Agenda item

The Committee noted that the audit of the 2019-20 accounts was nearing completion and the Council’s external auditors intended to issue an unqualified opinion on the financial statements, which the Chief Finance Officer (CFO) would re-certify in accordance with the Accounts and Audit Regulations 2015 immediately after the Committee meeting.  The auditors had issued an Audit Findings report, which was appended to the committee report, together with a management action plan.  An update to the Audit Findings Report had been circulated to the Committee on the Supplementary Information Sheet.

The auditors had not yet found any misstatements which affected the primary financial statements or financial position of the Council.  The auditors had found some areas that required adjusting and these were highlighted in the audit findings report.  There are also some minor changes that were not individually significant enough to warrant separate disclosure in the findings report.

The auditors had proposed to give an unqualified Value for Money conclusion.  Their recommendations relating to value for money were also included in the action plan.  The key points related to the medium-term financial plan and the general fund capital programme. However, the auditors drew the Committee’s attention to an Emphasis of Matter, highlighting material uncertainties, caused by the financial impact of the COVID-19 pandemic, around the valuation of land and buildings, investment properties and the Council’s share of pension fund property investments as at 31 March 2020, which had been reflected in the accounts.

The auditors had indicated that, in their opinion, the Council had proper financial arrangements in place to deal with the challenges to financial sustainability caused by the COVID-19 pandemic, but had recommended that the financial position in respect of reserves should continue to be monitored and reported.

The auditors reported at the meeting that it was not now anticipated that the audit would be completed by the 30 November deadline. 

The Chairman of this Committee was required to issue a letter of representation on behalf of the Council to the auditors to provide assurance over the management framework operating at the Council and the disclosures in the accounts.  A copy of the proposed letter, which had been omitted from the committee report, had been circulated to the Committee on the Supplementary Information Sheet.

The Committee’s attention was drawn to the Action Plan in the Audit Findings Report and the management responses, and to the various adjustments made to the accounts since the first draft of the accounts were published in August.

During the debate, the Committee made the following comments:

·       In response to a concern over the possibility of identifying any significant issues during the final stages of the audit, the auditor confirmed that the most significant areas where potential issues arise were dealt with in the early stages of the audit process.  However, should any significant issues come to light, they would be communicated to the Committee.

·       Clarification was sought in respect of whether pension fund net liability would continue to represent a significant audit risk each year.  It was confirmed that, given the very large figures involved and the need for expert help and advice and the uncertainties and complexity of underlying assumptions it was likely that it would remain a significant audit risk.

Having considered the report and the update on the Supplementary Information Sheet, the Committee

RESOLVED:

(1)        That Grant Thornton’s Audit Findings report attached as Appendix 1 to the Committee report, including the Update on the Supplementary Information Sheet circulated to the Committee prior to the meeting, and the management responses provided in the action plan (as set out in Appendix A to Appendix 1 to that report) be noted.

(2)        That the letter of representation, as set out in Appendix 2 to the Supplementary Information Sheet, be approved, and that the Chairman be authorised to sign the letter on the Council’s behalf.

Reason:

To allow the external auditor to issue his opinion on the 2019-20 accounts.