To consider the report of the Council’s External Auditor, Grant Thornton.
Jackson Murray, the Engagement Lead from Grant Thornton, the Council’s External Auditors, updated Members on the Audit deliverables and key matters of their progress including the financial statements audit, the value for money conclusion and certification of the housing benefits subsidy claim. He advised that the draft financial statement was received on 31 July 2020, before the revised national publication deadline of 31 August 2020, which had enabled their audit team to commence selecting samples for testing. It was anticipated the audited financial statement would be issued by the 30 November 2020 target date.
Covid-19 continued to impact on their work which was predominantly undertaken remotely and whilst there were benefits, some aspects of the work were taking longer to complete. The progress report included reference to a number of publications including a National Audit guide for Audit Committees on financial reporting and management during Covid-19 as well as the new National Audit Office Code of Practice for the 2020/21 period and he would update Committee Members accordingly at the earliest opportunity. A Member suggested two of the reports referred to in Grant Thornton’s report, from Localis, an independent not for profit think tank, entitled ‘Building for Renewal: Kick-starting the C19 Housing Recovery’, and a ‘Place Based Growth’ report produced in collaboration with the County Councils’ Network merited further consideration and he suggested an urgent cross party exploration by this Council of a number of the issues identified. Members considered that there were many interesting themes in the reports and suggested holding a Members’ Briefing, as well as raising at a future Scrutiny Committee or the Executive.
The External Auditor’s Engagement Lead also referred to the recent publication of the Redmond Review which considered the local government audit market and provided a summary of its key themes and main recommendations to strengthen governance which included:-
· the creation of an Office of Local Audit and Regulation to be responsible for the regulation of the local audit market and include a number of functions performed by the Public Sector Audit Appointments Ltd,(PSAA) who currently oversee the appointment of external auditors.
· formalising the liaison meeting process between external auditors and senior officers within the local authority.
· External Audit reporting annually to the local authority and not necessarily just through the Audit Committee process.
· consideration of moving the accounts reporting timetable back to the 30 September.
· recognition that audit fees were too modest for the complexity of the work entailed, particularly around the preparation of the financial statement.
· the accounting body, CIPFA, should review the accounting
· the creation of a summary document aside from the financial statements to the accounts, which would be audited to offer greater accessibility for members of the public.
The Director Finance advised that he had attended a webinar event on the Redmond Review and the discussion had included the prospect of the inclusion of an independent member who would be a suitably qualified accountant to sit on the Audit Committee of each local authority. Whilst, audit work would continue to be carried out by firms such as Grant Thornton, there would increasingly, be an ongoing dialogue over the cost versus quality issue and ability within the time scale. He reminded Members that significant savings had to be made by the Council, against the backdrop of any increased cost in the audit delivery process.
A Member suggested any such future review of membership should also consider performance against the scope of the Audit Committee. The External Auditor’s Engagement Lead welcomed the opportunity to discuss the Redmond recommendations at the next meeting of this Committee. The Director Finance would provide a summary for Members.
The Audit and Governance Committee noted the External Audit Progress Report
and welcomed two particular reports ‘Building for Renewal: Kick-starting the C19 Housing Recovery, and a ‘Place Based Growth’ which Members suggested merited further consideration in some form by the City Council.