Agenda item
EXTERNAL AUDIT - ANNUAL REPORT - 2021/22 & 2022/23
Minutes:
Jon Roberts (Grant Thornton External Auditor) presented the report and explained that the report covered two periods 2021/22 & 2022/23. He stated auditors follow the NAO (National Audit Office) framework which sets out practice and guidance with a narrative, commentary and observations. He explained the hierarchy of findings which included the statutory recommendations - of which there were none; the key recommendations – which included the DSG and its recovery plan under the safety valve programme; and 15 improvement recommendations – that provided a narrative of the opportunities to improve in line with best practice.
In relation to risk assessments, there were two set out and one was upheld – the arrangements for managing the DSG recovery plan - and the other had no significant weakness. It was a positive report and it was hoped that the scrutiny was appreciated.
The following points were made during questions:
· Councillor Lucy Hodge – were links to other Committees were being picked up. In respect of financial sustainability, the Business Change Hub had been reported to scrutiny (page 262);
· further detail would be appreciated in the Reserves table;
· the majority of movement was the Covid reserves which were down, though the Council had protection against unplanned shocks;
· the Section 151 Officer reported that reserve balances were up and some of this related to grants. If grants were not spent then money would be returned to the government;
· the section 25 statement went to all directors for horizon scanning, looking at demand pressures to ensure that enough reserves were held in case of unplanned risk;
· the Head of Financial Management confirmed that £12.5m was the target level of unearmarked reserves, although the year end balance could fluctuate as it includes carry forward of revenue underspends;
· Councillor George Leach – the financial statement audit goes through the reserves in detail;
· Councillor David Biddleston – every year the earmarked reserves are reappraised looking at the long-term and the balance. If not used they can be released;
· Councillor Lucy Hodge – it would be helpful for Members to see the Corporate Risk Register;
· Aequus would be addressing other groups including the political groups and the external auditors would report on progress in the future;
· Councillor Malcolm Treby – in respect of conclusions from any actions that weren’t followed up, the recommendations were tracked and there was an option to raise an issue (page 24-25);
· Councillor Malcolm Treby – page 266 management would brief the Committee on the response to the confidential item;
· the Director – One West would report to the Committee regarding contract waivers and why these were needed;
· Councillor David Biddleston – the Committee role was to be a critical friend and there was a recovery plan and safety valve for the DSG. A number of other Councils had the same issue. This period the external auditors had done a ‘deep dive’ to ensure previous concerns were addressed;
· Councillor Lucy Hodge – governance – the Section 151 Officer stated that there was a Capital Strategy Group who looked at governance, best practice and management of the capital programme.
RESOLVED to note the Annual Report including the VFM conclusions and the recommendations arising.
Supporting documents:
- 08 External Audit Annual Report 21-22, 22-23, item 35. PDF 71 KB
- App 1 Auditors Annual Report, item 35. PDF 1 MB