To consider the report of the Council’s External Auditor, Grant Thornton.
Minutes:
The Chief Finance Officer reported that Grant Thornton, who had been contracted to carry out the audit of the City Council’s Final Statement of Accounts and associated work had been unable to complete their work in time for consideration at this meeting. It was noted that the final Audit Findings report, Final Statement of Accounts 2018/19 and the Management Representation Letter would be presented for Members’ consideration and approval at an additional meeting of the Audit and Governance Committee to be held in January. The reasons for the delay were due to an external resourcing issue and was outside the control of the City Council.
The Chief Finance Officer had just had sight of a further draft of the Audit Findings report which ostensibly contained the same detail as the report received in September, and he was able to forward a copy of that report to Members if required. He added that the delay had impacted on the work programme of the City Council’s finance team, who now needed to focus on preparations for the budget framework for next year.
The Chief Finance Officer also acknowledged Members’ concerns and responded to the following Members’ comments:
· unfortunately the Devon Audit Partnership were not qualified to deliver an external audit.
· the contract for the Council’s external audit was managed by the Public Sector Audit Appointments (PSAA), with Grant Thornton being in effect sub-contracted to carry out the work. This was the first year of a five year contract and it was noted that the City Council would take up the matter of the delay with the PSAA, and would offer the appropriate level of feedback to reflect the disappointment. The delay was mirrored in a number of local authorities, in part, due to a change to the timetable in a number of national audits which had effected firms such as Grant Thornton who had been unable to meet the newly imposed deadlines. He added that this had also impacted on the finalisation of Central Government’s accounts and the NNDR3 and business rates return.
· the contract was between Grant Thornton and the PSAA and so Exeter City Council had no leverage to impose any additional charge, but we would nevertheless be taking up this concern with the PSAA as an additional charge. This situation had impacted on virtually every Council in Devon.
· the Redman Review, a review of local authority financial reporting and external audit was ongoing, and the City Council would ensure that they made the appropriate representations.
Members were concerned that the new Audit arrangements were not working effectively compared with the arrangements under the former Audit Commission. The Chief Finance Officer reminded Members that the accounts had previously been audited by private firms since 2008 and Grant Thornton had offered an excellent service. Members were unanimous in expressing that the current external audit arrangements needed some review. A Member also enquired about the likely impact the delay would have on next year’s audit and it was agreed that every effort would be made to ensure that a plan was in place, along with a more coordinated approach by the PSAA.
The Audit and Governance Committee noted the position.