Decision details

Gareth Mills, Engagement Lead (Grant Thornton) presented a report which detailed progress in delivering their responsibilities as the Council’s External Auditor for the year ending 31st March 2021 and also provided a sector update.

Members’ attention was drawn to two key aspects within the report, one in relation to the proposed audit fee for 2020/21 and secondly, the proposed timetable for the 2020-2021 audit.

It was proposed that there would be an increase in audit fees for 2020-21 to £212,430. It was noted that both the Redmond Review and the Minister for Housing Communities and Local Government (MHCLG) had recognised the need to increase audit fees and as a consequence, MHCLG had made available £15m to local authorities to support the expected uplift in fees. The External Auditor in recognising that the fee was a significant uplift, pointed out that the increase in fees was consistent with discussions held with other local authorities. It was further reported that it was expected that the funding from MHCLG would offset the uplift in fees therefore, the net uplift for the Council resources would be nil. It was further explained that the detail of how the funding would be provided to each authority was unclear, but it was anticipated that funding would be paid to local authorities on a proportionate basis, with External Auditors billing the fee variation to the Local Authority who would then pay this in line with existing arrangements.

In relation to the proposed timeline for the completion of this year’s audit, the External Auditor advised that MHCLG has set an indicative date of 30th September 2021, however, given the challenging nature of the availability of specialist public sector external audit staff, the volume of local authority audits, the impact of the Covid-19 pandemic, remote working and the need to prioritise NHS clients earlier than the audit deadline of June 2021, it was anticipated that the target for completion of the Council’s accounts would be the end of October with a sign off of the accounts in November.  The External Auditor explained that this would mean that the Council would not meet the indicative deadline for completion of the accounts. He pointed out that this was not a reflection of the work of the Financial Management Team, or the Council, but was because Grant Thornton was unable to deliver the audit by the end of September.  He emphasised that there would be no financial penalty to the Council.  He further explained that in accordance with the audit regulations the Council would need to post a brief statement on the Council’s website to the effect that as at 30 September the audit was still ongoing.

In relation to the consultation regarding allocation of the £15m funding, the Assistant Director of Finance advised that an update on the outcome of the consultation would be provided to the Committee at a future meeting.  The Assistant Director of Finance highlighted that the Financial Management team would endeavour to continue as in previous years to meet the indicative deadline, but pointed out that this year’s accounts placed greater emphasis on the use of estimates which brings additional risks.

RESOLVED that the External Auditor’s progress report and sector update(Year Ending 31st March 2021), be noted.