Agenda item

To receive an update on the progress in finalising the External Auditor Annual Report and Council’s Statement of Accounts for the year ended 31 March 24.

(Agenda republished to include the attached report on 21 February 2025)

David Ewart (as Chair) commenced consideration of the item by advising members that whilst considerable progress had been made in completion of the audit and finalising the Council’s 2023-24 Statement of Accounts it had not been possible for the final Audit Findings Report to be issued in time for consideration and approval at the meeting.  Recognising that the process was nearing completion, however, he advised that the Committee was being asked to consider recommending to the Audit & Standards Committee approval of the Statement of Accounts (subject to no other material changes being identified as required by the external auditors) and delegating approval of the draft letters of representation to the Corporate Director Finance & Resources.  In recognising the comments raised by the Committee when considering the update on the audit provided on 31 October 24 and at the previous meeting on 4 February 25, the Chair advised members that a review of the issues identified and lessons learnt as a result would be undertaken with the outcome provided for future review by the Committee.

Ravinder Jassar (Deputy Director of Finance) was then invited to provide an update on the current position with members advised of the progress made in addressing the outstanding areas of the audit identified at the previous meeting as part of the updated Audit Findings Report on 4 February 25.  Confirmation was provided that the audit of Plant, Property and Equipment (PPE), which was the original cause of the delay in the audit, had concluded with it anticipated that the final Statement of Accounts would be in a position to be signed off prior to the backstop deadline on 28 February 25, subject to no further material changes being required.

Sophia Brown (Key Audit Partner – Grant Thornton) was then welcomed to the Committee and invited to provide a further update for members on the current status of the audit, with the following issues noted:

• Whilst the Audit Findings Report had not been subject to further update, confirmation was provided that work on the PPE note to the accounts had been completed with the revised note included as part of the Financial Statements.

• Work was ongoing to complete the final internal consistency checks on the revised financial statements in order to provide final assurance on the application of the variances and adjustments identified.  At this stage, however, it was felt any further changes identified would be for disclosure purposes only and not likely to involve any material adjustments to the core Financial Statements. As such, it was confirmed that Grant Thornton were supportive of the recommended delegations being sought to enable the Statement of Accounts and Letters of Representation to be approved with the adjustments to be made included in the final updated Audit Findings report.

The Chair thanked Ravinder Jassar and Sophia Brown for their updates with confirmation provided by Sophia Brown that the internal consistency checks were not expected to identify any further material change or adjustments to the core Financial Statements.

As no further issues were raised, Members were then invited to consider the recommendations outlined in the report on an individual basis.  Having once again thanked Sophia Brown and the audit team at Grant Thornton along with the Council’s Finance Team for their efforts to complete sign off in advance of the backstop deadline it was RESOLVED:

(1)  To recommend to the Audit & Standards Committee that approval of the draft letters of representation to Grant Thornton for the Council and Pension Fund be delegated to the Corporate Director of Finance & Resources, as set out in Appendices A & C of the report, which member noted was the standard template, with no additions.

(2)      To note the draft audit opinions, as set out in Appendices B & D of the report.  Members were advised that the draft audit opinion highlighted the key matters arising from the audit of the 2023-24 accounts and whether the council’s financial statements were assessed to present a true and fair view of the financial position, its expenditure and income for the year and whether they have been properly prepared. They were also used to report the audit findings to those charged with governance.  In providing an unqualified audit opinion, reference had been included to the significant weakness identified with the Auditors Annual Report in relation to the assessment of the Council’s Financial Sustainability, which the Committee had considered in detail at their meeting on 4 December 24.  Although the draft opinion had been issued, Sophia Brown advised that it would not be possible to certify the final 2023-24 audit opinion given an instruction from the National Audit Office for all external auditors to hold off this process pending completion of all local authority opinions being signed off.

(3)      To recommend to the Audit & Standards Committee approval of the final 2023-24 Statement of Accounts, subject to a written assurance being provided that all outstanding matters and adjustments contained in the Audit Findings Report had been made.  If any material adjustments were required as a result of the final Audit Findings Report being issued, these would be reported back to the Committee.

Members noted that subject to sign off being achieved in advance of the backstop deadline this was likely to place Brent within the top 20% of local authorities having completed the process with members noting the unprecedented number of disclaimed opinions which it was anticipated would need to be issued for authorities under the backstop arrangements.  The Committee was advised that confirmation would be provided for all members once final sign off of the Statement of Accounts had been completed.

(4)      To recommend to the Audit & Standards Committee that the audit fees for 2023-24 be approved, as detailed in section 3.2.7 of the report.  Members noted this would include additional fees totalling £60,120 incurred as a result of the additional work required on Plant, Property and Equipment with the total fee payable therefore having increased from £515,639 to £575,759 and this confirmed as the final fee by Grant Thornton.