Agenda item

To authorise the Director of Finance, in consultation with the Chair or Vice-Chair of the Audit and Risk Assurance Committee (ARAC), to agree any changes which may be necessary in order to ensure the finalisation of the external audit currently being concluded by the Council’s external auditors, Grant Thornton, to ensure completion of the Statement of Accounts for financial year 2020/21.

The draft accounts for 2021 were presented to the Committee for approval in line with International Financial Reporting Standards. Delays in preparing older accounts had resulted in the Statement of Accounts being delayed for approval due to knock-on effects. Limited resources meant that slippage had occurred against original deadlines.

           Members were minded of a particular recommendation set out in the report that sought authorisation for the Director of Finance, in consultation with the Chair or Vice-Chair of the Audit and Risk Assurance Committee (ARAC), to agree any changes which may be necessary in order to ensure the finalisation of the external audit being concluded by the Council’s external auditors, Grant Thornton, to ensure completion of the Statement of Accounts for financial year 2020/21.

Additional resources had been obtained to help assist however, the lack of an asset management system had caused issues and further delays. Officers were hopeful that an asset management system would be in place towards the end of 2023.

Members were reminded that all of the Council’s primary statements were needed to obtain a full picture of the Council’s financial position. The movement in reserves statements reconciled income and expenditure to what the actual tax pay and costs position was. This adjustment reconciled the actual outturn position to a surplus of £11m.

Auditors from Grant Thornton addressed the Committee with the following highlights:-

·      Concerns were had around falling too far behind due to the complexity of the accounts;

·      Significant errors were present within the financial statements which had caused a back-log in work;

·      The Council’s usable reserves increased once audit changes were taken into account

·      The Audit was substantially complete with just a little more work around the PSI scheme with Serco.

·      Several issues appeared when reviewing creditors and accruals. Several budget holders had been accruing to the budget rather than actual expenditure; issues around prepayments were also noted.

·      A weakness was present in property records and changes had been made to the way that property had been valued although auditors were confident that this was accounted for in the 2021 financial statements.

·      Total corrections resulted in reduction in overdraft and Grant Thornton were now happy with the overall accounts for 2020-2021.

In response to questions, officers confirmed that, in relation to the Serco contract, a PFI model was used instead of PPP. This was due to legacy decisions that were originally decided in 2010 to which the Council was contractually bound.

A new structure was in place and existing staff members were being upskilled. Interim resources had been sourced to help with the backlog however, good technical accountants were hard to recruit. Officers and Grant Thornton were thanked for the hard work in preparing the statement of accounts given the difficult legacy issues faced in the process.

Agreed that that the Director of Finance b authorised, in consultation with the Chair or Vice-Chair of the Audit and Risk Assurance Committee (ARAC), to agree any changes which may be necessary in order to ensure the finalisation of the external audit currently being concluded by the Council’s external auditors, Grant Thornton, to ensure completion of the Statement of Accounts for financial year 2020/21.