Agenda item

It was noted that, at its meeting on 26 November 2020, the Committee had received the statement of accounts for 2019-20 and the draft Audit Findings Report from the Council’s external auditors, Grant Thornton.  At the time it was anticipated that the auditors would still sign off the accounts by the November deadline.  Unfortunately, the audit had taken much longer than expected, due partly to the issues with working remotely during the COVID19 pandemic and to 2019-20 being the first year that the Council had produced and required the audit of ‘Group Accounts’. 

The Committee was reminded that the Council had a subsidiary company, Guildford Borough Council Holdings Ltd, which in turn had a subsidiary company, North Downs Housing Ltd.  The Accounts of North Downs Housing Ltd were required to be consolidated into Guildford Borough Council Holdings Ltd and then the consolidated accounts of Guildford Borough Council Holdings Ltd were required to be consolidated, along with the Council’s single entity accounts, into the Guildford Borough Council Group Accounts.  This was the first year that the subsidiary companies had been of sufficient size that they required consolidation into the Group Accounts.

As part of the audit, a number of adjustments had been made to the accounts, which were detailed in the audit report appended to the Committee report.  The audit report also included 12 further recommendations that had not been reported to the Committee in November. Details of the management responses to those recommendations were set out on the Supplementary Information Sheet circulated prior to the meeting. 

The Committee noted that the audit was now complete, and a revised final version of the accounts had been presented to the auditors who were now ready to issue an unqualified audit opinion on the 2019-20 accounts. 

During the debate the following points were made:

·       In response to a query over the inclusion of Covid-19 as a material uncertainty in respect of property valuations in respect of the accounts for 2019-20, the Council’s external auditor confirmed that the RICS updated guidance required valuers to assess there to be a material uncertainty for Covid, which had been applied across local authority and NHS audits

·       In relation to ‘Future Guildford’ being a key factor in mitigating the £3.3 million budget gap identified in the medium term financial plan for the period to 2023-24, it was noted the data upon which that prediction had been based had been identified in the 2020-21 budget, which was updated as part of the 2021-22 budget approved by the Council on 10 February 2021

·       In response to a query as to whether it was normal for discrepancies amounting to over £1m to be regarded as immaterial, the external auditor confirmed that they determine materiality in respect of audit risk, but the Council could take its own view on materiality.  This Committee could agree either to accept the accounts as presented with no adjustments being made in respect of the items listed on page 55 of the auditor’s report, or if the Committee felt that adjustments should be made in respect of those reported items, it could request that to happen.  The officers had provided reasons for not adjusting the items, which had been accepted by the external auditor.

The Committee

RESOLVED:

(1)    That the Audit Findings report for Guildford Borough Council for 2019-20, as detailed in Appendix 1 to the report submitted to the Committee, as amended by the updates on the Supplementary Information Sheet, be noted.

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

Reason:

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