Agenda item

The External Auditor presented an update on their work and progress towards auditing the Council’s Accounts for 2021/22.  He informed Members that with regard to the national issue of infrastructure, that as expected, CIPFA had issued an override which came into effect on Christmas Day 2022.

He explained that the company was still struggling to finalise the accounts for 2021/22 due to staff sickness, the need for more resources and an inability to recruit.  The intention now was to bring the accounts to the March Committee.

He provided an update on the Avon Pension Fund audit for 2021/22.  He highlighted 2 further agreed adjustments to the draft 2021/22 to statements in respect of Note 23 – Nature and extent of risks arising from financial standing and asked for these to be minuted.  Specifically, within the interest risk disclosure the impact of a 1% movement in rates had been incorrectly recorded and in the credit risk disclosure the value of investments held within one credit rating banding had been missed out.  Both these points were corrected in the final version of the financial statements.  The External Auditor explained that neither of these adjustments impact on any of the primary statements and are purely disclosure in nature.

During discussion the following points were clarified:

·  With regard to £232m land and buildings and £257m investment properties in the balance sheet, the External Auditor explained that BANES had significant fixed assets, with a larger investment property holding than most other local authorities, which resulted in more work for the auditors;

·  With respect to Council undertaking borrowing to invest in investment assets, the External Auditor highlighted there was a need to be risk aware but if managed correctly with due diligence this was satisfactory;

·  The material land and building adjustment highlighted in the “Valuation of land and buildings and Investment Properties” section (Page 24) and the material adjustment referred to in the “Financial Statements” section (Page 22) were the same thing and not separate issues.  There had been an adjustment in the current and previous year, both above materiality;

·  Concern was raised about the further delay in the accounts being ready for sign-off, nearly 12 months on from the accounting period, and this should be put in writing.  It was highlighted that with elections being held in May there was the possibility of changes to Audit Committee membership, along with a period of purdah in the run up to the elections.  This affected the Committee’s ability to be effective in scrutinising the 2021/22 accounts;

·  BANES was not alone as there were other local authorities in a similar position of not having their accounts signed off;

·  The Section 151 Officer explained the governance threshold for Whole of Government Accounts (WGA) returns has been lowered to accept unaudited returns by 31^st March 2023.  If sign-off of the accounts slipped into April there was some capacity though resources should be focussed on budget setting for 2024/25;

·  The implications of the delay for the next 12 months on the audit cycle, should also be referred to in the letter.

On a motion from Councillor Elliott, seconded by Councillor Furse it was

RESOLVED

1)  to note the update report and current position with regards to the Council’s audit of its Accounts for 2021/22; and

2)  that the Chair of the Committee, liaising with the Section 151 Officer, write to the external auditors Grant Thornton to voice concern about the further delay with the audit of the Council’s accounts for 2021/22.