The committee was presented with an Audit Findings Report at the previous Finance & Audit Committee on 08 November, however at that stage the external audit process was in progress. An updated report that included an action plan with management responses and the draft audit opinion had now been provided for Members and could be found at Appendix One. The report gave Members a further update on the findings of the council’s External Auditor, Grant Thornton UK LLP, from the audit of the council’s financial statements and arrangements for securing Value for Money for the year ended 31 March 2020.

The External Auditor, Grant Thornton advised that there were two areas that were the basis for the qualified opinion:

• The first area was around the St Georges transaction; the Council had determined that the money paid by Aviva, on behalf of the Council to Reef should not be accounted for as the monies were never in any of the Council’s accounts and were made outside of the Council’s accounting boundary  
• The second area was around asset valuations and the HRA Revaluation Reserve; there was a technical adjustment which would have no financial impact on the Council or the 2019/20 accounts. It would take considerable time for the Council to resolve the matter as properties had to be revalued from 2007/08 onwards which the Council currently did not have the resources or capacity to complete

The External Auditor, Grant Thornton explained that an independent panel had reviewed the reasons for the qualified audit and agreed that it was appropriate as outlined in the report. The final fee position had also been agreed with the Council and was reflected in the report.

The External Auditor, Grant Thornton confirmed that the audit was essentially complete; it was hoped the 2019/20 accounts would be fully signed off by mid-January 2024.

The Chair thanked officers and the external auditors for their hard work in completing the audit of 2019/20 accounts.

The Chair queried several discrepancies in the report with regards to compliancy with the CIPFA Code and asked for clarification on whether the Council had been compliant with the CIPFA Code, in particular in relation to the HRA Revaluation point.

The External Auditor, Grant Thornton explained that the CIPFA Code required granular revaluation and Grant Thornton had requested that the Council account for a full restatement of the Revaluation Reserve in line with the CIPFA Code, but the request was rejected due to lack of resources. The CIES, MIRS, Cashflow Statement, the PPE note, Unusable Reserves note, and other related notes would be impacted . However, there would be no impact to Balance Sheet or the HRA overall.

The Chair reconfirmed that Members had endorsed the position taken by senior management at the Council.

The Director (Corporate Services) reconfirmed that the Council took the view that the money paid by Aviva, on behalf of the Council to Reef should not be recognised as part of the liability in the accounts, because the payments made were outside the Council's accounting boundary as the Council did not make any payments or receive any income in the Council’s books and records which reflected those transactions.

Members noted the report.