Agenda item

Grant Thornton, as the Council’s appointed External Auditors, have produced a report (Appendix A) which provides an update to Audit and Governance Committee on their progress to date in delivering their responsibilities.

The report states that, as previously reported, a number of matters had arisen that delayed completion of their 2020/21 opinion audit.

Work has now been substantially completed however there are two key areas that have impacted on the revised completion timetable of the end of February 2022 covering pension liabilities assurance from the Pension Fund auditor and national infrastructure accounting issues.

Grant Thornton intends to keep Audit & Governance Committee appraised of progress towards completion of the audit.

Work has been completed on certification of claims and returns for the Council, as detailed in the report.

The External Auditor, Grant Thornton, 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 for the Committee on progress to date in delivering Grant Thornton’s audit responsibilities and, since last reporting to the Committee, progress had been made with certification of claims and returns completed in the areas of Teacher Pensions, Housing Benefit Subsidy and Housing Capital receipts pooling.

The report explained, however, that, as previously reported, a number of matters continued to delay completion of their 2020/21 opinion audit. The Committee was informed that, primarily, the key areas impacting on the completion timetable were delay in work undertaken by the Auditors of the Dorset Pension Fund and a national issue regarding the accounting of infrastructure assets, both issues that were beyond the control of the BCP Council.

Grant Thornton set out the steps that they were taking to expedite completion. The Director of Finance emphasised the Council’s frustration at the process and concerns about the impact that the delay was having on the work of the Audit and Governance Committee, on Council Officers and upon the integrity of the audit process overall.

There was also a concern about how the additional work being undertaken by Grant Thornton would be reflected in the audit fee. Although in respect of the Pension Fund the main issue was the awaited receipt of the Letter of Assurance, Grant Thornton reported that there was less certainty about how the assets and infrastructure issue would be resolved. They did, however consider that the extra work likely to be required would have implications in terms of fees. Any required adjustment to fees would be discussed with the Director of Finance and brought back to the Committee in the usual way.

The Chairman explained that, for his part, he had also raised the issue with the Dorset Pension Fund through his role as the Council’s representative on the Pension Fund underlining the importance which rested upon receiving the Letter of Assurance from the Pension Fund Auditors as soon as possible.

Grant Thornton confirmed that they were keen to start work on the audit of the 2021/22 accounts, with a view to completing the work in November 2022, despite delays in relation to the 2020/21 accounts.

The Committee was clear that it should understand the reasons behind these delays and whether the reasons for the delay were administrative or significant. In response to questions from the Committee, Grant Thornton provided further details of the steps being taken by them and undertook to take further steps to obtain the required Letter of Assurance. There was also discussion about whether a ‘qualified’ opinion could be issued and this was accepted as an option. Grant Thornton explained that whilst audit procedures already covered infrastructure there was now additional challenge required to satisfy the national requirements and there remained some uncertainty about the scope of the additional work necessary.

The Committee noted that the next opportunity for an update on this matter would be at the Committee’s core business meeting on 14 April 2022 and this would need to be included as an item on the agenda for that meeting. In the meantime, however, a previously convened group consisting of the Chairman and Vice-Chairman of the Committee and the Director of Finance and Grant Thornton would be reconvened to monitor progress and to provide, if possible, updates to Committee members ahead of the 14 April meeting.

In response to a specific further question about the Children’s Services Value for Money report, Grant Thornton confirmed that this would be included within its full Value for Money report to the Committee.

RESOLVED that, subject to the additional steps identified by the Chairman of the Committee to meet with Grant Thornton, the Audit and Governance Committee note the External Auditor’s report on progress to date in delivering their responsibilities in respect of the audit of the 2020/21 accounts.

Voting: Unanimous