Sean Clark, Director of Finance and IT, reported on the Thurrock Annual Audit Letter 2018/19 and highlighted the responsibilities of the external auditors. With the Letter summarising the work and conclusions alongside the wider areas of work completed. Members were referred to the Appendix report. Sean Clark stated that the content of the Letter had been largely reported on at the July 2019 Standard and Audit Committee as part of the Audit Results Report which confirmed:

•           The Council received an unmodified audit opinion on the 2018/19 financial statements.

•           The Council received an unmodified value for money conclusion.

•           The Annual Government Statement was consistent with external audit’s knowledge of the Council.

Sean Clark stated that work had been undertaken with the External Auditors and a modified version of Accounts and Value for Money Statement had been produced. Members were informed that the funds in reserve had not changed.

Lisa Clampin, Binder Dijke Otte (BDO), stated the Letter had summarised the key issues arising from the work that had been undertaken in respect of the year ended 31 March 2019 and took Members through the Financial Statements, Final Materiality, the four Material Misstatements and Unadjusted Audit Differences stated in the report. Members were informed that the Audit Certificate could not be issued until they had completed the review of the Whole of Government Accounts return.

Lisa Clampin recognised the efforts of both sides and was grateful to the Finance Team for their support through the process and that a de-brief session between both parties would be organised.

Councillor Rice queried the Pension Liability Valuation with the liability that this could increase by £5 million. Lisa Clampin stated that this money had already been accounted for and Sean Clark stating that there was some uncertainty if it would be £4.7 as this figure had been based on assumptions.

Councillor Rice questioned whether an explanation should be added to the report that was available on the website. Sean Clark agreed to take that away as an action point.

Councillor Johnson questioned why the 12 unadjusted audit differences had been mentioned when the Council had already agreed not to adjust. Lisa Clampin responded by stating that the report had to report everything to highlight those issues adjusted and that some of those 12 unadjustments had been quite high. Under regulations these findings had to be reported but the external auditors had concurred with the views of the Council to not amend the accounts.

Councillor Collins questioned when the dead line would be for the certificate to be issued and what would happen if this was not met. Sean Clark stated that the 31 July had been set by Government and there would be no significant consequences for not meeting this and explained that Thurrock Council would not be the only Council in this position as many Councils had a changes of auditors that impacted on meeting this deadline.

Councillor Pothecary asked for clarification from the External Auditor regarding the materiality level of £6.3 million and that the Council had no obligation to adjust them. Lisa Clampin stated that this figure had been based on materiality levels but stated that Thurrock would be out by £1.9 million for the financial year 2018/19.

Councillor Pothecary questioned the misstatements and the additional fees incurred and asked what measures would be in place going forward. Lisa Clampin stated that this would form part of the de-brief with the Finance Team and could have been due to the different opinions of auditors and different approaches but lessons would be learned where applicable.

RESOLVED:

That the Standards and Audit Committee considered the comments of our external auditors as set out in the attached report and noted their findings.