Agenda item

To consider the report of the External Auditor (Grant Thornton)

Julie Masci, Engagement Lead, and Katie Whybray, Senior Manager Audit, for the Council’s External Auditors, Grant Thornton presented the Audit Findings report, which included the audit of the 2020/21 Financial Statements and an update on the Value for Money work.

The Engagement Lead advised that although their work on the audit of the financial statements was substantially completed, the certification for the closure of the 2020/21 audit of Exeter City Council would be delayed, as a number of audit areas were outstanding. It was intended that the audit would be concluded by the end of November. Any concerns relating to the outstanding work would be communicated to the Committee before completion of the Audit.  It was important to highlight that the Council’s officers had fully cooperated throughout the course of the audit.  The work on the Value for Money requirement would be completed within a prescribed three month timeframe, and the outcome would be reported to a subsequent Audit and Governance Committee meeting.

The Engagement Lead gave the following responses to Members’ questions and confirmed that

·         the audit was substantially complete and there was no reason to delay in advising that an unqualified opinion would be given. The practice of audits not being concluded when presented to Members was not uncommon. Although a formality, the date of the management letter, setting out the representation could be updated to mirror the completion of the Final Statement of Accounts.

·         the Council’s approach to holding debts included consideration of the age profile of debts and making a provision for non-collection. The Director Finance stated that where possible the Council generally take a conservative approach and for sundry debtors a provision was made at 90% for debts aged over five years.  Grant Thornton consider the Council’s approach as part of the audit and whether the provisions are considered prudent. A judgement of significant debtors was made on a case by case basis and the statement of audit was a snapshot at a point in time. A significant amount of work went into the management of bad debt provision.

·         the audit in relation to officer declarations of interest included the recording of a whole raft of additional checks such as employment with related partners. The request for further information did not relate to the remit of the policy but to a lack of return for each officer. The Director Finance agreed with the findings which had been an oversight and would be rectified.

·         the Council’s group accounts are included in the audit work. Detailed account information was obtained from Exeter City Living’s own auditors to ensure it met the recommended audit standard for the Council albeit under a separate audit process.

·         the focus of a value for money approach for third party entities is to ensure there were the appropriate governance arrangements in place to ensure the service could be delivered. It also included the financial monitoring and the company arrangements and how they impact on the Council.

·         the Value for Money work reflected the challenging environment and financial position across the Council as a whole. It was important to consider the scale of the challenge and how the financial plan was delivered.

The Audit and Governance Committee noted the report on Audit Findings from the Exeter City Council (External Auditor), Grant Thornton.