Auditor informed the Committee that the 2020-21 accounts had now been signed off, resulting in the audits of the 2021-22, 2022-23 and 2023-24 accounts remaining outstanding. The Committee was advised that legislation had now been introduced, which imposed a deadline of mid-December 2024 by which audits for 2021-22 and 2022-23 had to be completed. The External Auditors had agreed with management that they would have insufficient time to conclude the audits of the Council’s accounts for those years given some of the issues that would potentially require disclosure and the significant work that would be necessary around the Housing Maintenance issue. It had had therefore been agreed with the External Auditors that they would take the opportunity to disclaim both of those years using the backstop legislation which would mean that they would move on to the 2023-24 audit, the plan for which was set out in the report.
The Committee noted that the timescale for completion of the 2023-24 audit was end of February 2025. The implications in terms of opening balances was also noted as there would no assurance on the accuracy of those figures within the accounts; however, this was a national issue impacting on several hundred other councils.
During the debate, the Committee made the following points:
· In response to questions as to how confident the External Auditors were in being able to complete the 2023-24 audit by the end of February 2025, and whether the Council would be refunded the audit fee for those audits that had been disclaimed, the External Auditors confirmed that the Council would be refunded, subject to payment for the value for money work carried out in respect of the 2021-22 audit, the joint report in respect of 2022-23 and 2023-24, and any costs associated with the disclaimer. The External Auditors confirmed that, although they had not yet started work on the 2023-24 audit and had not yet received the full set of accounts, they were confident that they had the resources to complete the work on or before the deadline.
· In relation to the risk associated with recognition of HRA maintenance costs, the External Auditor confirmed that they might need to qualify the accounts if they could not complete the work necessary to respond to that risk.
Having considered the report, the Committee
RESOLVED: That the 2023-24 External Audit Plan, as set out in Appendix 1 to the report submitted to the Committee, be approved.
Reason:
External audit is required to communicate its audit plan with those charged with governance (this Committee).