Agenda item

This report presents an update to the progress of the audit of the Council’s Statement of Accounts for the financial year 2024/25 from Medway Council’s External auditors, Grant Thornton as at the end of September 2025.

Discussion:

The Chief Operating Officer introduced the report, he highlighted that the Audit was 45% complete, and officers continued to work in preparation of Auditors resuming their work in January.

The Director, Grant Thornton highlighted the progress report at appendix one to the report, there was a statutory deadline to complete the audit by February 2026. However, the statutory deadline would move earlier in the year with the backstop for the 2025-26 audit in January 2027.

The following issues were discussed:

Progress – it was commented that there remained a number of outstanding audit items marked red, it was asked whether the auditors were content with progress. The Director, Grant Thornton stated that there had been progress made compared to this time last year and the remaining work was in his view achievable. In terms of the outstanding work some areas were of more concern than others, for example leases was a new standard, so it was important to be able to set a standard for that area. In other areas such as property, plant and equipment the authority could gain assurance in other ways.

The Chief Operating Officer added that the Council acknowledged that it did not have all the evidence it needed and was working to obtain the evidence required. In terms of leases, this was a new standard, and the Chief Operating Officer acknowledged the Council did not have the did not have the necessary information in place and needed to improve. There had been some staffing issues in the finance department, and a review of department would be undertaken to strengthen resilience within the Corporate Finance section.

It was asked whether there was adequate communication between the Council and the auditors, the Public Sector Audit Senior Manager stated that the auditors were in regular contact with the finance team and senior officers, and updates were provided on a fortnightly basis.

Journal – concern was expressed regarding the number of staff which had access to post finance journals as stated in the progress report (page 40 refers). The Chief Operating Officer undertook to investigate and provide information to the Committee following the meeting.

Fees – in response to a question whether the additional work the auditors had undertaken would result in an increase in fees, the Chief Operating Officer stated that the government had provided a grant to facilitate additional work required to regain assurance, however, it was not clear whether this would be enough or additional funds would be required. The Director, Grant Thornton added that there was a balance between the work to be undertaken and cost implications and that would be considered as required. It was requested that the Committee be updated whether this would involve a streamlining of audit processes and the Chief Operating Officer undertook to update the Committee on any changes to works undertaken due to costs.

Lessons learned – in response to a question what lessons had been learned from this year’s audit for the future, the Chief Operating Officer reflected on the need for the Council to have more data available regarding financial transactions as standard. In addition, as previously stated a review of the alignment of the service would be undertaken to increase resilience in the corporate finance team.

Sample size – the Committee discussed the sample size required to regain assurance, and it was noted that as reassurance was regained the required sample size would reduce.

Decision:

The Committee noted the updated Audit Progress Report including the proposed audit deliverables to be presented to a future meeting of this Committee.