Agenda item

The Committee considered a report of the External Auditor (Grant Thornton) which had been submitted in accordance with International Standard on Auditing (UK) 260, the External Audit Governance Report 2021/22. 

Thilina De Zoysa representing the External Auditor attended the meeting to present the report and to answer Members questions.

The following key highlights were presented:

·            The External Auditor had substantially completed its audit of the Authority’s financial statements for the year ended 31 March 2022. 

·                Subject to successfully concluding the outstanding matters listed in the report, including the infrastructure assets issue, Grant Thornton expected to issue an unqualified audit opinion on the Authority’s financial statements by January after the Statutory Instrument (SI) is published by DLUHC.

·            The External Auditor’s Value for Money work was not yet complete and the reasons for this were outlined within the report. 

·            The Value for Money findings would be reported to the Committee in the Auditor’s Annual Report in January 2023.

·            The External Auditor was currently awaiting a final piece of audit assurance associated with the Council’s net pension fund liability from the South Yorkshire Pension Fund Auditor. 

·            Section 2 of the report set out the significant risks as communicated in the Audit Plan. 

·            Key findings arising from the Group Audit were contained within Section 3 of the report, noting that work was currently in progress.  From the work completed to date, there were no issues to report. 

·            Several new issues and risks which had been identified during the course of the audit were presented in the report. 

·            In relation to the Valuation of Infrastructure Assets, the External Auditor would continue to brief the Finance Team and Committee on any developments as they arise.  It was anticipated that the External Auditor would be in a position early in the New Year to sign-off.

·            A possible significant VFM weakness had been identified in relation to the Council’s arrangements for 2021/22 to improve the economy, efficiency and effectiveness in implementing the Special Educational Needs and Disabilities (SEND) reforms in Barnsley.  Further work on this matter would be undertaken and a summary of findings would be included in the Auditor’s Annual Report in January 2023. 

·                The External Auditor’s note on Independence and Ethics and Audit Fees were detailed in Section 4 of the report.

Thanks were expressed to officers and Members for their continuing help and co-operation throughout the audit work. 

In the ensuing discussion particular reference was made to the following points:

·            With regards to the Dedicated Schools Grant Deficit, it was noted from management responses in the report, there are ongoing discussions with the Department for Education for funding to reduce the deficit and this cannot be charged to general fund reserves.  This is an unusable reserve, and the Council has correctly reported this in line with LG Code guidance. 

·            It was confirmed that the Council were comfortable with the External Auditor’s recommendations and adjustments had been made to the Accounts. 

·            Assurances were provided that the Council was fully aware that the current version of the SAP reporting system used by the Council would no longer be supported by SAP beyond 2025.  With this in mind, an independent assessment of options has been commissioned with regards to the future of SAP.  Regular updates would be provided on progress to Cabinet and the Audit and Governance Committee, when appropriate.  

·            Reference was made to an Audit Adjustment in relation to the incorrect treatment of a supplier invoice for the Glassworks construction.  Confirmation was received that an accrual had been made in the accounts, prior to the invoice being received.  No overpayment was made to any supplier, the correct amounts had been paid by the council and that the adjustment made was only an accounting adjustment.  The adjustment had been made in the 2021/22 accounts.

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 24 NOVEMBER 2022:-

(i)         That the External Auditor’s (ISA 260) Report 2021/22 be approved;

(ii)        That the findings on the current position with regard to the Value for Money conclusion be noted (as not completed); and

(iii)       That the findings from the audit work in relation to the 2021/22 Financial Statements be noted.