Agenda item

Peter Barber (Grant Thornton) presented the report giving his opinion on VFM and the pension fund.  He discussed the materiality figure, the focus on risk, the progress report including fees and charges, the valuation of land and building assets which was significant in BANES and the focus on investments.  He explained that the timeline had been influenced by COVID meaning the audit would not be completed by the statutory deadline of end of September.  It had been hoped to sign off the accounts in October and now it was planned for early December. 

There had been more progress with the pension fund but that was also behind schedule.  Peter Barber was confident this was nearer conclusion.

He added that this was a national issue and importantly there had been nothing material found from the work undertaken so far on the accounts.

The following issues were raised during questions:

·  There will be no direct consequence of the late sign-off, the auditors are required to provide the Council with the reasons for the delay so it can publish a “Notice of Delay to Audited Accounts” statement on its website, confirming why the audit had not concluded by the 30^th September deadline.

·  BANES property was not like that of a private organisation as there was not the necessity to sell year on year. 

·  The new VFM Code was bigger and resulted in more work and there was a need to recruit which had been successful in part

·  As regards the audit plan there was a timetable and certain things triggered delay.  There was a timed budget with the allocation of jobs and the focus was on greatest risk

·  Liam Royle, newly appointed as Audit lead, would be focussing on land and buildings

·  In relation to the council, the focus was less on the issue about it being a ‘going concern’ and more about the ability to meet its financial responsibilities and the need to be risk aware

Peter Barber explained that VFM covered three areas – financial sustainability, governance and the 3 Es, economy, efficiency and effectiveness.  The following points were raised:

·  Each area within the plan had sub-criteria – where the Council was, areas that needed improvement or refinement and significant areas of concern

·  To deliver the certification for VFM the external auditors had to report on each item to the National Audit Office

·  It was a requirement under the Code of Practice to comment and  give details on each area

·  If there was a delay with either signing-off or VFM, it would be completed as soon as possible and there was external review by the regulators

·  It was important to know how the delay in signing-off the accounts fitted in with the national picture, a large number of Councils would be in the same position due to resourcing pressures being experienced by external audit firms.

·  BANES Head of Financial Management confirmed that the delay could add extra pressure on BANES officers, given competing demands as we move into the Council’s budget setting period.

·  The Section 151 Officer explained that forward planning was vital and ultimately there were deadlines to meet, however officers could bring forward other work to cover the audit later

·  It was acknowledged that the Cabinet member needed to be kept aware of the situation

·  There was a risk of needing extra resources if it was delayed later

·  It was noted that officers were under significant pressure

·  A further status update from Grant Thornton to the Chair of the Audit Committee was requested by 31^st October 2021 covering progress made in meeting the plan to complete the audit in time for the December Audit Committee meeting

·  The extra fee charged for VFM was required as a result of more work required by the new code

The Chair explained that the Council had been asked by the Public Sector Audit Appointments (PSAA) whether they wished to opt in or out of the national arrangement for the procurement of external audit.  The independent member explained that there were specific requirements for the Councils to procure external audit themselves if Councils moved away from using the PSAA national arrangements, but there was more flexibility with opportunities for new partners with smaller companies.  There was also the Redman report (June 2020) which reviewed the arrangements for local authority audits and presented recommendations, including some smaller companies having been assessed and accredited.  The independent member’s view would be sought and the Section 151 Officer would discuss with other local authorities.  He advised the timescale for this was 8-12 weeks.

RESOLVED

1)  That the update report be noted;

2)  to identify further related issues that may require resources or additional input for the external audit, to ensure it was completed on time and that the Cabinet member be kept informed of the criticality of resources for the audit and budget in the limited timeframe; and

3)  that the Committee be kept informed of the situation as regards to opting in or out of the national arrangement for the procurement of external audit.