Agenda and minutes

In accordance with the Council's Code of Conduct, Councillors are reminded that it is a requirement to declare interests where appropriate.

The following disclosure of interest was made:

To approve as a correct record the minutes of the Audit Committee held on 3 December 2024.

The minutes of the meeting of the Audit Committee held on 3 December 2024 were approved as a correct record and signed by the Chair.

To answer any questions asked by the public which relate to an item on this agenda and which are in line with the Council’s Constitution.

Public Question Time will be concluded by the Chair when all questions have been answered or on the expiry of a period of 15 minutes, whichever is the earlier.

No questions were asked by members of the public.

To consider report FIN/687 submitted by Ernst and Young (to follow).

RECOMMENDATION:

That the Completion Report for those Charged with Governance for year ended 31 March 2024 be noted

The Committee considered report FIN/687 which had been submitted by Ernst and Young (EY), the Council’s External Auditors.  The report summarised the status of EY’s audit for 2023/24.  The report confirmed that EY had found no risks of significant weakness in the Council’s arrangements.

The Committee was informed that, although EY had commenced with planning the audit ahead of the 2023/24 backstop date, they had not obtained sufficient evidence to be able to conclude that the financial statements were free from material and pervasive misstatements.  EY therefore anticipated issuing a disclaimed audit opinion.  The Committee noted that the rationale for the disclaimer, and the scope of the audit, were contained within the report.

The Committee considered the report and in response to queries raised, the Committee:

• Noted that both the Council’s Finance Team and EY had resourcing issues which had impacted the ability to complete all necessary arrangements required to support an audit opinion.  That had been further impacted by the imposed backstop date of 28 February 2025 for the 2023/24 Statement of Accounts (“the Accounts”) (of which the Council had received limited notice) which had given little time since the backstop date of 13 December 2024 for the previous 2022/23 Accounts.
• Was advised that the audit of the 2024/25 Accounts was already underway, the Council’s Finance team were fully staffed and would receive relevant training from EY.  It was therefore acknowledged that both parties were in a better position to complete the audit of the 2024/25 Accounts.
• Was informed that training on policies relating to conflicts of interest was undertaken by newly elected Councillors and newly appointed officers.  All Councillors were invited to attend annual training sessions and both Councillors and officers had access to the Monitoring Officer, Deputy Monitoring Officer and Democratic Services team should they have queries relating to those matters.  The Partner for EY agreed to review the issue relating to conflict of interest training as the report stated training was undertaken regularly.
• Noted that the National Audit Office had not yet issued the group instructions for 2023/24 and as such EY’s opinion had been issues without it, and the audit had been closed.
• Acknowledged that EY could not provide assurance ratings for the areas identified in Appendix H to the report and therefore it would be issuing a disclaimed opinion on the Accounts.
• Was informed that the procedures and guidance produced by the Financial Reporting Council regarding disclaimed opinions and how to re-build assurance over coming years indicated that the Council was not alone in experiencing issues in auditing its Accounts.
• Acknowledged EY’s recommendations regarding the Council’s level of reserves.

Whilst the matter more specifically related to the next item on the agenda (Approval of the 2024/2024 Statement of Accounts), a Committee Member raised a query on some figures included in Section 7 of the Accounts.  Following that query, the Chief Accountant acknowledged there was a typographical error in the figures relating to “Debt Interest Payments” referred to in the first table set out on  ...  view the full minutes text for item 4.

To consider report FIN/688 of the Head of Corporate Finance (Appendix C to the report is to follow).

The Committee considered report FIN/688 of the Head of Corporate Finance which sought the Committee’s approval of the 2023/24 Statement of Accounts (“the Accounts”) on the basis of the disclaimed audit opinion issued by EY, the Council’s External Auditors.  The Committee noted that the Letter of Representation had been published separately in the supplementary agenda.

The Head of Corporate Finance advised that a briefing session on the Accounts had recently been held for Councillors and the presentation slides had been made available to all-Councillors in the Councillors’ Information Bulletin as well as the Independent Member to the Audit Committee.

A recent ruling of a Virgin Media / O2 case was brought to the Committee’s attention by the Independent Member to the Committee, and it was queried whether an assessment had been done to ascertain whether that ruling would impact the Council’s pensions fund.  As the Head of Corporate Finance had not been advised otherwise, they assumed the Council was compliant.  They agreed to obtain a response from the Council’s Pensions Actuary with regard to the matter and provide a response to the Committee via email.  The Partner for EY did not believe the ruling was applicable to the Council but agreed to review the matter.

Following queries from the Committee:

• It was advised that the asset held for sale on the Balance Sheet as at 31 March 2024 (page 30 of the Agenda Pack) was part of a development scheme which was still on going and had not, as yet, been sold.  It was acknowledged that the matter would be revisited at the end of the current financial year.
• It was confirmed that the asset reclassification figure referred to in Section 17 (Intangible Assets) of the Accounts related to the correction of assets which had initially been classified wrongly.  The Chief Accountant agreed to obtain specific information regarding the nature of that asset and its initial classification and provide that information to the Committee via email.
• The nature of the “cash in hand” value identified in Section 22 (Cash and Cash Equivalents) of the Accounts was confirmed.
• The Head of Corporate Finance agreed to ascertain why the income share referred to in Section 30 (Agency Services) had reduced between 2022/23 and 2023/24.  A response would then be provided to the Committee via email.
• It was clarified that, where more than one occurrence of a Chief Officer’s salary was referred to in Section 32 (Officers’ Remuneration), those indicated an in-year change of postholder.
• The Chief Accountant agreed to ascertain why the local government pension fund transactions had not been referred to in Section 35 (Related Party) of the Accounts.  A response would then be provided to the Committee via email.
• The Chief Accountant agreed to ascertain whether transactions with other Councils should be categorised as related party transactions.  A response would then be provided to the Committee via email.
• It was advised that the figure provided for the “interest on the effect of the Asset ceiling”, referred to in the Transactions  ...  view the full minutes text for item 5.