The External Auditor (Grant Thornton) presented the Finance and Audit committee with a report that summarised the key findings that arose from the statutory audit for the 2019/20 financial year. The following key points were highlighted:

• Members would recall there was an elongated process for the 2019/20 accounts, which had been previously reported back to the committee within the audit findings report and a separate value for money report.
• Under the code of practice that existed at the time, the External Auditor was also required to produce the Annual Audit letter. There was no new information included within the letter.

Following questions and comments from members, the External Auditor (Grant Thornton) explained that:

• Grant Thornton concluded the audit of the 2019/20 accounts late last year and issued the audit opinion earlier this year.
• All recommendations for the council relating to the 2019/20 accounts had been responded to by Management.
• In relation to the audit backlog position, the Partner and Director (Public Sector Audit) provided their view on the current position, indicating their view that they expected the government backstop process to require accounts to be completed and audited for all years up to 2022/23 by the end of the calendar year, and that the subsequent catch-up programme would support that in 3 years from now, all audits would be back to a position to meet deadlines. Audit opinions may remain qualified in some circumstances for a 5-year horizon. This was not specific to Gravesham and was the expectation across to the local government sector.  Grant Thornton was fully committed to the catch-up process.
• In relation to the Value for Money assessment, the next report on the agenda confirmed that there was no backlog on the value for money work of the External Auditor. The Director (Public Sector Audit) expected legislation to be passed to support the proposed audit backlog and catch-up processes, but this would be impacted by the recent General Election.
• Management was currently in the process of producing draft accounts for the outstanding years. Grant Thornton expected the 2023/24 accounts to be provided to them by management in the coming months and have currently scheduled the audit to commence in February 2025. As set out later in the agenda, the audit plan for the 2023/24 accounts would give assurance over the closing balances at 31 March 2024 and the transactions in year.
• The Director (Corporate Services) advised that despite the challenges the external auditors and management had in clarity on what would be required and by when from the audit backlog and catch-up process, there was good communication and working between the external auditors and management about how they could work together to get to a position where for 203/24, they can meet the current 31 May 2025 deadline. It was accepted that there will be a need for the disclaimers on audit opinions because the auditors would not be able to do what they were required to do under their code, to deliver a true and fair view. As part of the consultation document issued by the previous government on the audit backlog, there were questions around what the disclaimers may look like and what they may contain – it was important that they were a fair reflection of the position.
• The External Auditor agreed that up and down the country, there were concerns. The progress report showed that Grant Thornton was ahead of other firms in terms of performance. The reasons for the current position were multifaceted and complicated, such as audit resources, technical issues, accounts preparation, regulation, and the abolition of the audit commission. They were closing off as much of the old accounts as they could and would be discussing the way forward.

The committee noted the report.