Agenda item

The Chief Accountant for the Council, Barry Stratfull, presented the report to the Committee.  It was noted that it had not yet been possible to finalise the 2020/21 accounts.  Consequently, the Committee were receiving an update on the current position of the closing of the accounts.

Significant progress has been made on the accounts since the last meeting of the committee and only a small number of minor items remained outstanding. The main area of delay related to the Collection Fund.  Once these issues had been resolved a revised set of statements would be brought to Committee along with the final audit report for approval.

Michelle Hopton from the Council’s external auditor Deloitte provided further information on the progress that had been made and the outstanding issues that needed to be resolved.  The main issues included:

Collection Fund Testing

Due to a change in the Council’s Revenues and Benefits system it was not possible to provide additional audit evidence being requested by Deloitte. Alternative methods as to how the evidence could be supplied were currently being explored which would provide the assurance required. It was noted that the detailed breakdown of evidence being sought by Deloitte had not been requested in the past.  However, the evidence was needed as Covid had had a significant impact on the balances and movements in the Collection Fund and had made the usual analytical review less reliable.

It was noted that the Council was now out of contract with the former supplier of the Revenues and Benefits system and therefore it was not possible to go back to them to request the required data irrespective of costs.

The Committee had continuing concerns regarding the external audit process and the delays that are preventing the accounts being completed.  A specific concern was raised regarding the lack of dialogue with Deloitte about the evidence they would require for the audit and whether the change of system would impact on its provision. It was accepted that there should have been more dialogue with Deloitte during the new system implementation to make sure all necessary reports were obtained. It was noted that the 2019/20 accounts had been signed off since the new system had been installed without having to provide the additional evidence. However, it was agreed that additional questions would be asked of Deloitte when changing key systems in the future. 

Unadjusted Misstatements

Deloitte’s update report requested that the Committee ask management to correct identified unadjusted misstatements as required by the ISAs (UK).  However, it was noted that this was only an update report and it may be preferrable to defer this discussion until a final report has been provided.  It was confirmed that the misstatements were not material to the audit or the statement of accounts and therefore consideration should be given as to whether the adjustments were necessary. Deloitte confirmed that if the adjustments were not made it would not prevent an unqualified audit opinion from being given.

In response to Members questions, the Committee was advise that:

·         it was the intention that the accounts would be finalised as soon as the Collection Fund issue was resolved but every avenue to was being explored in order to obtain a clean set of accounts for 2020/21. Currently, it was difficult to say with confidence when this would be possible.

·         it would only take a short time to provide a qualified audit opinion if this was deemed necessary.  However, both the Council and Deloitte would still like to explore all avenues for providing a clean set of accounts before taking this step.

·         the Committee would be advised of progress on the external audit in advance of the next committee meeting.

R E S O L V E D – that the current position with regard to the Statement of Account 2020/21 be noted and confirm the deferment of the proposed audit adjustments (as set out at pages 24 and 25 of the agenda pack).