Jonathan Wilson introduced the report that detailed the progress of the audit for 2020/21 financial statements. The audit field work was largely complete. However, a significant proportion of work remained subject to the review processes from senior team members. This review process had been delayed by the absence of a key team member. This audit delay remained consistent with the wider national position and central government had written to the council to set out proposed actions to address delays to the completion of local authority audits. Further action was being taken by CIPFA to reduce the level of audit work required in subsequent years.

Rachel Brittain, from BDO, apologised to Members for not presenting the completion report to the committee this evening which had been the intention but due to the unexpected absence had not been able to get to that position. A number of factors needed to be considered not only being able to replace that individual quickly but a balance between the efficiency point as well. That conversations were being held with her team and would report back to Jonathan Wilson on what the best way forward would be for the council. Some good progress had been made in a number of areas and not a long way off from where they needed to be but focus was on the crucial review period. A higher level of review queries had been addressed as a result of remote working and had been very evident this year. That work would continue with Jonathan Wilson to agree a timeline to deliver the audit.

Councillor Kent referred to the objection to the accounts which had previously been received and questioned why this had not been mentioned in the report to which Rachel Brittain stated the objection was linked to some of the audit work that had to be undertaken so once this had been completed and review she could then look to finalise the objection and go through that review process as well.

Councillor Collins referred to page 118, paragraph 3.3 of the report, and questioned whether the business practices were going to change by going back to working in the office. Rachel Brittain stated that now the restrictions had been lifted changes had been made to the way they would work with one day in the week the team would work together in the office which was a step forward. BDO would be happy to come to the council offices and undertake work there but was also mindful how the council had changed the ways that they worked. With next year looking to be more hybrid working with a couple of days in the office with the finance team and then a couple of days working with the team in their office to ensure a better balance.

Councillor Ononaji referred to page 117, paragraph 2.1 of the report, and questioned whether it was the absence of this one member of staff was the reason the report had been delayed. He questioned why there was not a back-up or an alternative plan that could have been put in place. Rachel Brittain stated that the teams were organised in a hierarchy structure, with more people doing the work and then the review processes would be undertaken and then she would do the final reviews. The engagement team worked alongside the client and got to know the team, they currently did not have teams that mixed in terms of doing different work and resources would have been allocated to audits so would not have people to step in at short notice. That recruitment was an option but as stated in the report the public sector external audit market was really struggling and there was not a big pool of people that could be called in to cover. Councillor Ononaji stated that practices needed to be reviewed and that one absent member of staff should not paralyse the whole audit as this was not good practice. Rachel Brittain stated the issue had been unclear as to how long that member of staff was going to be off work and there was little efficiency to bring in someone new into the team if that person was going to return. Rachel Brittain reassured Members that there would be a Plan B in place.

Councillor Snell referred to Appendix 3 and questioned how confident were they that the audit deadline had been extended to the 30 November 2022 to which Rachel Brittain stated at this stage she was not confident that this date could be met or not but would obviously do everything possible to meet that deadline to which Councillor Snell stated this was not particularly encouraging.

Councillor Snell agreed with Councillor Ononaji comments that work needed to be decompartmentalised with a more different and modern way of working approach.

Charles Clarke questioned whether there was a completion date for the 2020/21 audits to which Rachel Brittain stated she would work on a plan and discuss with Jonathan Wilson but at this stage was unable to provide a date as she would need to identify a resource to come in and work through the file and make sure they had everything they needed. 

Councillor Kent stated her disappointment in the situation that we were currently in and had concerns on what would happen if there was no end date in sight for this year and for next years and questioned what this would have on the stability and robustness of the council’s finances. Councillor Kent also had concerns that if the government did not change the audit process in the future what this would mean to the robustness of the authority’s finances.

Jonathan Wilson stated the council had met the deadline last year, one of the very few who had. It had been an unfortunate position this year with one member of staff absent, who would have had so much knowledge at this stage of the audit and to be lost at such a critical point it would have been very hard to replace. Jonathan Wilson shared the concerns of members and believed they had not set a reasonable deadline for next year and should have moved it back further. Highlighted there had been some benefits of working and interacting remotely and working from the office in dealing with queries and needed to maximise both to get the audit work complete.

Members were informed that they would be kept updated throughout the whole process as things changed and this may be done outside as well as inside the committee.

RESOLVED

That the Standards and Audit Committee note the progress of the external auditors in completing the audit of 2020/21 financial statements.