Agenda item

The Council will receive a presentation and report from the External Auditor summarising the key issues identified during the audit of the Financial Statements for the year ended 31^st March, 2021.

RECOMMENDATIONS OF THE AUDIT AND GOVERNANCE COMMITTEE HELD ON THE 17^TH NOVEMBER, 2021 – to be supplied.

Mr G Mills (Engagement Lead) representing Grant Thornton, the Authority’s External Auditor, made a presentation on the ISA 260 report 2020/21, the report to those charged with Governance.

Mr Mills outlined the roles and responsibilities of the External Auditor with specific reference to the work undertaken in relation to the Accounts, the Use of Resources and Value for Money arrangements to date as well as explaining how this role was undertaken.  He also referred to the revised timescales involved and the reasons for this revision.

The following points were noted:

·         In relation to the findings in the 2020/21 accounts

o   An unqualified ‘clean’ audit opinion was expected to be issued

o   Regular liaison had been undertaken with the Finance Team and wider Management Team

o   Good working papers had been provided and feedback sessions had been held

o   No major weaknesses in the financial systems had been identified

o   There were no audit adjustments impacting on useable reserves

o   A small number of other audit adjustments and presentational amendments had been suggested. 

o   The key accounting matters related to the valuation of the Council’s land and buildings and accounting for the Council’s share of the South Yorkshire Pension Fund

·         In relation to the Key findings in 2020/21 in respect of Value for Money (VFM)

o   A new audit approach to the use of resources audit work had been undertaken which involved a review of the Council’s arrangements in three areas namely:

§  Financial sustainability

§  Governance

§  Improving economy, efficiency and effectiveness – the ‘three E’s’ (service delivery, performance and outcomes)

o   In accordance with the 2020/21 timetable the VFM Review was to be completed within three months of the accounts sign off

o   There were no significant weaknesses in the Council’s arrangements to date

o   There were no issues preventing the External Auditor from signing off the accounts

·         In relation to the key findings in 2020/21 in relation to the £1.4m bank fraud it was noted

o   The fraud was sophisticated, determined and a carefully planned attack on the Council

o   The issue had been brought to External Audit attention by the Section 151 Officer within 24 hours of it occurring

o   The Council had engaged with the relevant authorities and £1m had been recovered with the remaining being covered by the self-insurance fund

o   Internal Audit had undertaken a review and an assurance had been given that this was a ‘one off’

o   The Annual Governance Statement had been updated in respect of this issue

o   The Council had sufficient reserves to fully mitigate any impact on services

o   The Council had taken appropriate actions since the fraud had been identified

·         In summary:

o   A clean audit opinion was expected to be issued

o   No material issues had been identified

o   There was a good level of engagement form the Council during the audit

o   The Council was in a good financial position despite sector challenges

o   The governance arrangements remained appropriate despite the fraud

o   No significant weaknesses had been noted in the Value for Money work to date

The External Auditors also recorded their thanks for the work for the Service Director Finance, for staff within the Finance Directorate and within Internal Audit, for SMT and all other staff who had contributed to ensuring that the Council received an unqualified opinion.

In response to questioning, Mr Mills indicated that Barnsley took great pride in the annual accounts process and in the level of engagement with officers.  There was always a desire to try to make the process as smooth as possible and to become more efficient year on year.  As indicated within the ISA 260 report, there were no fundamental or significant recommendations to note.

Councillor Sir Steve Houghton CBE (Leader of the Council) also placed on record thanks and appreciation for the work of the External Auditors for the way in which the audit had been conducted, to the Director of Finance and his Team and to the Senior Management Team and to all officers and Councillors involved in the process.  He commented that there would always be lessons to learn from the process and as ever, Barnsley would strive to do that.

Councillor Franklin, Cabinet Support Member of Core Services, also commented on the work of the External Auditors and to the Director of Finance and his Team for all their hard work in what was an exceptionally difficult year.

The Council then considered the External Auditors Audit Findings (ISA 260) report for the Council for 2020/21 and this was:

Moved by Councillor Franklin – Seconded by Councillor Howard; and

RESOLVED:-

(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 position 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.