Agenda item

To receive a report from Grant Thornton (as the Council’s External Auditor) providing an update on external audit activity and relevant sector updates.

Sheena Phillips (Senior Audit Manager, Grant Thornton) was welcomed to present the update on progress with the external audit of the 2025-26 accounts. In presenting the report, Sheena Phillips highlighted the following key points:

·            On behalf of Grant Thronton, she passed thanks on to the relevant teams involved in working to get the 2024-25 audit published. The 2024–25 financial statements audit had been completed on 25 February 2026, following the presentation of the Audit Findings Report at the 3 February 2026 meeting of the Committee. On issuing the 2024–25 audit opinion, Grant Thornton had also finalised the Audit Findings Report and the Auditor’s Annual Report, with the final documents included in the papers for the current meeting.

·            In relation to Value for Money, work had commenced on the 2025–26 report. Grant Thornton had reported two significant weaknesses in the 2024–25 Auditor’s Annual Report: one relating to financial sustainability, specifically medium-term financial planning and the development of a pipeline of recurrent savings and income-generation schemes; and one under improving economy, efficiency and effectiveness, following the Council’s self-referral to the Regulator of Social Housing and the finding of non-compliance with the Safety and Quality Standard. It was confirmed that these prior-year weaknesses would be revisited as part of the 2025–26 Value for Money work to assess progress and determine whether further action was required.

·            Planning and risk assessment procedures for the 2025–26 audit had commenced on 9 March 2026. Details of the planned audit timetable had been provided to members by way of the letter from Grant Thornton to the Section 151 Officer, included as an appendix to the report, advising all clients of the need, by law, for the 2025-26 audit to be signed off by 31 January 2027. Grant Thornton was working with the Council to put in place procedures enabling the audit to be signed by the end of November 2026.

·            Grant Thornton had agreed with the Finance Team that Brent’s accounts would be received mid-June and encouraged officers to work to that date to ensure that the auditors had enough time to complete the audit in good time.

Having thanked Sheena Phillips for introducing the report, the Chair then moved on to invite questions and comments from the Committee, with the following issues raised:

·            Members raised questions regarding the quality of work provided by the Council’s valuer and whether this had improved since concerns had been raised at previous meetings. It was confirmed that work for the 2025–26 audit had not yet commenced; however, Sheena Phillips assured members that conversations had taken place with both the Finance Team and the valuer, which had provided assurance to Grant Thornton that the issues experienced during the 2024–25 audit should not recur and she hoped to see an improvement going forward.

·            Moving to the matter of the CIPFA Code changes to the accounting for non-investment assets for 2025–26, members enquired whether these changes would have an effect on the auditing of the accounts for that year. In response, members were informed that the effects of these changes had not yet been fully analysed by Grant Thornton. Sheena Phillips noted that once a risk assessment had been completed, the Council would be informed of Grant Thornton’s conclusions.

·            Regarding management action recommendations, members asked how the Committee would be kept updated on their progress. In response, Minesh Patel (Corporate Director, Finance and Resources, Brent Council) confirmed that officers could provide updates on those actions to the Committee outside of the formal meeting process as a matter of practice.

·            Clarification was then sought regarding the additional £10,000 in fees from Grant Thornton for the finalisation of other elements, with Sheena Phillips explaining that the figure provided in December had been a proposed fee. As a result of the work undertaken by Grant Thornton in January and February, together with previously unknown issues having been identified, the final fee for the audit had increased accordingly.

·            Members raised a concern regarding the external audit update identifying risks of significant weaknesses in Brent’s value for money arrangements relating to medium-term financial planning and the savings pipeline, and sought details of the specific internal controls that had been strengthened to ensure the quality of financial data, asking for assurances that this would not delay Brent in meeting the 2025–26 statutory backstop deadline of 31 January 2027. In response, Amanda Healy (Deputy Director, Investment and Infrastructure, Brent Council) assured members that the Finance Team had been working closely with other teams, including the Property Team, to address the issues identified during the 2024–25 audit. She particularly highlighted the work to address leasing, which had been identified as a particular area of delay. That work was ongoing for the wider Asset Register, and a number of steps were being taken to get more assurance around completeness of those registers. She confirmed that officers were actively monitoring this area and hoped to see significant improvement for the current financial year.

·            Members raised concerns about facing similar unplanned fee increases, and hoped that officers were working at pace to ensure accounts submissions were done on time to avoid additional audit fees. Members asked whether the Council received advance notice of fee increases before they were applied. Officers explained that they were informed of changes relating to the staffing requirements needed to support the development of work required for the 2024–25 audit during routine update meetings, with those updates subsequently reported to the Committee at its regular meetings. It was confirmed that the Council was in constant engagement with the auditors with the aim of achieving the original outcomes and that the auditors had supported the Council well throughout the year-end process.

As there were no further questions, the Chair thanked Sheena Phillips for presenting the External Audit Update Report and the Committee RESOLVED to note the report and the assurances received.