The Chief Finance Officer/ S151 introduced the report.

Members queried what risk does it open the Council up to if the 2020/21 Audit receives a disclaimed opinion. The Chief Finance Officer/ S151 stated that under normal circumstances, a set of recommendations are provided to work through so you can get an assured opinion next time. As a lot of Local Authority’s Audits are outstanding, the Chief Finance Officer confirmed that she did not see that it would be an issue.

The Co-opted Member Jasdip Singh queried if the sales valuations have been received as this could help the Audit receive full assurance. The Chief Finance Officer/ S151 responded that they have assigned values to assets, some of the bigger assets such as the solar farms involve a very complex valuation process. External experts could be instructed to complete this but it could cost up to £500,000. As some of the challenges are continuing the valuation would have to be prepared based on a number of assumptions, this could potentially mean spending a lot of money for not much value. Where the assets have been sold, the sale value is being used. Conversations will be taking place with the new Auditors once they have started to see if this is acceptable.

The Co-opted Member Jasdip Singh queried if there will there be additional costs in year 1 due to the handover to the new external auditors Ernst Young.

The Chief Finance Officer/ S151 stated that external audit fees have increased significantly over the last few years. The challenge is to get the audit processed within the budget envelope we have.

The Co-opted Member Jasdip Singh queried how likely it is that the 2023/24 accounts will receive full assurance. The Chief Finance Officer/ S151 stated that it may not as the accounts will include the previous year, it may take a few years until full assurance is received. The Chief Finance Officer/ S151 responded that no auditor will make a clean opinion if the previous year did not receive full assurance. The new auditors may do things differently, so the Council want to start the conversation with Ernst Young now.

The Co-opted Member Jasdip Singh queried if the Finance team have sufficient resources to support the external audit. The Chief Finance Officer/ S151 confirmed that they did and it was a priority that the work is completed.

Members queried when the current external auditors BDO will finish and the new auditors start. The Chief Finance Officer/ S151 confirmed that BDO will finish at the end of September. The Council are pushing for BDO to complete the 2020-21 set of accounts with the disclaimed opinion. Local Authority accounts are provided every year and therefore this work is a business-as-usual process for the finance team. External Auditors are however asking more and more questions.

Members queried that the external audit of the 2020-21 accounts have taken 3 years. The Chief Finance Officer/ S151 confirmed that the statements of accounts were provided by the Council on time and are provided every year, it is the external audit process which has taken this time.

Members queried if any objections to the accounts have been received.  The Chief Finance Officer/ S151 confirmed one objection has been received and they are waiting to receive confirmation if it will be withdrawn. The Chief Finance Officer/ S151 was unable to provide further details at this stage but once she has received an update from BDO she will update the Committee.

RESOLVED: -

1.1      The Audit Committee noted and commented on the position for the outstanding external audits of the Council’s statement of accounts covering 2020/21, 2021/22 and 2022/23.