Agenda item

The committee considered an update report on the Council’s ongoing external audits. Officers informed the committee that:

·      Significant progress had been made with the 2021/22 audit. It was close to conclusion with only two outstanding queries. 

·      A backstop date of 13^th December 2024 had been confirmed in respect of the 2022/23 external audit. Conversations were ongoing to confirm the minimum requirements needed to comply with the audit requirements for that year.

·      Field work was expected to start on the 2023/24 external audit in October.  Conversations were ongoing with Grant Thornton regarding concerns with the audit, including the short amount of time to complete the audit before the 2023/24 backstop date in February 2025.

·      Officers were due to have further conversations with Public Sector Audit Appointments Limited (‘PSAA’) in respect of the £80,000 fee reduction that they had proposed in respect of the 2019/20 and 2020/21 audit fees. Officers were of the view the reduction should have been higher.

·      Deloitte’s fee variation for the 2021/22 audit was approximately £161,000.  Officers confirmed that these fees were also going to be challenged via the PSAA.

In response to questions from Councillors, Officers confirmed the following points.

2021/22 Audit

·         The Council had completed all tasks required to finalise the 2021/22 audit. Deloitte still needed to review the updated 2021/22 Annual Governance Statement. A number of additional control findings and immaterial misstatements had been identified. An updated ISA260 would be presented at the next committee to explain these. Officers would also prepare a report to set out if any of these findings had a General Fund or budgetary impact and how the issues would be avoided in the future.

Audit Fees and Fee Variations

·         Deloitte received payment via a scale fee set by PSAA.  Any amounts which go beyond the scale fee are put forward as fee variations. 

·         The scale fees for the next round of audits was significantly higher than the current level. The scale fee for audits up to 2022/23 was £36,000 and fee variations are expected where additional work is requested by the Financial Reporting Council or control findings or errors are queried by the auditors. Some of Deloitte’s fee variations are claimed to have been incurred due to the actions of the Council and negotiations about these amounts are ongoing with PSAA.

·         The timing of receiving notifications of the 2019/20 audit fee variations from Deloitte was a key issue being discussed with PSAA. There had been a 15 month interlude between signing the statement of accounts and the Council receiving the fee variation. The Council viewed this as an unacceptable delay.

·         Fee variations for 2020/21 were received sooner but still after the conclusion of the audit.

·         Fee variations for the 2021/22 had been received during the course of the audit and would be challenged via PSAA before coming to the committee for approval.

·         Deloitte confirmed that the final set of fee variations for the 2021/22 audit would be presented to PSAA within the next few weeks as they wanted to agree fees before the backstop date.

Audits and accounts for 2022/23 onwards

·         It was the intention to publish the 2022/23 accounts by the end of the month and the 2023/24 accounts by the end of October.

·         An audit plan for 2022/23 had been received from Deloitte. It was the intention for it to be a disclaimed audit opinion as there was not enough time to complete a full audit before the backstop date being imposed by central government. Officers needed time to review the scope of the plan before circulating it to committee. 

·         No fee had been given for the 2022/23 audit as PSAA had not set out their approach for dealing with audits impacted by an enforced backstop date. The Section 151 Officer would be discussing this and associated issues with PSAA in the next few weeks. The audit plan, along with any additional information received from PSAA would be circulated to the committee.

·         Any agreement for the audit plan for 2022/23 would be dealt with under urgency provisions in consultation with Group Leaders and the Chair and Vice Chair of the committee.

R E S O L V E D – that the committee note the progress in dealing with external audit matters for 2019/20 through to 2023/24.