40 Local Audit in England - Backlog Update PDF 241 KB
This report provides Audit & Governance Committee with an update on the action taken to tackle the local audit backlog in England by the Ministry of Housing, Communities & Local Government via a letter on 30 July 2024 and then a further update letter on 20 September 2024.
Action proposed includes laying secondary legislation to provide for an initial backstop date of 13 December 2024 for financial years (FYs) up to and including 2022/23 and five subsequent backstop dates for 2023/24 through to 2027/28 as detailed in the letter.
Government has now laid in Parliament two pieces of legislation which would give effect to the proposals: the Accounts and Audit (Amendment) Regulations 2024 and, on behalf of the Comptroller & Auditor General of the National Audit Office (NAO), a draft Code of Audit Practice 2024.
As reported by Grant Thorton in March, the backstop arrangement will apply to the BCP Council 2022/23 accounts. The outcome and the technical requirements of the backstop arrangement will be reported to the Audit & Governance Committee ‘extra’ meeting on the 28 November 2024.
The deadline for the publication of audited accounts for financial year 2023/24 will be 28 February 2025 to coincide with the second backstop. The Regulations also amend the date by which bodies should publish draft (unaudited) accounts to 30 June for financial years 2024/25 – 2027/28.
Additional documents:
Minutes:
The Chief Financial Officer presented 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 report provided an update on the action taken to tackle the local audit backlog in England by the Ministry of Housing, Communities & Local Government, as set out in letters dated 30 July and 20 September 2024 (Appendix A and B of the report). As a result of legislation effecting these proposals, the main points to note were the respective backstop date deadlines of 13 December 2024 for local authority audits up to 2022/23 and 28 February 2025 for 2023/24.
Peter Barber for Grant Thornton, the External Auditor, confirmed the proposed approach for applying the backstop to BCP Council’s accounts as detailed in his letter of 7 October 2024 (Appendix C). The key outputs in relation to the 2022/23 accounts together with an update on the progress for 2023/24 would be reported to the next meeting on 28 November ahead of the December backstop date. The Committee agreed to move its 16 January 2025 meeting to a later date in the month (provisionally 27 January) to meet the optimum timescale recommended by the External Auditor to fit in with the February 2025 backstop date.
Committee members sought assurance on the potential impact of the backstop arrangements on future audits. Mr Barber explained the main issues involved for the recovery period from 2023/24 onwards, including the impact of issuing a disclaimer. It was noted that work on the audit for 2023/24 was well progressed and that the Committee received regular updates. It was noted that difficulties could arise should any backstop arrangements need to be applied for future years. Members noted that the audit backlog was a national issue with some other councils in a worse position than BCP.
Assurance was also sought that the delay caused by the failure of Deloittes, Dorset Pension Fund’s previous auditor, to issue an IAS19 letter of assurance, would not be repeated. The External Auditor reported that he was confident that the letter of assurance pursued would be provided in a timely manner. It was noted that Grant Thornton had now taken on the accounts of Dorset Council and Pension Fund. The Chief Financial Officer confirmed that he had made a formal complaint to Deloittes regarding the impact of the delay and was pursuing a response.
Members were assured that work to provide the information required to meet the backstop deadlines was being met within internal resources.
RESOLVED that the Committee notes the action taken to tackle the local audit backlog in England by the Ministry of Housing, Communities & Local Government as detailed in Appendix A and further updated in Appendix B.