Agenda item

To receive the Annual Governance Statement (AGS) and Annual Financial Report (AFR) for 2022/23.

Ms C Mellons, Audit Partner, Ernst & Young LLP, was in attendance for consideration of this item.

A report by the Corporate Director (Finance and Resources) was submitted (a copy of which is appended in the Minute Book) which outlined the processes for finalising and publishing the Council’s Annual Governance Statement and Annual Financial Report for 2022/23.

In introducing the report, the Corporate Director (Finance and Resources) paid tribute to the Chief Finance Officer and her team for their hard work in finalising the accounts. Attention was then drawn to a number of minor changes which had been made to the Statement of Accounts 2022/23 and the Management Representation Letter 2022/23 since the agenda was published (a copy of which is also appended in the Minute Book).

Ms C Mellons, the Council’s Audit Partner was then provided with an opportunity to present the Completion Report for those Charged with Governance including the draft Audit Report. In doing so, the Committee’s attention was drawn to the disclaimed audit opinion and value for money commentary.

Questions were raised by Councillor A R Jennings querying the number of local authorities receiving disclaimed audit opinions and whether or not the Council would be in a similar position again with the 2023/24 accounts. In terms of the latter, he specifically queried how long the recovery phase would be and whether the resourcing issues within the audit sector remained a challenge. Ms C Mellons responded that over 400 disclaimed audit opinions had been issued and that a number of external factors influenced the recovery phase such as CIPFA and National Audit Office guidance. It was however acknowledged that the recovery process would be a difficult task and that a cross-party working group had been set up with partners to address these issues. In terms of the 2023/24 accounts, it was noted that the number of audits had been reduced in line with the framework which would hopefully relieve some of the ongoing audit resource pressures.

Councillor J A Gray queried what sensitivities/analysis had been placed by the auditors upon the 2022/23 accounts, a time when the Council had changed its political administration. Ms C Mellons undertook to investigate the matter with the previous Audit Manager and report back to the Chair outside of the meeting. She did however inform the Committee that a standard work programme would have been followed to review the budget and approvals process. A subsequent question was then raised on whether there were any concerns that the auditors wished to raise with Committee Members. The Corporate Director (Finance and Resources) reported that going forward, there would be an opportunity for the Committee to hold private meetings with the Internal Audit Manager and External Auditors. Ms C Mellons responded that if there were any significant concerns, these would have been raised with the Corporate Director (Finance and Resources) and Chief Finance Officer directly.

In response to a question raised by Councillor A R Jennings, assurances were delivered by Ms C Mellons and the Corporate Director (Finance and Resources) that no further delays were expected with finalising the 2023/24 accounts which were due to be presented to the Committee at its January 2025 meeting.

Councillor A R Jennings then expressed his personal and professional view that the weakness which had been identified relating to the delays with the publication of the draft accounts was not regarded as significant and felt that this could be better reflected within the External Auditor’s report.

Whereupon, the Committee

RESOLVED

(a)  to receive and discuss the Completion Report for Those Charged with Governance 2022/23 (Appendix 1);

(b)  to approve the Annual Governance Statement (Appendix 2) and authorise the Executive Leader and Chief Executive Officer to sign the Statement on behalf of the Council;

(c)  to approve the Letter of Representation (Appendix 3) and authorise the Corporate Director (Finance and Resources), as Section 151 Officer to sign it on behalf of the Council;

(d)  to give delegated powers to the Chairman of the Committee and the Corporate Director (Finance and Resources), as Section 151 Officer to authorise and sign the Annual Financial Report for 2022/23 (Appendix 4) on behalf of the Council; and

(e)  to give delegated powers to the Corporate Director (Finance and Resources) in conjunction with the Chairman of this Committee, to ensure that any minor amendments to the statement of accounts are completed before final publication.