Agenda item

Agenda item

Draft External Audit Results Report for 2020/21

Report of: The External Auditor EY

Purpose of report: To provide an update to the initial draft External Audit Results Report on the outcome of the audit of accounts which was presented to the Committee on 20 October 2021

Recommendation: To discuss and note the report


Cllr Tiago Corais joined the meeting.

Maria Grindley, External Auditor (EY) introduced the report which provided an update to the initial draft External Audit Results Report on the outcome of the audit of accounts which was presented to the Committee on 20 October 2021.  She highlighted that work that had held up the audit had now been completed and that the audit was in the final stages of sign off.

The following was noted:

·       Errors identified in the treatment of Grants have now been rectified and the materiality revised as a result of additional testing across a number of significant accounts.

·       Delays in obtaining required information delayed the audit, however the reasons for this were recognised and this information will be included in the post-audit wash up discussion with officers to ensure a smoother audit process next year.

·       Final guidance supporting the WGA submission will not be available until later in the year, and an update will be provided at the October meeting.

·       Valuation of land and buildings is complete following an adjustment to the covered market valuation and is under final review.

·       Material errors found in the assessment of agent and principal in accounting for Covid-19 related grant expenditure has been reassessed and completed following additional testing across all significant accounts.

·       As a result of updated ISA 540 regulations, additional information was required for assessment of further reasonableness checks on gross liability.  EY Pensions specialists were satisfied that gross liability was within an acceptable limit and the IAS19 assurance letter from the auditor of Oxfordshire Pension Fund enabled this audit to be concluded, noting that the impact of these on OCC was not material.

·       Additional information in respect of Group Cashflows has been requested to complete the work on going concern and this will be updated to the Committee at the next meeting.

·       A review of the work by Wenn Townsend on OxWED and Mazaars on ODS, ODST and OCHL has been received which will finalise work on group consolidation to be reported to the Committee at the next meeting.

In response to a question from the Committee, Maria Grindley confirmed that the covered market valuation included PPE and investment property, and that whilst a sensible range was requested and valued, it was outside what was expected and therefore revalued.

Bill Lewis, Financial Accounting Manager, explained the difference between Agent and Principal for the Committee, highlighting how the issues evolved due to late guidance from the government on how these are accounted for within the Balance Sheet.  He confirmed that the Council relied on EY’s national experience for guidance on this and that these issues have now been accounted for correctly.

Maria Grindley explained how going concern is treated for in a local authority in comparison to the public sector and highlighted that there are still considerations to manage.  Nigel Kennedy, Head of Financial Services confirmed that medium term financial planning is reviewed monthly alongside the monitoring of the budget which would flag up any concerns.

The Committee noted the contents of the report and confirmed that delegation of signing off the accounts be given to the Chair of the Audit & Governance Committee.

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