Agenda item

The External Auditor provided a summary of the Annual Audit Letter for the year ended 31 March 2019 and noted that an unqualified audit report on the Council’s financial statements had been issued on 29 November 2019.

The External Auditor drew the Committee’s attention to the following error on page 9 of the report: the date under no issues identified with the balances brought over should be 1 April 2018 and not 1 April 2019.

The External Auditor said that the Council had updated its accounts to reflect the impact of national issues impacting all local authority pension schemes as well as to reflect changes in the value of investments.

With reference to the additional Audit Fees which would be charged to EHC, the External Auditor said that the proposal was with the PSAA for discussion and approval. The main reason for the increased fee reflected the additional testing which had been agreed with the Council; an additional 40 items had been tested.

In response to a question by the Chairman on future legislative issues to be aware of, the External Auditor referenced IFRS 16 leases; financial resilience arrangements introduced by the IASB Conceptual Framework for Financial Reporting; possible pensions actuarial issues; and future contributions to the tri-annual review.

With reference to the completion of the 2019/2020 audit, the External Auditor thanked Members for their understanding and patience on the possible delay in the completion. In a national context, a review commissioned by the government has meant that more complex accounts had to be submitted by local government authorities, which meant that the completion date of the end of July for the EHC audit was not viable. Furthermore, audit institutions across the UK were struggling with staff attrition and some 40% of audits were not completed on time. The end of September would be a more viable date for the completion of the EHC audit. Ultimately, giving the right assurance was the most important and the end of July was not a statutory deadline. Audits should not be driven by dates, and it was preferable not to reschedule at short notice. A planned and informed timeline should therefore be agreed between the Council and EY.

The Interim Head of Strategic Finance and Property said that it was a requirement that a statement be made on why the audit cannot be completed by the end of July. The Government expectation was that accounts should be audited and published by the end of July and that was still the preferred option. He would discuss the options with the External Auditor.

Councillor A Alder welcomed the explanation for the possible delay and stressed that a final date must be agreed and adhered to.

Councillor A Curtis said that the national context must be taken into account and the Council should not lapse into a culture of things not getting done.

The Chairman requested the External Auditor and the Interim Head of Strategic Finance and Property to discuss the completion date of the audit and keep committee members updated of progress via email between meetings.

Councillor A Alder moved and Councillor T Stowe seconded a motion that the External Auditor’s Annual Audit Letter for the year ended 31 March 2019 be noted.

After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED:  - that (A) the External Auditor’s Annual Audit Letter for the year ended 31 March 2019 be noted.

The Chairman thanked the External Auditor and the former Head of Strategic Finance and Property, Isabel Brittain, for their assistance in helping the Council to obtain an unqualified audit.