Agenda item

To consider the Executive Head of Finance’s Report No. FIN2123 (copy attached) which informs Members of audit progress for the Council’s Statement of Accounts for 2019/20.

The Committee received the Executive Head of Finance Report No. FIN2123 which informed Members of audit progress for the Council’s Statement of Accounts for 2019/20 and provision of the audit opinion by Ernst & Young (EY) since the meeting on 27th September 2021.

The Chairman welcomed to the meeting Maria Grindley and Justine Thorpe from EY who had joined the meeting remotely via Teams.

The Committee was advised that, at the time of writing the Report, there had not been any significant progress on resolving the remaining property and valuation related queries.  Whilst these were relatively minor queries for the Council to resolve, they were material to allow EY to form its audit opinion.  EY required all issues to be resolved before they were able to consider the next stage of the audit opinion process.   Once all queries had been addressed, consideration would need to be given to any adjustments proposed by EY to the financial statements.  The Council would need to satisfy itself that these adjustments were reasonable and supported by appropriate evidence and detailed accounting guidance. 

The Report set out the proposed process to be followed should the audit opinion have been available during October 2021 and prior to this meeting.   Should it be possible to resolve all remaining queries during November and December 2021, it was proposed to agree the accounts and audit opinion before the next scheduled meeting in January 2022.  Subject to all Members of the Committee being provided with a copy of the audited Statement of Accounts and the Audit Results Report in advance, it was proposed that the Chairman and the Executive Head of Finance be authorised to approve formally and certify the audited Statement of Accounts 2019/20 and to receive the final External Auditor’s Report. 

The Committee was reminded of the revised draft and final accounts publication deadlines for relevant bodies for the accounting years 2020/21 and 2021/22 which had come into force from 31st March 2021.   The Council had amended its 2020/21 accounts closure process to meet the revised Accounts and Audit Regulation 2021 timetable.  However, it was unclear when the audit of the 2020/21 financial statement would commence as the audit process for 2019/20 had not yet been completed. 

During discussion, a question was raised concerning the Annual Governance Statement and the Internal Audit Opinion which had been considered at the previous meeting, when the Internal Audit Manager had been of the opinion that, due to the reduced number and scope of internal audits completed during 2020/21, she had felt it was not possible to provide a full overall Internal Audit Opinion on Rushmoor’s framework of governance, risk management and management controls.  The reason for this had been due to a combination of factors including reduced audit resources and the diversion of service resources to the Council’s response to the Covid-19 pandemic.   In response, the Executive Head of Finance reminded Members of the update provided earlier in the meeting regarding advice sought from CIPFA.  He also assured Members that there was no evidence of fraud or corruption or any evidence of lack of internal control within the Authority.  CIPFA would be visiting the Council shortly and would be able to provide some assurance to Members in due course regarding the Annual Governance Statement. 

In response to a question on when it was expected that the audit opinion could be provided, Ms. Grindley stated that she hoped that the Council would be able to respond quickly to any follow-up queries from EY on information submitted by the Council.  It was difficult for EY to give a timeframe on when the audit opinion could be provided. 

The Chairman thanked Ms. Grindley and Ms. Thorpe for joining the meeting.

RESOLVED:  That

(i)           the Executive Head of Finance Report No. FIN2123 be noted;

(ii)          the indicative timetable for approval of the 2019/20 Statement of Accounts and receiving the Audit Opinion be noted; and

(iii)         subject to all Members of the Committee being provided with a copy of the audited Statement of Accounts and the Audit Results Report in advance, the Chairman and the Executive Head of Finance be authorised to approve formally and certify the audited Statement of Accounts 2019/20 and receive the final External Auditor’s Report.