The Committee were provided with a report that advised them of the progress of the external audit by Grant Thornton of the Council’s finances for the 2019/20 financial year. Members were previously advised that the accounts for 2019/20 had been signed off and published.

The External Auditor, Grant Thornton stated that the outstanding Value for Money work up to the financial year 2022/23 was underway and was hoped to be completed in the next couple of months. The remaining item for the Council to complete was to agree a timetable for completing the outstanding financial accounts to meet the backstop deadline; Grant Thornton would agree the timetable with the Finance Team.

Discussions were being held in the background with the Department for Levelling Up, Housing and Communities (DLUHC), other audit firms and the Financial Reporting Council (FRC) about the scope and scale of work needed for the backstop to be completed; DLUHC wanted all local authorities to be in the same position and had provisionally set a date of 30 September 2024 for all audits of accounts, up to the 2022/23 financial year, to be completed. Further discussion would be required with the FRC regarding the practicalities of meeting that deadline due to requirements placed on auditors through the current auditing standards.

The External Auditor, Grant Thornton advised that an update should be available for Members at the next Committee meeting.

The External Auditor, Grant Thornton fielded questions from Members and explained that:

• Grant Thornton were confident that they would be able to work with the Council in seeking to meet the September deadline for the backstop; concurrently, work would be underway on the 2023/24 accounts. CIPFA is consulting on changes to the accounting code that had the potential to make the preparation and auditing of accounts a more straight forward process. The changes proposed would possibly come into effect for the 2023/24 accounts but would definitely be in effect for the 2024/25 accounts. One of the challenges to DLUHC’s backstop plan was recruitment and retention issues, as there may not be enough auditors to complete the level of accounts required by the deadline
• The changes proposed to auditing code and practice were focused on the Value for Money Conclusion; the current consultation would see Grant Thornton required to issue a Value for Money conclusion annually in November.

The Chair queried when the issues in the action plan, that advised that they would be considered as part of the 2020/21 statement of accounts process, in addition to the difference of view between Grant Thornton and the Council over the interpretation of the accounting treatment for the St Georges Centre, would be resolved.

The Director (Corporate Services) explained that the action plan related to the 2019/20 accounts. The Finance Team would work through the actions list and conclude if the view taken in the 2019/20 accounts remained the same for the 2020/21 accounts or if changes were required.

The External Auditor, Grant Thornton advised that the difference of view regarding the valuation of the St Georges Centre transaction would not be an issue in 2024/25 as it only carried through to the 2023/24 financial year. It was the External Auditor, Grant Thornton’s, opinion that the matter may not be so significant for the financial years 2020/21 to 2022/23 as the accounts would be backstopped. The Council needed to produce the accounts for those years up to 2022/23 which would then be backstopped; Grant Thornton may reference earlier accounts in future reporting. The External Auditor, Grant Thornton added that the accuracy of opening balances for 2023/24 remained an issue for all local authorities.