Agenda item

Audit progress report and sector updates

Report of Grant Thornton


Alex Walling of Grant Thornton began by apologising that the draft report had been circulated in error, but said it was 99% the same as the final version.  She gave a brief summary, highlighting the following matters:

-       progress on the 21-22 audit wasn’t as far forward as she would have liked, due to receiving the group accounts late and to resource constraints.   She hoped to focus on if from July onwards, but needed to have completed 99% on the work on it before starting the 22-23 audit;

-       with value-for-money report for 21-22 outstanding, the plan was now to do one commentary covering two financial years, as was allowed under the cote of audit practice;

-       on the certification of claims and returns, housing benefit subsidy work was underway and would hopefully be completed by the end of the month;

-       the review of the pooling of housing capital receipts return was due to start in May and would be discussed with the finance team;

-       Grant Thornton and the finance team were meeting regularly to keep them informed.


In response to a Member’s question, the Director of Finance and Assets confirmed that the full audit fees for 2022-23 were yet to be agreed, as in previous years.  The scale fee was determined by the PSAA, with variations to that dependent on the level of work needed in different areas – for example value-for-money work,  remote working, and infrastructure assets last year.  This doesn’t constitute a risk from a budgetary perspective, but the fee needs to be agreed by the deadline of 31 May, as an audit fee note will be part of the draft accounts.


Alex Walling confirmed that the PSAA sets a scale several years in advance and when additional items are added, the scale fee is adjusted accordingly.  The proposed fees are agreed at the planning stage, and were shared with the committee as part of the audit plan, but as the audit gets underway, Grant Thornton will give an opinion about any additional fees or unforeseen complexities, which is sent to the PSAA and then back to committee for full transparency.


In response to further Member questions, she said that:

-       it would not be possible to add an extra column to the table showing which accounts were published within six months of the target date over the last six years, as that information was held by the PSAA, not by Grant Thornton;

-       the council was required to publish its draft accounts by 31 May this year, but these can be amended up to the point where Grant Thornton gives its opinion.  The final accounts cannot be amended.


The Director of Finance and Assets added that the draft accounts on the website for 2021-22 are the most up-to-date version, with any changes between their publication last July and today incorporated.  There are changes for different reasons at different states; for example, recent changes in the economy resulted in the valuation of the pension fund and pension fund liability and assets moving materially, and this would be added.


In response to a further question, Alex Walling confirmed that:

-       the ongoing delays in the publication of local authority audit reports arose from the perfect storm of lack of resource and increasingly complex audits.  Conversations on how this could be simplified were ongoing, with the regulator’s expectation currently too great and focussing on big estimates - property, plant, equipment and pension figures - rather than what effects the man in the street.  Being in a constant spotlight from the regulator puts people off and makes recruiting more difficult; it is frustrating for auditors not to be able to finish an audit.


The Chair raised the following matters:

-       he liked the idea that key stakeholders needed to continue their efforts to secure improvements through effective engagement and good practice, suggesting that if the council wants to consider strategic planning, commercial awareness, contract management, for example, it may be that more meetings are needed as the complexity increases. The issues need to be owned and discussed in a forum or committee – or maybe one committee needed to consider how the different issues were being managed;

-       regarding sustainability and climate change, a 2022 CIPFA article suggested that the finance profession would need to collect data from different professions to understand and challenge assumptions and projections, with a call from the government for urgent action.  He suggested that reporting on climate change should be incorporated in the work plan for this committee or for Overview and Scrutiny.  The Director of Finance and Assets said the challenge was for officers to think about the council’s carbon footprint and continue to use assurance mechanisms to report against the climate change pathway.  Members agreed that they cannot be proactive, just be able to demonstrate that the council is on a pathway to net zero and hold people to account as to whether they are doing enough.


The Assistant Director of SWAP reminded Members that the internal audit process now included a strategic climate audit, looking at how officers were meeting the goals the CBC has in place.


No vote was required on this item.  The report was noted.       

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