The Head of Finance gave a report on the Statement of Accounts 2020/21 and advised that although it had been a difficult year, the draft accounts had been presented by the 31 July 2021 deadline.  Auditors now faced difficulties with new stricter legislation and regulations which place more pressure on Local Authorities Finance Teams to produce accounts on time, and the problems that the auditing industry now face with high turnovers of Auditing staff.  Following the report of the National Audit Office 2020, these issues were now being addressed with key audit guidance for Audit Committee’s and incentives for audit recruitment.

He reported that on 25 August 2021 the working group worked through the accounts in detail to review the annual statement of accounts, to approve the statutory statement of accounts and to consider the external auditors’ report.  It was requested by Members that minutes of meetings should be produced and circulated quickly after the meeting and not withheld until just prior to the Audit Committee meeting.

The Head of Finance thanked Grant Thornton for all their hard work in auditing the 2020/21 accounts throughout a difficult year.

The Chairman welcomed Paul Cuttle and Samantha Morgan from the Council’s External Auditors, Grant Thornton, to the meeting.  Paul explained their conclusions when considering the audit findings and advised Members that all their substantive work had now been completed.  He reported that once the capital expenditure notes had been agreed and the signed letter of representation was received, Grant Thornton would be in a position to issue an unqualified audit opinion.

He outlined some of the key judgements from the report.  These included the material uncertainty in relation to the valuation of certain assets and it was concluded that the audit opinion should include specific wording as an “Emphasis of Matter” paragraph within their audit opinion.

He gave a brief report on the other audit risks that had been identified in which tests had been carried out and conclusions provided.  In particular, amendments had been made to the draft financial statements for the valuation of the Burlington Mews Properties and its accounting treatment which resulted in significant changes to the draft financial statements published in July 2021.  Other surplus assets also required some amendments.

He also advised that extensive audit work was carried out on the 2020/21 Covid grants due to its various conditions and the accounts were therefore adjusted.

A question was raised regarding the Grant Thornton fees and the Grant Thornton representative gave a breakdown of the 2019/20 and 2020/21 fees.  It was confirmed that the fees would be discussed in more detail at the next meeting.

The Chairman asked the Head of Finance and Paul Cuttle if the accounts would be published by the 30 November 2022 deadline and it was confirmed that this deadline was unlikely to be met due to the constraints on resources due to the ‘knock-on’ effect of the previous year’s delay.  The Head of Finance advised that the auditors would be working on site this year which would benefit the completion of the audit.  The Chairman was concerned that audits were now taking longer and hope the situation would ease in the future.

          Resolved:  That

a)    Following completion of the 2020/21 audit, delegated authority be given to the Deputy Chief Executive and the Chief Officer Finance and Trading and the Chairman of the Audit Committee to sign the Statement of Accounts 2020/21; and

b)    Following completion of the 2020/21 audit, the Letter of Representation be approved.