Agenda item

To provide an update on the progress of the Statement of Accounts and to review the Audit Findings Report for 2022/23. 

Ahead of the updated Audit Findings Report being presented to the Committee, the Chair clarified that the final Audit Findings Report remained in progress, therefore final approval of the accounts could not be confirmed at the meeting. An additional meeting was scheduled for 12 October 2023 to enable final consideration of the accounts and recommendation for approval to the Audit & Standards Committee.

Ben Ainsworth, Head of Finance was then invited to introduce a report that provided the Committee with an update to the Statement of Accounts 2022/23 and the External Audit Findings Report.

In considering the report the Committee noted the following key points:

·         Grant Thornton (External Auditors) was in the process of completing the audit of the 2022/23 accounts and their final Audit Findings Report.

·         Adjustments to the accounts had been agreed by the Council and Grant Thornton and would be detailed in the final auditor’s report.

·         Grant Thornton had made a number of recommendations to support further improvements in the Council’s processes, the recommendations identified would come into effect with a revised plan for closing the 2023/24 accounts.

·         Three objections had been received in relation to bus lane enforcement, the Council was in the process of reviewing the objections and seeking legal advice; it was noted that similar objections had been received by several other London Councils.

·         The Committee was advised that providing that the objections were not classified as material, they would not delay the sign off of the accounts; however, the accounts could not be fully certified until the objections had been addressed.

The Chair thanked Ben Ainsworth for introducing the item, before inviting Ciaran McLaughlin, Key Audit Partner, Grant Thornton to update the Committee on the Council’s Audit Findings Report:

The following key points were highlighted:

·         It was highlighted that Brent’s Finance Team had collaborated well with Grant Thornton to get the audit to the current stage of nearing completion. Work had continued to progress well with only a small number of outstanding areas to complete, this included the Housing Revenues Account (HRA), General Fund re-evaluations work and IAS 19 assurance letters. Once any outstanding areas had been completed the audit would be ready for the auditor’s internal review process.

·         The Annual Auditors Report (Value for Money Audit) was being finalised with a draft report expected to be shared with the Council within the next week.

·         Auditors were satisfied with the management responses received in relation to the risks and observations identified.

·         Key judgements were in line with the auditors’ expectations and would continue to be monitored on an annual basis.

·         Auditors were awaiting final confirmation that the 3 objections received were not material, the Committee was advised that if the objections were found to be material it could delay the signing of the accounts.

The Chair invited the Committee to ask any clarifying questions in relation to the update, the following responses were provided:

·         In response to a Committee query in relation to the higher than usual number of journals submitted as part of the audit, it was clarified that although there were a higher number of journals, appropriate information had been received in relation to all of them and the auditors were not concerned that there was an issue. 

·         It was clarified that the higher number of journals submitted this year had resulted from a specific piece of work relating to exploring ways to improve the reconciliation of council tax and business rates, therefore there were a higher number of transactions than usual, this was not expected to be an issue moving forward.

·         Following a Committee query in relation to the sufficiency of the IT system controls, it was confirmed that there had been issues identified, however the auditors were satisfied that any previous deficiencies identified had been appropriately addressed.

·         In response to a Committee query regarding the accuracy of Level 3 valuations, the Committee was advised that the accuracy of valuations were rigorously tested by reputable firms of auditors who were experts in their field, therefore the Committee could be satisfied that the valuations were as accurate as possible.

The Chair thanked Ciaran McLaughlin for the update and invited Sheena Phillips, Senior Manager, Grant Thornton to update the Committee on the Pension Fund Audit Findings Report. 

The following key points were highlighted:

·         The Pension Fund Audit was nearing completion pending further confirmations being received in relation to some Level 3 investments.

·         Brent’s Pensions Fund system transfer, which had initially been flagged as a significant risk due to the volume and sensitivity of data that required transfer, was confirmed as successful, with no issues identified.

·         A previous issue in relation to a journal being incorrectly listed with a different number had also been resolved.

·         It was confirmed that of the audit adjustments identified in Appendix B, there were no major adjustments. 

The Chair thanked Sheena Phillips for the report and invited the Committee to ask any questions or clarifying points in relation to the report. In response to Committee questions the following responses were provided:

·         Although the Pension Fund was subject to a hot review, it was not expected to delay the completion of the Pension Fund Audit.

·         Following a question in relation to the interest rates used to inform the triennial valuations. It was confirmed that valuations were based on March 2022 interest rates, therefore the valuations were likely to be in a better position than reported.

·         The Committee required clarity in relation to the gravity of non original letters of confirmation being provided for the Pension Fund and whether this was an issue unique to Brent. In response the Committee was advised that it was not a Brent specific issue, having been raised with several other local authorities. It had been highlighted that it was best practice to have original letters to minimise the risk of paying pensions that individuals were not entitled to.

As there were no further questions the Chair re-iterated his thanks on behalf of the Committee for the work of Brent’s Finance Team and the Grant Thornton Team in progressing the accounts to their advanced stage. The Chair took the opportunity to welcome Sophia Brown from Grant Thornton, who would be taking on the role of Key Audit Partner for Brent’s 23/24 audit.

As no further issues were raised the Committee RESOLVED to:

(1)   Note the key issues and recommendations identified in the Audit Findings Report.

(2)   Note the corrected audit differences.

(3)   Note the draft audit opinion.

(4)   Note the objections to the accounts; and that pending confirmation that the amount was immaterial, the objections would not delay the signing of the accounts; however, would delay the final certificate from the auditors.

(5)   Note that in order to allow the Audit process to be finalised, an additional meeting of the Audit & Standards Advisory Committee had been scheduled for 12 October 2023 to allow final consideration and formal approval of the accounts to be recommended to the Audit & Standards Committee.

(6)   Recommend to the Audit & Standards Committee to agree the delegation of approval of the draft letter of representation to Grant Thornton to the Corporate Director of Finance & Resources.