Agenda item

Report of the Executive Director of Resources and Governance

The Executive Director of Resources & Governance submitted a report (previously circulated) to present a report by the Council’s external auditors, Ernst and Young LLP (EY) on the audit for the year ended 31 March 2023.

It was reported that; In accordance with the Accounts and Audit (Amendment) Regulations 2023, all Local Authorities were required to produce the draft annual Statement of Accounts by 31 May 2023 and an audited set published by 30 September 2023. As it had been previously outlined to this Committee, that due to national issues which led to a delay finalising the 2021/22 accounts and the subsequent delay commencing the 2022/23 accounts, EY were not in a position to deliver the audit by the statutory deadline.

The report explained that the backlog in the publication of audited accounts had reached an unacceptable level nationally, with the number of outstanding opinions as at the 30th of September 2023 standing at 918. In a bid to provide a solution the Accounts and Audit (Amendment) regulations 2024 provide for statutory backstop dates to help clear the backlog of audit and rebuild assurance. The first statutory ‘backstop’ date is to be the 13th of December, and it applied to all outstanding audits up to and including the 2022/23 accounts.

It was stated that following the completion of the 2021/22 accounts in April 2024 the Council offered their full support and additional resources to try and fully complete the 2022/23 audit before the backstop date. EY did not have the capacity or the resources available to schedule the 2022/23 audit, therefore they have not been able to complete a full audit, this had led EY to issue a disclaimer of opinion for the 2022/23 accounts.

The report clarified that EY are expected to; give a disclaimed opinion on the Council’s 2022/23 accounts, to report that they have not identified any significant weaknesses in arrangements to secure value for money in its resources, and to confirm that the Council’s Annual Governance Statement is not misleading or inconsistent with other information known to them.

Members wanted to understand what caused the delay with accounts, and whether any other local authorities were in the same position. Members asked Auditors EY what they had looked at in terms of value for money to give an understanding of what is left to be considered.

Members of the Committee were concerned about whether financial  statements would be correct as a full audit had not been completed, and any potential impacts of not having a full audit on the Councils budget. Officers explained that they were confident with the figures included in the statement of accounts and the backstop arrangements allow auditors to rebuild assurance.

RESOLVED -

a)      The Auditor’s Completion Report for Those Charged With Governance for the Council’s 2022/23 financial statements be noted.

b)      Members note and approve the Letter of Representation in Appendix A of the Completion Report for Those Charged With Governance.

c)      The Audit Committee agrees not to amend the unadjusted audit differences as they are not material.

d)      The Audit Committee is requested to note (and subsequently approve when the audit is complete) the attached IFRS compliant Statement of Accounts at Annex 2 for the 2022/23 financial year.