Issue - meetings

The attached report sets out the findings of the Council’s external auditor, Grant Thornton, following their audit of the Council’s Statement of Accounts 2020/2021.

The Committee received a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

The Council’s external auditors, Grant Thornton, presented their ‘Value for Money’ audit of the Council’s Statement of Accounts 2020/2021 including their statutorily required assessment of whether the Council had in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

It was noted that the External Auditor’s audit of the Council’s financial statements still remained incomplete due to delays in receiving confirmations from the auditor of the Dorset Pension Fund and due to a national issue affecting all local authorities with material highway infrastructure.

The report set out the External Auditor’s conclusions across three audit headings.

In terms of ‘Financial Sustainability’ the report identified significant weaknesses in arrangements and made three key recommendations and one improvement recommendation.

There was no identified significant weakness in terms of ‘Governance’ although four improvement recommendations were made.

Additionally, significant weaknesses were identified under the ‘Improving economy, efficiency and effectiveness’ criteria and one key recommendation and five improvement recommendations were made.

A summary of all of the recommendations was provided for consideration by the Committee and there was debate and discussion about the important issues raised. There was also reference to concerns being raised by Ofsted in relation to delivery of the Council’s Children’s’ Services function.

The Auditor’s judgements were set out in support of and in relation to each of his recommendations accompanied by detailed commentary. In each case, the management response from the Council was also set out for the Committee’s consideration. There was particular focus on the use of an innovative financial strategy, the significant level of risk involved and upon the lack of any alternative fall-back strategies should they be needed.

The External Auditor was asked by some members of the Committee why he had not identified any significant weaknesses in the ‘Governance’ criteria where no key recommendations were made. The External Auditor explained that it was not his role to dictate what governance existed in the Council but rather to comment on whether he considered arrangements to be adequate and whether the Council had followed its’ own approved governance arrangements. He also reaffirmed that four improvement recommendations were made in this ‘Governance’ category 

The External Auditor responded to other detailed questions from Members and provided further clarity for the Committee.

RESOLVED

That the Audit and Governance Committee notes

a)    the delay to the completion of the audit of the financial statements; and

b)    the findings, recommendations and management comments of the Council’s External Auditor in relation to the Value for Money arrangements.