To receive a verbal update from the extenal auditors.
Minutes:
54.1 A representative of Delloitte attended the meeting to provide a verbal update to the Audit and Governance Committee.
54.2 The Chair stated that he had hoped to see a report on the 2021/22 accounts at the meeting. He asked when the report would be completed and whether there were any issues that had arisen. The Head of Finance & Resources stated that he believed it would be useful for the representative from Deloitte to give a verbal update to Members for clarity on the position in relation to the 2021/22 accounts.
54.3 The external auditor stated that the backstop date was scheduled for the end of September 2024. She stated that the consultation had not closed yet, noting that while the consultation process had not ended, it was expected that Deloitte would be expected to complete the Value for Money (VFM) audit as a priority. She stated that Deloitte was looking to see what the consultation meant in regards to resources and prioritisation that would be required. The external auditor advised that as a minimum, there would be a priority to complete the VFM audit before 30 September 2024.
54.4 The Chair asked if this meant that the date to publish the 2021/22 accounts had been pushed further back. The Head of Finance & Resources stated that it was not a static figure and that it had been moved back to the September deadline (subject to legislation).
54.5 In response to a question by the Chair in relation to where the finance team were in getting the accounts for 2021/22 signed off, the Head of Finance & Resources stated that this was still to be determined as a response to the consultation.
54.6 The Chair asked if the VFM audit was nearly complete and whether it was likely that a related report would come before the Audit and Governance committee at the next meeting (July 2024). The external auditor replied that this was the intention.
54.7 In response to a question about what the plan was in relation to the accounts for the financial year of 2022/23, the Head of Finance & Resources stated that the plan was to produce the accounts as soon as was possible. The accounts would then be subject to public consultation.
54.8 The Chair noted that there had been an intention to get a draft version of the accounts for 2022/23 before the May 2024 Local Elections. He asked whether this was still the intention. The Head of Finance & Resources responded that this was correct.
54.9 The Chair asked if there were any issues with the accounts thus far. In response, the representative of Deloitte stated that they had not commissioned that piece of work yet. She stated that they were waiting for the consultation date to be finalised.
54.10 In response to a question by Councillor Gravells, the Head of Finance & Resources stated that he would be submitting a response to the Consultation for the City Council and that he would provide a link to the consultation to the Audit and Governance Committee.
54.11 In response to questions by Councillor Patel and Bowkett, the Head of Finance & Resources stated that there were a number of issues regarding the local government audit backlog. He mentioned that the consultation was aiming to move away from the backlog. The Head of Finance & Resources further noted that Gloucester City Council was one of numerous authorities in a similar position regarding the non-audited accounts. He explained that the Cyber Incident was a significant factor in the delay of publishing the 2022/23 accounts as they were working to restore the system.
54.12 In response to Councillor Patel’s question regarding the consultation process, the Head of Finance & Resources stated that there had been a meeting earlier in the week, which provided an update for the four bodies responsible for the consultation. He confirmed that he would share the consultation with the committee, should they wish to review it and provide any potential responses.
54.13 In response to points raised by Councillor Gravells, the Head of Finance & Resources stated that he would draft the response to the consultation and would share it with the Chair and Vice-Chair of the committee before sending it.
54.14 The Deloitte representative noted that it was important to highlight that the backlog for Gloucester City Council was predominantly due to the Cyber Incident.
54.15 In response to points raised by the Chair, the Deloitte representative clarified that the drop-dead date at the end of September applied to all open years, including the accounts for 2022/23. She further clarified that anything not completed by that time would result in a disclaimer audit opinion.
54.16 In response to concerns raised by Councillor Bowkett in relation to the delay, the Head of Finance & Resources noted that the Council would be transitioning auditors by engaging a new company to complete audits. He stated that Bishop Fleming would be handling the 2023/24 audit. Therefore, they would need to wait for the 2021/22 and 2022/23 accounts to be signed off before conducting work on the most recent financial year.
54.17 In response to a question by Councillor Patel regarding whether there were financial penalties for not signing off the accounts, the Head of Finance & Resources stated that there were none and that the issue was common across the sector.
54.18 RESOLVED that the Audit and Governance Committee note the verbal update.