Suresh Patel, Ernst and Young (EY), presented a report updating Members on the progress on the external audit. He said the audit had been slowed by the concurrent audit of the pension fund, which EY were also responsible for. The financial effects of COVID-19 meant that it was difficult to estimate the value of the fund. There had also been some difficulty obtaining historic pensions data.
Nazeer Mohammed, EY, gave a status update on the audit, saying there had been some progress since the submission of the report, such as the conclusion of property valuations. There was still outstanding data regarding pensions and from banks.
Members were advised there were also still some internal processes which EY needed to complete. There had been some differences identified by the audit and two main changes had been made. Firstly, the Council’s pension liability had been reduced by £1.9 million. Secondly, an overvaluation of £1.1 million of the income from Jackson Square Car Park had been corrected. The audit had also analysed if the Council had spent efficiently and achieved value for money. Key capital programmes had been scrutinised and no concerns were raised.
Suresh Patel said that EY would include an ‘emphasis of matter’ paragraph regarding the uncertainty around the valuation of property. However, he did not foresee that this would also apply to the ‘Going concern’ section of the audit, although this decision was yet to be confirmed.
Councillor Alder asked if EY could give any indication of how much the property valuations were likely to reduce.
Suresh Patel said this was difficult to say as the value of different types of property would be affected to various extents. For example, retail property would likely be hardest hit.
Councillor Corpe asked about the external audit fee consultation, which had been considered at the previous meeting, and whether a decision on this had been received.
Suresh Patel said that the Public Sector Audit Appointments (PSAA) had not yet decided whether the scale fee for the audit should be changed.
The Chairman asked whether the Council should have expected the banks to return the necessary confirmations by now. He also asked how common it was for an ‘emphasis of matter’ to be included in audits of local authorities. He also said that he noted with interest the audit’s comment on the importance of the governance and risk management operations.
Suresh Patel said that the bank returns had only recently been requested but were expected soon. He had not previously included an ‘emphasis of matter’ in the audit of any local authority, but due to COVID-19, a number of Council’s audits this year included such a reference. Members could be assured that the Council was therefore not the only local authority in this position.
The Chairman mentioned the potential need for the Committee to sign off the Statement of Accounts after the audit had been concluded, and asked when this was likely to be.
Suresh Patel said he foresaw that the audit could potentially be completed by mid-October.
The Interim Head of Strategic Finance and Property confirmed this date would be after his departure, however, most of the work on the Statement of Accounts had been completed and he did not foresee that the handover should cause a problem for the incoming Head of Strategic Finance and Property.
RESOLVED – that the report be noted.