Agenda item

Report of Assistant Director of Finance (Section 151 Officer)

Purpose of report

To update the committee on developments in relation to the proposed audit backstop in relation to the 2022/23 statement of accounts, note the draft Letter of Representation, and to seek delegated authority to finalise the accounts with the auditors by the backstop date for 2022/23’s accounts.

Recommendations

The Accounts, Audit and Risk Committee resolves:

1.1           To note the updated dates proposed by the Ministry for Housing, Communities and Local Government for the audit backstop and the impact of this proposal on the external audit of the council’s financial statements.

1.2           To note the draft Letter of Representation for 2022/23 (Appendix 3)

1.3           To agree that, once the final audit opinion for 2022/23 is received, the Assistant Director Finance (S151 Officer), in consultation with the Chair of the Accounts, Audit and Risk Committee (or Deputy Chair in their absence), be authorised to make any further changes to the accounts agreed with the auditors and sign the accounts.  Any further changes will be brought to the Committee’s attention at its next meeting following the signing.

1.4           To agree that the Assistant Director of Finance, in consultation with the Chair of the Committee (or Deputy Chair in their absence), be authorised to make any further changes to the letter of representation agreed with the auditors that may arise during completion of the audit. Any further changes will be brought to the Committee’s attention at its next meeting following the signing.

Resolved

(1)  That the updated dates proposed by the Ministry for Housing, Communities and Local Government for the audit backstop and the impact of this proposal on the external audit of the council’s financial statements be noted.

(2)  That the draft Letter of Representation for 2022/23 (Appendix 3) be noted.

(3)  That the Assistant Director Finance (S151 Officer), in consultation with the Chair of the Accounts, Audit and Risk Committee (or Deputy Chair in their absence), be authorised to make any further changes to the accounts agreed with the auditors and sign the accounts and it be noted that any further changes would be brought to the Committee’s attention at its next meeting following the signing.

(4)  That the Assistant Director of Finance, in consultation with the Chair of the Committee (or Deputy Chair in their absence), be authorised to make any further changes to the letter of representation agreed with the auditors that may arise during completion of the audit and it be noted that any further changes would be brought to the Committee’s attention at its next meeting following the signing.

The Assistant Director of Finance (Section 151 Officer) submitted a report to update the Committee on developments in relation to the proposed audit backstop for the 2022/23 statement of accounts, to note the draft Letter of Representation, and to seek delegated authority to finalise the accounts with the auditors by the backstop date for the 2022/23 accounts. 

In introducing the report, the Portfolio Holder for Finance, Property and Regeneration explained that the previous Government had consulted on a series of backstop dates for the completion for local authorities to address an audit backlog. The new Government had confirmed that it would continue with these proposals. The audits of the council’s 2022/23 and 2023/24 statement of accounts would be required to be completed by 13 December 2024 and 28 February respectively.

The Committee was advised that the council’s External Auditors for 2022/23, Ernst and Young, had indicated that they would issue a disclaimer opinion for the 2022-23 Statement of Accounts. The Head of Finance advised this did not affect the value for money commentary work which had been completed and will be reported on alongside the audit opinion.

It was expected that the council’s new external auditors, Bishop Fleming, would issue a disclaimer opinion on the 2023/24 Statement of Accounts as a result of the disclaimer on the 2022/23 accounts. Bishop Fleming would not have the assurance over the opening balances in the 2023/24 statement of accounts that they normally would following an unqualified opinion for the previous year. The Head of Finance explained that it was likely the auditors would review selected balances rather than all opening balances. This was an issue that was being addressed by various regulatory bodies in the sector with a view to simplifying the audit process for Local Authorities. The Head of Finance advised that the Council was doing its best to attain an unqualified opinion as soon as possible.

In response to Members’ questions regarding the impact of Government changes to the way certain types of assets were accounted for and how this may have affected the delays to audits in the sector, the Head of Finance advised that this was not the main cause of the delays. The Committee were advised that other factors such as the level of detail that external auditors were required to undertake along with issues of recruitment were more significant factors. 

Resolved

(1)  That the updated dates proposed by the Ministry for Housing, Communities and Local Government for the audit backstop and the impact of this proposal on the external audit of the council’s financial statements be noted.

(2)  That the draft Letter of Representation for 2022/23 be noted.

(3)  That the Assistant Director Finance (S151 Officer), in consultation with the Chair of the Accounts, Audit and Risk Committee (or Deputy Chair in their absence), be authorised to make any further changes to the accounts agreed with the auditors and sign the accounts and it be noted that any further changes would be brought to the Committee’s attention at its next meeting following the signing.

(4)  That the Assistant Director of Finance, in consultation with the Chair of the Committee (or Deputy Chair in their absence), be authorised to make any further changes to the letter of representation agreed with the auditors that may arise during completion of the audit and it be noted that any further changes would be brought to the Committee’s attention at its next meeting following the signing.