The External Auditors, Ernst & Young, will provide a verbal update to the Committee.

Adrian Balmer, an External Auditor with Ernst & Young, provided the Committee with a verbal update on the current audit and he advised the Committee of the three phases that had been developed to deal with the backlog agreed by the Department of Levelling Up and Communities and the Financial Reporting Council as follows:

• Clearing the backlog and historic audit opinions up to and including the financial year 2022/23. The original deadline for this was 30 September 2024, but this has been delayed due to the general election and upcoming legislation.
• Create backstop dates to mitigate against future backlogs of audits in future years.
• Addressing system challenges in the local audit system and embedding timely financial reporting and audit reporting deadlines.

Councillor Fry raised the point that for the 21/22 and 22/23 years, an external audit had not been completed. This was raised in the previous Audit and Governance Committee meeting and Councillor Fry asked about the assurances that could be provided by having an audit disclaimer.

The External Auditor responded that each time a delay occurred, it became increasingly difficult to get back into a workable cycle. This cycle is what they are currently working towards.

Councillor Fry asked when the deadline for the 23/24 audit is and Preeti Malik, an External Auditor with Ernst & Young, stated that she is managing the 23/24 audit and that they are looking to commence fieldwork for this in August and will be working on this through January 2025. The External Auditor stated that although there have been delays, they have a positive view for the 23/24 audit and the audit workshop they had earlier in the year, which educated on quality of audits and timely delivery, and which was well received. 

Councillor Smith stated that it was disappointing for the Committee to no have assurances for previous years’ accounts and asked when they expect to conclude the 23/24 audit and for further information on how that audit would be conducted.

In response the audit work will begin in August. She said that it will not be a light touch audit and that it will include a value for money examination.

The Financial Accounting Manager contributed to this discussion by stating that for the 21/22 and 22/23 years, a value for money evaluation will be undertaken and that this will continue into the 23/24 audit. It was also noted an added level of uncertainty because the backstop date has not been set and this date is unknown until the legislation comes out.

It was confirmed the 23/24 audit will be a consolidated audit of the Council and its companies.

A question regarding the fees for the 23/24 audit was raised by Councillor Smith and she asked if these would be higher than in previous years. The Financial Accounting Manager expected the fees for the 23/24 audit will be higherand assured the committee that further information regarding the fees can be found online.

The Committee thanked the external auditors and noted that they wished to be provided with a greater level of detail in the September meeting.

The Audit and Governance Committee noted the report.