Agenda item

The External Auditor submits a report to the Audit and Risk Committee on progress in delivering responsibilities as external auditors.

Committee Members are recommended to note the report and make any comments if required to the Deputy Director of Finance and External Auditors.  

The External Auditor submitted a report to the Audit and Risk Committee for noting, on progress in delivering responsibilities as external auditors.

Grant Patterson, External Auditor, presented the report on progress and brought to Members’ attention finalisation of the 2021 audit of the statement of accounts. The following points were highlighted:

·         Members were reminded that at the end of September 2021, the detailed Audit Findings Report was reported to the Committee, which included outstanding matters and some works in progress and an unqualified opinion was anticipated on the financial statements. A final version of the Audit Findings Report had been provided to management on 15 October 2021 with signed audit opinion, and it was confirmed an unqualified opinion was issued.

·         Final changes in the accounts were summarised in the report as:

o   Four adjusted misstatements, none of which resulted in an adjustment to the Council’s Comprehensive Income and Expenditure Statement, nor impacted on the Council’s usable reserves.

o   Four unadjusted misstatements which management did not adjust for on the grounds of materiality.

o   The errors were considered immaterial both individually and in aggregate, with the next impact of an increase of Property, Plant and Equipment by £1.0m had the adjustments been made.

·         The 2020/21 Value for Money work was in progress and was close to completion, with a draft report to be provided before Christmas, then to be finalised in the new year.

·         For the certification of grant claims, External Auditors were on track.

·         Audit of the Housing Benefits Subsidy claim was fairly well progressed with the deadline for completion at the end of January 2022.

·         In relation to the annual Pooling of Housing Capital Receipts, auditors were in the process of sharing letters of engagement with the Council.

·         It was noted the City Council had purchased the CFO Insights tool from Grant Thornton.   This was an annual subscription of £12,500 for three years.  This was being reported for information and to provide assurance this was within the ethical standards.

·         The FRC reported in October 2021 on their inspections of auditors work in the public sector, and the findings were summarised in the report. It was confirmed nine of Grant Thornton’s audits were inspected in 2021. 70% were graded as good, and the independent reviewers were satisfied with the auditor’s progress and quality of work. External Auditors hoped the report gave the Audit and Risk Committee Members confidence into the external auditors work.

Councillor Dr. Moore commended the statement made on page 16, “As Auditors we have had to show compassion to NHS staff deeply affected by the crisis”, which she applauded and said it was refreshing to see the statement, in what was largely a financial report, had human interest which affected external audit actions.

Members brought to the attention of the meeting an email from an external organisation raising the point that Leicester City Council audits had not been signed off. Officers noted the point and informed the meeting that a statement was placed on the website following publication of the accounts by the due date, and that they had been audited. Officers had responded swiftly to the email, but would discuss with the City Mayor and Communications Team the consideration of further publicity in future years.  It was noted that delays in external audits were a national problem for number of reason including the availability of resources in the audit sector, and guidance being released late, amongst other things. Members were informed a financial update that would cover these issues would be brought to the next meeting of Audit and Risk Committee.

It was further noted the whole of government accounts were yet to be complete, as they were yet to be issued by the Treasury.

Members were informed the Council was in the fortunate position of having had its accounts signed off before many other authorities.

Grant Patterson put into context that accounts had to be published by September 2021 and the external auditors had issued an opinion in mid-October. He added that it was widely publicised that there were challenges in both quality and amount of work to be done amidst a pandemic, in a field that had resource issues. They would continue to monitor the situation, but there were no issues to report with the Council’s accounts, and that external auditors continued to work well with good support from the Council’s Finance Team.

The Chair thanked the External Auditor and Finance Team, noting the difficulties to undertake audit work during the difficult times being experienced by everyone.

RESOLVED:

1.    That the Audit and Risk Committee note the report.

2.    Officers note the comments made by Members and discuss with the City Mayor and Communications Team further publicity on the publication of the Council’s audited accounts prior to be taken to Full Council.