Agenda item

Report of the Corporate Director for Finance and Resources, and of the External Auditor.

Andrew Smith and Helen Lillington, representing the Council’s external auditor’s Grant Thornton, presented a report which provided the Committee with the external auditor’s Audit Findings Report 2019/20 and external audit update. The following information was highlighted:

a)  This report represents the findings from a backstopped audit. At a national level there have been proposals to backstop audits in order to reset and stabilise the system. Following discussions with the Council after further work was identified as being needed to the revised 2019/20 accounts, it was agreed that the best course of action would be to backstop the audit. As a result, a disclaimer opinion would be issued. There were however a number of issues in which assurance would not have been able to have been provided, and thus a disclaimer opinion would have been issued in any case.

b)  There have been ten adjustments to the draft accounts in total. In addition, there have been twenty four recommendations made following the work that has been done.

c)  Grant Thornton will need a final set of signed and dated set of accounts from the Council, and in addition a signed representation letter. The representation letter, however, needs to refer to the backstop legislation and this is yet to be passed by Parliament. Grant Thorton will share the letter as soon as the legislation has been passed, and the Audit Committee will need to make arrangements to approve it.

d)  Although Value for Money work has been previously reported, it was highlighted that significant issues surrounding financial sustainability and company governance arrangements were identified, with a lack of sufficient arrangements in place during 2019/20 to secure best value.

e)  In December 2019 Grant Thornton had issued a formal recommendation to the Council in relation to Robin Hood Energy.

The following points were raised in discussion:

f)  Management responses to the Audit Findings Report were due to be considered by the Committee at its next meeting.

g)  The Chair highlighted that the report should be considered in the context of an historical document, and since then a great deal of improvement work had been done. The Committee, however, would seek assurance that the issues identified have now been rectified and resolved.

h)  The Committee sought assurance on what was in place to ensure that asset valuations were stored correctly. The Corporate Director of Finance and Resources provided the assurance that the Council had the necessary systems and processes in place that allows an accurate articulation of all the Council’s assets and their associated valuations. The valuation queries raised by the external auditor in the report have been addressed in full.

Resolved:

1)  To note the Audit Findings Report 2019/20 set out in Appendix 1 from Grant Thornton, and its recommendations, as part of the Committee’s consideration for approval of the Statement of Accounts 2019/20.

2)  To take assurance that management responses from the Council to the recommendations made in the Audit Findings Report 2019/20 will be presented to a future Audit Committee meeting.