Agenda item

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

The Director, External Audit (Grant Thornton) presented an update of the Interim Audit Findings report on the Council’s 2022/23 financial statements and confirmed that whilst there  had not been any significant changes or additional issues to bring to Members’ attention there were still some areas of work that were outstanding at the point of publication of the agenda. She provided an update on each area including the completion of debtors, creditors and collection fund testing and work in relation to  Exeter City Living which would be concluded by the end of the week with some  follow up work in relation to the completion of valuation work in respect of St Sidwell’s Point and the audit testing on pension liability.  Further information on the Council's Minimum Revenue provision was also forthcoming.  The remainder of the work had been completed.

The Director External Audit made the following responses to Members’ enquiries:-

·     an external valuation expert provided a valuation of St Sidwell's Point, which had a recognition that St Sidwell's Point was constructed to a particularly high specification standard and of the discrepancy between the true actual cost of building and the cost to rebuild and deliver an equivalent leisure centre of that nature. The audit would consider the assumption and conclusion of the Council's valuation and recognition of the difference between the cost to build and the current carrying value was materially accurate and was reflected as an impairment adjustment.

The Deputy Chief Finance Officer responded to a Member’s question over the values and reported that she had checked the Asset Register and the accumulative spend which was £44.6 million. A sum of £37.76 million was included on the balance sheet as at the end of March 2023.

·     it was important to recognise that the Statement of Accounts should include instances where the Council had related parties with external bodies and if there had been significant transactions or element of Council with those parties. A formal process and return of Declarations of Interests from the Strategic Management Board was a part of this work and following further contact, the appropriate responses were received to ensure the disclosures were accurate.

The Director Finance confirmed that the Strategic Management Board did agree with the recommendation and further work on the required annual return, including a nil return, would be completed to ensure the process was followed, and any Declarations of Interest relevant to Council business declared.

The Director Finance made the following responses to Members’ enquiries:-

·     the new finance system would be live from April 2025. A review of superuser access would be included as part of a restructure of the Finance team.

·     the Strategic Management Board would be monitoring the recommendations for the Council identified in the report and Action Plan throughout the year to ensure they were addressed. Any failure to implement the recommendations would be reported to the Audit & Governance Committee.

The External Audit Director added that an update in the key recommendations would be included as part of their year-end report. She provided assurances that her team formally followed up progress on key recommendations as she was duty bound to report back and would report back as scheduled but was able to provide an interim update if required.

The Chief Executive provided assurance to the Committee that the Strategic Management Board which included the Director Finance would be monitoring progress against the recommendations. She said she could see no reason why they could not report back to  the Committee on the progress of that. She was happy for the Director Finance to report back progress on the recommendations.

The Member appreciated this and said she was concerned about the recommendations in relation to the shareholder’s representatives and this has been an ongoing issue for the last two years now. The Audit and Governance Committee had looked at this before and attempted to clarify but there were a number of associated companies and the issues still that remain and she would appreciate and update at the next Committee and see if we can focus on this issue and how it can be resolved, and look into the CIPFA Guidance on associated companies and a report and some changes made.

The Chief Executive was happy to come back to the next Audit & Governance Committee or the one after but she certainly agreed that it was an area that they started to look at and they would come back with responses.

RESOLVED that the Audit and Governance Committee note the update of the Interim Audit Findings report from the Exeter City Council (External Auditor), Grant Thornton.