To agree the Minutes of the meeting of the Audit Committee held on 9 July 2024, as a correct record.

Resolved: That the Minutes of the Audit Committee held on 9 July 2024, be approved and signed by the Chairman as a correct record.

Any declarations of interest not already registered.

There were none.

Members noted the completed action.

There were none.

Members received training from Parris Williams from Grant Thornton on the role of External Audit which covered the framework for external audit, scope and role of external audit work, financial statements, value for money, audit committee effectiveness and how external audit works with the committee.

Members took the opportunity to ask questions.

Resolved: That

a)       the Member training be noted, and

b)       the next Member training session cover internal audit and whistleblowing.

The Chairman welcomed Paul Cuttle, Engagement Lead who presented the conclusion of the audit for 2021/22 and 2022/23 letter to those charged with governance on the application of the Local Authority Backstop, and the Auditor’s Annual Report 2022/23. He advised that disclaimer opinions for both 2021/22 and 2022/23 audits would be issued. He advised that the audits were split into two parts, the financial statements audits and the value for money which was communicated via the annual report. The 2021/22 value for money report had been previously provided and appendix B covered the 2022/23 value for money report.

He advised that it was important to remember the context of local government but in their view, with the arrangements the council had in place, were in a better position than others to deal with some of the significant challenges. Commentary was provided around financial sustainability, financial performance and planning, and the governance and procurements arrangements.

Members discussed the report and raised questions of clarification regarding the backstop and impact of disclaimer opinions, value for money, assurances and context. Members were reminded that the value for money work was a separate team to the financial statement audits team and Members were reassured that the council was in a good position to build up assurances as there were accounts, albeit unaudited statements.  Members discussed the four improvement recommendations as set out in the report.

Resolved: That the appendices be noted.

The Head of Finance presented the report which get out the financial statements of the Council for 2021/22, with the accounts being published on 31 July 2022. A Member working group met on 24 January 2023 to review and discuss the accounts in detail. The accounts had not been audited and in line with the backstop arrangements, this year fell under the backstop date of 13 December 2024. The committee were requested to approve the statement of account and letter of representation.

Resolved: That the

a)     Statement of Accounts 2021/22 be approved, and signed; and

b)     Letter of representation (appendix B), be approved and signed.

The Head of Finance presented the report which set out the financial statements of the Council for 2022/23, with the accounts being published on 31 July 2022. A Member working group met on 20 September 2023 to review and discuss the accounts in detail. The accounts had not been audited and in line with the backstop arrangements, this year fell under the backstop date of 13 December 2024. The committee were requested to approve the statement of account and letter of representation.

Resolved: That the

a)     Statement of Accounts 2022/23 be approved, and signed; and

b)     Letter of representation (appendix B), be approved and signed.

Parris Williams (Engagement Lead from 2023/24) for Grant Thornton presented their Annual Audit Plan for 2023/24 which had been updated since the last Audit Committee, having completed their initial risk assessment for value for money. Grant Thornton’s progress and sector update was included at Appendix B of the report. He highlighted to Members that the key elements of the report included value for money, where one risk of significant weakness had been identified around the effectiveness of procurement and contract management arrangements, which had been initially highlighted by Internal Audit’s limited assurance report. Members were advised that this would be looked into more detail, and that the final report would be presented in February 2025.

Members discussed the report, and asked questions. Members were advised that risks to the financial statements were considered. Areas of indicative significant risk were considered, such as the investment properties and valuation of investment properties. Members were advised that no potential significant weaknesses around financial sustainability had been identified.  

Resolved: That the appendices be noted.

The Audit Manager presented the Internal Audit progress report which updated Members that since the last Committee, four audits had been completed, one of which received a substantial assurance, and two received reasonable assurance. The fourth audit did receive limited assurance, and although it had not yet gone through the formal follow up process, several actions were already being addressed.

Members were advised that one vacancy had been successfully recruited to with an experienced auditor and work was ongoing with Dartford and Sevenoaks to recruit to the other vacancies. In order to address the resource shortfall, some IT audits would be outsourced and a memorandum of understanding with Bexley and Mid Kent Audit Partnership was in place to provide assurance over the Licensing Partnership.

It was also highlighted to Members that work was being undertaken to implement a new audit management system which would support officers in being able to track and monitor their own actions. She was also pleased to advise that the percentage of budgeted days was starting to reduce which was fantastic news and the average time taken between the draft report and final report was also being reduced.

Members discussed the report and Members were reassured that in relation to the procurement and contract management audit recommendations, progress had been made and that a procurement update report would be presented to FIAC in January.

Resolved: That the report be noted.  

The Audit Manager presented the most recent version of the Strategic Risk Register. The Audit Committee was required to maintain oversight of risk management and operations, that was last presented in April 2024. Since then, the register had been refreshed to reflect the risks associated with achievement of the new council plan and the format had been redesigned.

Members were advised that Appendix A mapped the strategic risks identified to the council’s priorities as shown in the Council Plan, along with potential future risks which may need to be added to the register at a later date. The current scores of each strategic risk were shown and provided for later quarterly scores to be detailed, allowing the committee to monitor changes in scores and identify those risks which sat outside of either the Council’s risk appetite or risk tolerance.

There was one risk where it was not within appetite, but the outcome of a consultation was required before actions could be put in place.

Members considered the risk register and praised the new presentation of the strategic risk register. Discussion took place on the different risks detailed in the report, further information was requested regarding the refugee resettlement and asylum dispersal scheme and its impact.

Action: for Chief Officer People & Places to advise what the impact is on the district for the refugee resettlement and asylum dispersal scheme

Resolved: that the report be noted.

Members noted that due to the external audit backstop date, the January meeting would be moved to the 18February 2025, and therefore the March meeting would be moved to 10 April 2025.

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