Verbal update to be provided on the current status of the Annual Accounts sign-off.
Minutes:
The Chief Technical Accountant provided a verbal update on the status of the annual accounts sign-off and informed Members that no further work had been completed by the external auditors. It was noted that opportunities to progress the audit had been missed in August, and with little further contact from EY, it looked as though opportunities to complete the audit in September would also be missed. Members were informed that the Committee could either wait until the December meeting to sign-off the annual accounts, subject to completion of the audit, or grant the Chairman delegated authority in conjunction with the Section 151 Officer, to sign-off the accounts as soon as the audit was complete. The Chairman proposed that he and the Section 151 Officer be given delegated authority to sign-off the annual accounts once audited. The proposal was seconded by Cllr J Toye. The Chief Technical Accountant informed Members that she would update them on the status of the accounts sign-off as and when necessary.
The Chairman asked whether not signing annual accounts had any effect on the Council’s status or any financial impact, and whether the Council had already paid the external auditors. The Chief Technical Accountant replied that the external auditors had been paid, as this was a contractual requirement. In terms of financial impact, Member were in informed that the Council could not be reimbursed for expenditure by Central Government, which necessitated borrowing and caused a loss of investment income. The Chairman asked whether the delay was still due a disagreement between EY and NNDC on the treatment of the Council’s investments. The Chief Technical Accountant suggested that this was likely an excuse, as the work could be completed without the final sign-off. She added that the reason for the delay was more likely resourcing issues at EY.
In response to a question from Cllr J Stenton, it was confirmed that the Chief Technical Accountant had not been permitted to view the Council’s external audit contract by the PSAA, and could not therefore claim compensation for the delay. The Chief Technical added that she expected that the performance indicators outlined in the contract were likely based on audit quality, therefore delays would be inconsequential. Cllr J Stenton asked if next year’s invoice for the external audit service could be disputed, to which it was suggested that this would be difficult without reviewing the contract.
Cllr S Penfold asked whether any indication of timescale could be given for the external auditors to complete the audit, to which the Chief Technical Accountant replied that no formal date had been set. It was suggested that a worst case scenario would result in the accounts being signed off after October. Cllr N Pearce asked whether there would be a domino effect for next year’s audit as a result of the delay. The Chief Technical Accountant replied that she had raised the issue with EY, and efforts were being made to recruit staff to avoid reoccurrence. She added that it was possible that the audit timeframe might revert back to the previous 30th September deadline, though this was not guaranteed. Cllr N Pearce asked what legal recourse the Council had, to which the Chief Technical Accountant replied that little was available as EY had a legitimate excuse to explain the delay.
RESOLVED
That the Chairman of the Audit Committee and the Section 151 Officer be given delegated authority to sign-off the Annual Statement of Accounts once the external audit is complete.