Councillors and committees

Agenda item

EXTERNAL AUDIT UPDATE REPORT

To inform the Committee of the result of the external audit of the council’s 2020/21 Statement of Accounts, to receive the external auditor’s final Audit Findings Report and to approve the council’s letter of representation from the Executive Director of Resources. 

Minutes:

Speakers:

Barry Stratfull, Chief Accountant (Corporate)

Ciaran McLaughlin, Grant Thornton

Ade Oyerinde, Grant Thornton

Mark Hak-Sanders, Strategic Finance Business Partner

Neil Mason, Assistant Director Pensions (AD Pensions)

 

Key points raised during the discussion:

 

  1. The Chief Accountant introduced the Statement of Accounts and the letter of representation.  It was an anticipated unqualified opinion.  No matters were outstanding that would require changes to this opinion.  Changes were made to the Statement of Accounts and these were highlighted in the report.
  2. The representatives from Grant Thornton provided Members with a detailed summary. Members noted the following:

·         There was an adjustment of £45m to the Pension Account due to adjustments in values.

·         The management representation letter would be signed off tomorrow

·         Value for money work was still outstanding at the moment, but the deadline of 28 February would be met

·         The final statement would be presented to the Committee in January with the Annual Report.

·         Thanks were extended to the Finance and Pension teams for the good working relationship had with the auditors.

·         Three properties had been missed off the revaluation list.

·         Reliance on the auditing of subsidiaries, by external auditors, was mentioned in terms of timing for receipt of their papers in order for Grant Thornton to do their work.  Papers were received very late which meant additional time and challenge for Grant Thornton.

  1. The Strategic Finance Business Partner explained why the three investment properties were not valued in that they were included on the list provided to external valuers so there was not a problem with internal process.  However, the valuation was not done by the deadline and officers were working with valuers on the issue of lateness.  The external valuers had experienced a resourcing issue.
  2. The Chief Accountant explained that the Council have to publish draft accounts before district and boroughs councils close their accounts.  Therefore, a decision was made that because there would be no material effects, in terms of impact, on the accounts, to produce the draft with district and borough collection fund updates and add in changes later.  He also confirmed that this was not the first time district and boroughs had been late with producing their information and was working with them to try to get reports in on time.
  3. The Strategic Finance Business Partner went on the explain that covid had had an impact on resourcing of what were often small finance teams of district and borough councils and that this was a nationwide issue. He also stated that officers met with district and boroughs finance on a monthly basis to discuss these types of issues.  Realistically, he suspected that the accounts would never be in their final form at the draft stage.
  4. Members requested access to the Value for Money work as soon as possible. Grant Thornton explained that the report was being checked for accuracy and would be finalised before Christmas and presented to Committee in January.
  5. Members asked whether the Finance team were comfortable with the current policy and recommendation around Minimum Revenue Provision (MRP) and whether it would be reviewed in light of the repeat recommendation.  Grant Thornton stated that they were happy that it was not unlawful but did depart from statutory guidance in a small number of areas which was allowed. The Strategic Finance Business Partner explained the departure in detail, for new Members, and how this would be reviewed in future.
  6. The Committee requested a regular report with fuller detail on MRP in order to monitor.  The Strategic Finance Business Partner stated that he would provide a fuller response as part of the Treasury Management Strategy paper that was to be considered by the Committee in January and would review how to report in future.
  7. A precis of the Eco Park issues was requested and explained to the Committee.

 

 

Actions/ further information to be provided:

The Strategic Finance Business Partner stated that he would provide a fuller response as part of the Treasury Management Strategy paper that was to be considered by the Committee in January and would review how to report on MRP in future.

 

Resolved:

1.    That the 2020/21 Statement of Accounts, as attached in Annex A to the submitted report, be approved for publication on the council’s website.

2.    That the Executive Director of Resources’ letter of representation, attached as Annex C to the published report be approved.

 

Supporting documents: