To agree the Minutes of the meeting of the Audit Committee held on 3 December 2024, as a correct record

Resolved: That the minutes of the meeting held 3 December 2024 be approved, and signed by the Chairman as a correct record.

Any declarations of interest not already registered.

There were none.

There were none.

There were none.

Members received training on the role of internal audit and took the opportunity to ask questions.  Members discussed future topics of areas of training.

            Resolved: That the Member development be noted.

Members considered the report the report which set out Grant Thornton’s, (the Council’s external auditors,) Auditor’s Annual Report 2023/24 and the Audit Findings Report 2023/24 for Members’ consideration. Parris Williams, the Engagement Lead advised that around 45% of all English Local Authorities received a disclaimed opinion for 2022/23 and the percentage was expected to be similar for 2023/24. As a result of no substantive audit work being completed for 2022/23, it was unfortunate that as a result no assurance was brought forward on the opening balances, and this had been communicated throughout the audit plan. There was still a lot of value in the work that they could complete for the current year with the aim being to audit transactions in year and closing balances as part of a suite of work to rebuild assurances. The key messages and themes emerging from the work and nationally were that the absence of annual audit routine had led to a deterioration in the quality of the financial statements, internal control weaknesses and thirdly, in some authorities poor decision making, which was not applicable to the Council.

The Engagement Lead highlighted several issues that emerged from the work undertaken and detailed the factors which had hindered the audit completion. Despite the challenges, commended the Finances Team’s cooperation and responsiveness.

The Chief Finance Officer advised that senior management had acknowledged the disappointing report but as Members had previously been advised there were a number of contributing factors which made the audit more challenging than previous years. They were actively working on improvements and putting relevant steps in place. 

Members considered the report, expressing their concern at the largely negative audit findings. In response to questions, were advised that in terms of financial sustainability the plans at the Council were robust and they did not have concerns regarding financial sustainability. Work was ongoing with Management, as well as sharing best practice and working through key issues. For now, Members were advised that the number of samples would remain high. Members discussed the  fixed asset register and housing benefit system and due to its timings it presented a challenge and external audit were not able to conclude on whether the design and implementation was effective and this would be included in planning next year.  Members also discussed the staffing challenges which had faced the finance team. Further discussion took place on debtors and creditors, reserves  and investment properties. Members were advised by the Engagement Lead that they did not have any concerns with the balances but rather it was difficult to audit. A consistency check was a recommendation as a control deficiency that would need to be done as part of the financial reporting process to ensure that figures within the financial statements from different areas were reconciled.

The Committee was addressed by Jason Granger the author of the value for money annual report ending on 31 March 2024. The work was directed by the National Audit Code of audit practice what required Grant Thornton to  ...  view the full minutes text for item 32.

The Head of Finance presented the report which covered the financial statements for 2023/24 financial year. The accounts were published in June 2024 and were attached as Appendix A to the report. A Member working group met on 5 September 2024 to review and discuss the accounts in detail. The committee were requested to approve the statement of account and letter of representation.

Members asked questions of clarification regarding pension funds and reserves and for clarification around signing off of the accounts. Some Members expressed their concern at the accounts being disclaimed. In response to the concern and query raised, Members were advised that a disclaimer opinion did not detract from the Section 151’s responsibility that the accounts produced were true and fair, and only once they were approved and signed only then could the disclaimer opinion be given, due to external audit running out of time to complete all the work ahead of the Government imposed backstop date. If the disclaimer opinion was not given by the backstop date, then serious answers would have to be given to Ministry of Housing Communities and Local Government as to why that had not happened.

Resolved: That

a)               the Statement of Accounts 2023/24 be approved and signed (Appendix A).

b)               the letter of representation (Appendix B) be approved and signed.

The Internal Audit Manager presented the report which updated Members since the last Committee in December 2024. At the time of publication no further audits had been completed, but the Audit Manager was pleased to verbally update Members that the Council Tax bill audit had been completed since publication of the update report. The report detailed how the rest of the audit plan was going to be completed, which included external support following the successful procurement exercise. Performance indicators and implementation follow ups had also improved.

Members considered the report and asked questions of clarification regarding the procurement of the contract for delivery of audits on the 2024/25 audit plan and assurances that the contractors would be following the Global Internal Audit Standards would be the same as Sevenoaks’.

Resolved: That the report be noted.  

The work plan was noted with the next meeting taking place on 10 April 2025, and the following items:

Internal Audit Progress report

Internal Audit Plan proposal

Strategic Risk Register

Member Development on Whistle blowing.

Resolved: That, under section 100A(4) of the Local Government Act 1972, the public be excluded from the meeting on the grounds that likely disclosure of exempt information is involved as defined by  Schedule 12A, paragraph 7 (Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime); and by Schedule 12A, paragraph 2 (Information which is likely to reveal the identity of an individual.)

The Internal Audit Manager presented the exempted report and appendix, which detailed the investigation into fraud within the Housing Benefit team. There was no direct loss of finances to the Council. The report also detailed several control improvements which had been implemented by the team to reduce the possibility of a fraud being committed by another member of staff in the same way.

Members discussed the exempted report, and asked questions of clarification.

Resolved: That the Housing Benefit Report be noted.