Agenda item

To consider a report from the External Auditor on the External Audit Interim VFM Report for 2021/22 and 2022/23.

Councillor Butikofer asked about the national shortage of external auditors that had caused delays to external audits being undertaken and completed at a number of local authorities across the country.

The External Auditor confirmed that there had been a reset in the national Audit market which had resulted in resource constraints leading to delays in the number of Audits that had been undertaken.

Councillor Penfold asked in respect of the external situation whether the delays in getting the Council’s accounts completed for 2012/22 and 2022/23 were an outlier or not.

The External Auditor confirmed that there were other local authorities in the same position and that the significant number of authorities that had been affected had resulted in the resetting of the Audit market.

Councillor Bütikofer asked whether the Council’s staff shortages in the finance department remained and would result in delays in the future.

The Director of Resources (DoR) advised that the Council had employed an interim officer in post who was very experienced in the closure of accounts. The 2020/21 accounts were signed off, the 2021/22 completed and work was ongoing on the 2022/23 accounts, and it was anticipated that the officer would remain until the 2023/24 accounts has been signed off in December.

The DoR added that the Chief Technical Accountant post had been filled by an ex-Auditor from Ernst and Young and would commence work with the Council on July 1st. This made the team fully resourced.

The DoR stated that there would not be an audit of the two outstanding years but an audit of the opening balances to ensure that they are accurate.

Councillor Cushing asked that, bearing in mind that the current financial projections were based on the non-signed off accounts, what element of risk was there from those figures when external audit looked at them.

The DoR advised that the biggest risk was on the opening balances and around the collection fund that was heavily impacted by Covid and the effect of that is only just finishing. The collection fund was millions of pounds so the level of the risk in the estimates would be a small percentage of that, but it could be £1m out in deficit or surplus.

Councillor Cushing asked if the work being completed in November would have an effect of the assessment of the Council’s budget position for 2025/26 and whether as a result the council would need to find additional savings at short notice.

The DoR advised that the council had to submit National Non-Domestic Rates forms to the government which gave a very good picture of where the council was at the year end and for the forthcoming year. The Council had sought to reduce the overall risk as far as possible by using external expertise. The Council did not have major investments or trading activity that would require substantial adjustments and they were not an overly complex set of accounts which would also reduce the risk.

Councillor Penfold asked if the delays had caused a knock-on effect on the production of the 2023/24 accounts.

The DoR stated that with the staffing arrangements it was expected that the Council would have a set of accounts in the next month or two in advance of the October audit.

Councillor Boyle commented that the Council was in a far better position than this time last year and the department should be thanked for their work in getting the Council into an improved situation.

Councillor Butifoker stated that the Council was reviewing its procurement strategy and training would be available once it was completed.

Resolved – that the report be noted.