Agenda item

The attached report at Appendix A sets out the work that the Council’s External Auditor, Grant Thornton, plans to undertake for the audit of the Council’s Statement of Accounts in respect of 2023/24.

The External Auditor plans to give an opinion on whether the accounts give a true and fair view and whether the Council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

Mr Peter Barber, representing Grant Thornton, the Council’s External Auditor, presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

The Committee was referred to the Audit Plan enclosed with the report which set out the work which the External Auditor planned to undertake for the audit of the Council’s Statement of Accounts in respect of 2023/24. Mr Barber explained in more detail the key elements of the Audit Plan, which followed a similar risk-based approach to that of 2021/22. He referred to the opening balances which although not identified as a significant risk in the plan, might require additional assurance procedures in the following year due to the backstop arrangement. He agreed to keep the Committee updated on this matter. It was noted that consideration of the Council’s value for money (VFM) arrangements remained focussed on the previous year’s issues. The report also set out the audit fee for 2023/24 which had increased significantly for the reasons specified.

Mr Barber and the Chief Financial Officer (CFO) provided the following information in response to questions from the Committee:

• The implementation of IFRS 16 leases and related disclosures would need to be factored into the Council’s statement of accounts for 2024/25. The External Auditor had discussed the implications of this with officers
• The Council’s financial sustainability remained a significant VFM risk in the audit plan due to the Council’s financial challenges and the previous year’s position. As part of this work, the External Auditor had regard to the CFO’s annual Section 25 statement and would examine the Medium Term Financial Plan to ensure it was reasonable and deliverable. VFM conclusions had been issued for 2021/22 and 2022/23 and it was hoped that the 2023/24 audit would reflect the Council’s improved financial position.
• The Council was seeking guidance from a number of Government departments on how to manage its position regarding the Dedicated Schools Grant

• The External Auditor was able to use the Section 25 statement to review the different levels of contingency, including general base budget/revenue, savings specific and some service specific.
• National guidance permitted a cap of 70% of the audit fee for non audit services and it was pointed out that this could be a considerable amount bearing in mind the significant increase in fee. The Committee was advised that in reality the level of non audit work undertaken by the External Auditor was relatively small and would reduce further from 2023/24. It was noted that the Council could review its cap and set it at a lower percentage if it wished.
• The External Auditor had adopted the same escalation policy model for all its local government audits but hoped to avoid the need to use it.  Details of the next level of report for each stage could be included if the Committee wished.

The Committee and the CFO placed on record their thanks to Mr Matthew Filmer, the Deputy CFO, and his team for their work in dealing with the various stages of the Council’s accounts for a number of different financial years simultaneously.

RESOLVED that the Grant Thornton External Audit Plan 2023/2024 for the Council be noted.