Agenda item

The paper provides the Audit and Standards Advisory Committee with a report on progress in delivering Grant Thornton’s responsibilities as the Council’s external auditors. It also includes a summary of emerging national issues and developments that may be relevant to Brent as a local authority.

Sophia Brown (Grant Thornton) introduced the report, presenting the external audit progress report to the Committee. She confirmed that the audit plan previously brought to the Committee was now final with no further changes required, as no additional risks or risk factors had been identified during planning closure. The key highlights of the update to the Committee are summarised below:

·            The auditors had commenced fieldwork on 16^th of June 2025 in the absence of draft financial statements from the Council, working with the finance team on areas where progress was possible. Sophia Brown explained that while there was always risk in starting work before receiving draft financial statements, management had provided assurances that the listings being worked on would not change. If balances did subsequently change, additional testing might be required in those areas. Sophia Brown noted that Grant Thornton’s PFI expert on accounting was still to return to work, which added stress on top of the work required for IFRS 16.

·            The auditors were working closely with the finance team to receive updates on when draft accounts and the Property, Plant and Equipment (PPE) note would be available. The biggest pieces of work that could not yet commence were the PPE valuation work and journals testing. To manage resources effectively, some team members had been released in recent weeks to avoid waste, with plans to bring people back once draft accounts were received on Friday.

·            Sophia Brown then highlighted that the PPE note was a key component touching different areas of the accounts. She emphasised the risk to completing the audit by the September deadline, explaining they were in week six of the audit with summer holidays approaching. Additional resources had been secured for October if the September deadline was missed, to avoid repeating the previous year's approach of returning in January. The auditors noted that the expected financial statements would contain several material prior period adjustments, and they were still awaiting expert input on PFI accounting treatment. Sophia Brown indicated that while meeting the September deadline would be very challenging, it remained doable if everything proceeded without any issues, though she cautioned against raising expectations too high.

The Chair thanked Sofia Brown and Grant Thronton for their work, and the floor was opened to any questions or concerns from members of the Committee, with the key highlights summarised below:

·            Regarding the account’s deadline, the Committee asked about the likelihood of meeting the September deadline. Sophie Brown responded, noting that it would be very challenging but possibly achievable if no issues arose, though she emphasised the substantial workload remaining and the impact of summer leave periods.

·            Following this, members sought clarification on the meaning of "value for money" within the audit progress reports context. Sophia Brown explained that their work followed the National Audit Office code, examining value for money under three areas: financial sustainability, governance, and the three E's (economy, efficiency, and effectiveness). Within this context ‘value for money’ would highlight areas where arrangements could be improved or where sector best practices could be applied.

·            The Committee inquired over the three expected material prior period adjustments in the draft accounts with Ben Ainsworth (Head of Finance) explaining in response that these related to leases and property, plant and equipment, each over £20 million. He then noted that these would impact unusable reserves rather than usable reserves, meaning they had no effect on council taxpayers or service provision resources.

·            Moving the discussion on, members asked about the auditors' other clients and whether delayed accounts elsewhere would affect Brent's audit priority. Sophia Brown confirmed that under backstop arrangements, all authorities were up to date (some with disclaimed opinions), and emphasised Grant Thornton’s desire to maintain Brent's record of unqualified opinions rather than risk facing the February 2025 backstop deadline.

·            In concluding the discussion, the Committee discussed potential October meeting dates, with the Chair noting that 21st, 22nd, or 23rd October were being considered as standby options, though no meeting would be scheduled until needed. Members were asked to reserve these dates provisionally. In addition to this, the Chair cautioned members that an additional meeting of the Audit and Standards Advisory Committee might be required for November 2025.

·            A final note was raised by Sophia Brown, informing the Committee that page 131 of the update report provided a link to Grant Thornton’s recorded webinar for Audit Committee members. Further webinars were being created with an up-and-coming session on the changes coming to IFRS 16.

The Chair thanked Sophia Brown and her team, along with Ben Ainsworth and the Finance Team, for their ongoing work, confirming that the September deadline remained the Council’s objective with October date available as a fallback position if required. With no further questions or comments raised, the Committee RESOLVED to note the report.