Agenda item

This report provides an update on the ongoing audit by Grant Thornton with their Interim Audit Findings Report, presented at Appendix 1 and a confirmation of auditor appointment from 2023/24.

The Accounts and Audit Regulations (Coronavirus) (Amendment) 2021 require that the Audit Committee consider the issues raised by the external auditors prior to approval of the Statement of Accounts.

This report provided an update on the ongoing audit by Grant Thornton with their Interim Audit Findings Report, presented at Appendix 1 and confirmation of auditor appointment from 2023/24.

The Head of Corporate Accounts highlighted consideration of the final report had been delayed. It was planned that the Audit Committee would review the final report in March 2023. The Head of Corporate Accounts advised the Committee the appointment of Grant Thornton LLP as external auditor for the fiscal years 2023/4 – 27/28.

Members then raised comments and questions including the following:

Delay in completing the statement of accounts – A member asked what redress the Council had with the professional valuation company that had been a cause of delay in finalising the report. The Head of Corporate Accounts stated that the Council would consider other options in undertaking those revaluations in 2022-23 and all aspects would be taken into account when making this decision.

A member commented that the professional valuation team had limited resource so it had been deemed necessary to engage a company to undertake the work, however the Council had been disappointed with the outcome.

A member asked if the delay would impact upon the completion date and whether this would result in further complexity in the accounts and an increased cost to the Council.  The Engagement Lead, Grant Thornton stated that it was expected the fieldwork will have been completed by the end of January and the final report considered by the Audit Committee in March.

The Engagement Lead, Grant Thornton added that the fieldwork for the following year would commence later in the year, and it was hoped the statement of accounts Audit would be on a regular cycle by the end of 2024. The question of additional fees would be have to be considered holistically and there remained the potential for an increase in fees in the circumstances.

A member commented that the lack of engagement by the valuer may be a contributory factor in the event the audit fee was increased, and this would represent a cost to the public purse. The Chief Operating Officer stated the performance of the professional valuer had been a concern and in the future alternatives would be considered. The Council intended to investigate whether there had been a breach of contract.

Risk of Revenue Streams – A member queried Grant Thornton’s conclusion that in relation to the risk factors in ISA240 that the risk of fraud arising from revenue recognition could be rebutted given a  a third party had in recent years  been under a police investigation due to allegations of fraud. The Engagement Lead, Grant Thornton explained that the audit had considered the scale of income through the group accounts which led to the view it represented a lower grade risk.

Accounting for Grant Revenues and Expenditure – Clarity was sought as to how the Council had incorrectly accounted for the Better Care Fund grant to the total of £14.6million.  The Engagement Lead, Grant Thornton clarified that it represented a disclosure change and there was no suggestion the monies were unaccounted for.

Audit Fees – In response to a question regarding the additional complexity cost contained within the Audit fees the Engagement Lead, Grant Thornton stated that the fees were set out in the report but were not final. The £10,000 highlighted (page 49 refers) reflected issues relating to the 2019/20 audit which required further work by both the auditor and financial management team.

Previous Recommendations – A member asked why a significant number of recommendations from previous years remained to be determined or not updated. The Engagement Lead, Grant Thornton explained that there were no areas to be determined by the Council, work was ongoing and there were a number of actions for Grant Thornton to evaluate.

Minimum Revenue Provision – In response to a question regarding the difference in minimum revenue provision of £3.7million (page 41 refers) the Finance Business Partner – Technical Accounting explained that the Council had previously over provided in accounting for the minimum revenue payment and this had subsequently been adjusted accordingly.

Decision:

a)       The Committee noted the issues raised and judgements made by the Auditor as presented at Appendix 1 to the report.

b)       The Committee noted the appointment of Grant Thornton LLP as the external auditor for the financial years 2023/24 to 2027/28.