Agenda item

Report of Grant Thornton (external auditors)

Before introducing her report, Alex Walling of Grant Thornton (AW) advised Members that although signing off the Audit Findings Report for 2021-22 was late, this was a national issue and CBC was in a better position than many other councils.  She highlighted the following points:

-       the report brings together the accounts work done on 2021-22, and local authorities are required to consider the report, in particular the unadjusted misstatements, before approving the accounts and approving and signing the letter of representation;

-       there had been some adjustment to the financial statements since publication, currently standing at £1.777m to the council’s comprehensive income and expenditure account .  The adjustments have arisen from plant and equipment revaluation and pension figures;

-       the work is substantially complete – awaiting revised pension figure from Cheltenham Borough Homes (CBH) and receipt of the management letter – and an unmodified opinion is anticipated.  This is positive and reflects well on the finance team;

-       under the Code of Audit Practice, auditors also have to do a value for money commentary, and as this work is still outstanding for 2021-22 and 2022-23, a joint commentary is proposed, considering the two years in isolation but bringing them together in one report.  This work has started, and an interim report should be ready by Christmas, focussing on three areas – financial stability, governance, and economy, efficiency and effectiveness;

-       the external auditor also has a statutory duty to highlight any areas of concern, or to issue any objections or public interest report, but has nothing to report for 2021-22 – another positive;

-       once all the audit work is complete, the auditors issue a certificate to close the audit year, but this cannot be done until the value for money work is done;

-       one ‘significant matter’ noted by the auditors was that the submitted draft accounts were incomplete, but this was due to the finance team waiting for third party information. This information has now been received;

-       another significant matter was the delays in getting information from the valuer – having three valuation experts is unusual for a district council, but this is due to the nature of some of the entities CBC is working with;

-       the issue of housing stock revaluation was also raised which was to have been an unadjusted misstatement in the accounts, but the council has now made the adjustment and this is reflected in the accounts.

In response to Members’ questions, AW confirmed that:

-       with regard to the MRP, the auditors are not wholly happy with what the council is doing, but has seen nothing to suggest it is ultra vires or would have a material effect on the accounts.  The government is due to issue additional guidance and changes to regulations around MRP;

-       Gloucestershire Airport has now provided the additional information required.

The Executive Director for Finance, Assets and Regeneration said that, regarding the revised government guidance, input from a number of consultees including the external audit sector and local authorities, has been taken on board, but regardless of any new regulations, the council has found a pragmatic solution to get its accounts signed off.  The Director of Finance and Assets said that when the committee gets the Audit Findings Report for the 2022-23 account it will see all the actions signed off.

No vote was required.  The report was noted.