Agenda item

The Committee considered a report of the External Auditor (Grant Thornton) which had been submitted in accordance with International Standard on Auditing 260, the External Audit Governance Report 2020/21.  Mr G Mills and Mr T DeZoysa representing the External Auditor attended the meeting to present the report and to answer Members questions.

The report incorporated, amongst other things, the following:

·         The Financial Statements, including the significant audit risks, key findings from the group audit, new issues and risks, key judgements and estimates, other communication requirements other responsibilities under the Code and Going Concern assumptions and other responsibilities under the Code

·         The Value for Money (VFM) arrangements (which, as previously reported, had changed with the introduction of the new Code of Audit Practice), the risks of possible significant VFM weaknesses and the VFM procedures and conclusions which would be reported no later than February 2022

·         The Accounts production and audit process

·         The current position with regard to the completion of the audit of the financial statements

·         The statement of Independence and ethics

Appendices to the report provided the following:

·         The Action Plan to address issues identified

·         The position with regard to the follow up of prior year recommendations

·         The Audit Adjustments

·         The audit fees charged for the audit and the provision of non-audit services

·         The draft audit opinion.  It was anticipated that subject to a number of outstanding matters, an unqualified (clean) audit opinion would be issued by 30^th November, 2021 following consideration by Council on the 25^th November, 2021

·         The audit letter in respect of the delayed VFM work

In relation to the Financial Statements, the report summarised the key findings in relation to the 2020/21 external audit.  To date no audit adjustments had been identified impacting on the Council’s useable reserves.  A list of presentational audit adjustments was detailed within Appendix C.  In addition, a small number of recommendations for management were detailed within Appendix A.  Work was nearing completion and there were no matters of which the External Auditors were aware that would require modification of the audit opinion or material changes to the financial statements subject to a small number of outstanding matters as detailed.

The External Auditor’s Value for Money work was not yet complete and the reasons for this were outlined both within the report and in the audit letter contained within Appendix F.   A possible significant VFM weakness had been identified in relation to the Councils Dedicated School Grant (DSG) deficit and arrangements and appropriate plans had been put in place to ameliorate those risks.  It had been concluded that there were no residual significant weaknesses at the time of the financial statement audit opinion date.  Further work on this matter would be undertaken and a report submitted before the end of February, 2022

Finally, thanks were expressed to officers and members for their continuing help and co-operation throughout the audit work in what had been a particularly difficult time.

The presentation engendered a full and frank discussion during which matters of a detailed and general nature were raised and answers were given to Members questions where appropriate.

The following issued were referred to:

·         Reference was made to Minimum Revenue Position.  It was not anticipated that there would be a significant impact should there be a rise in interest rates

·         Information was given in relation to an immaterial error in respect of overstating a supplier invoice as detailed within Appendix C.  It was reported that the actual payment was made to the correct invoice value.  This was not, therefore, considered to be material to the Council’s accounts

·         There was a detailed discussion in relation to the possible VFM significant weakness in relation to DSG.  It was noted that appropriate plans were in place to deal with this and, in addition application had been made to the DfE for funding towards this deficit.  Barnsley was in no different position to many other authorities.  A further report would be submitted to a future training/awareness session

·         There were no concerns in relation to the accounting for the Pension Fund liability

·         In response to specific questioning Mr Mills representing the External Auditor outlined the current position with regard to prior year grant income and he explained that the previous year’s accounts were materially correct

RESOLVED that the Committee place on record their thanks and appreciation for the hard work of the External Auditor and the Service Director Finance and his Team in this process; and

RECOMMENDED TO FULL COUNCIL ON THE 25^th NOVEMBER, 2021:-

(i)            That the External Auditor’s (ISA 260) Report 2020/21 be approved;

(ii)          That the findings on the effectiveness of the Council’s internal controls and the current positon with regard to the Value for Money conclusion be noted; and

(iii)            That the findings from the audit work in relation to the 2020/21 Financial Statements be noted.