Agenda item

The Committee considered a report which sought approval of the Council’s audited Statement of Accounts 2019/20, as attached to the Appendix to the report and the key issues that the Committee should consider before the External Auditor issues their opinion of the financial statements.

Rob Isaac, Financial Planning and Control Manager introduced the report. It was highlighted that since the unaudited accounts were presented to the Committee in July, whilst there had been no significant changes made to the accounts, the ISO 260 providing a summary of the key aspects of Grant Thornton’s work had been updated. It was noted that overall, the report was a positive one, with 5 adjusted misstatements made to the accounts relating to Pension Fund liability and group consolidation of Doncaster Children’s Services Trust.  Whilst Grant Thornton had not concluded the audit, it was anticipated that there would be no major issues identified. In these circumstances, it was recommended that the Chief Financial Officer in consultation with the Chair sign off any changes.

Grant Thornton presented the ISO 260 report, detailing the key aspects of the external auditors work for the 2019/20 audit of the statement of the accounts. The Engagement Lead highlighted the key headlines from the executive summary, in particular regarding the work on the accounts this year had been impacted by the Covid-19 pandemic, which had resulted in the audit taking longer than anticipated to complete, due to the audit of the accounts being done remotely which had been a challenge. It was noted that the audit was nearing completion, subject to the completion of outstanding matters in respect of the Pension Fund Liability and Group Consolidation accounts for Doncaster Children’s Services Trust,as detailed on pages 3 and 4 of the ISO 260 report. Grant Thornton had raised a small number of recommendations arising from the audit, as detailed in the Action Plan at Appendix A.

It was anticipated that Grant Thornton would give an unqualified position, subject to assurance being provided from the Pension Fund auditor in relation totheir work on the South Yorkshire Pensions Fund and the material uncertainty in relation to the valuation of the Council’s assets as a direct result of Covid 19, which was not a unique risk to Doncaster. The External Auditor concluded by stating that it was anticipated to give an unqualified Value for Money conclusion for 2019/20 which detailed work in relation to the Council’s financial standing and the Council’s preparations for Brexit.Furthermore, the Council had not had to exercise any additional statutory duties.

Following the presentation of the report, the Chair on behalf of the Committee commended representatives from Grant Thornton and Officers of the Council for their work in challenging circumstances.

It was noted that due to the impact of Covid-19 and the audit being carried out remotely, the time taken to deliver the audit has significantly increased. The proposed variation in fees to cover this additional time was due to the additional work relating to the impact of Covid-19 and group consolidation work, which would need to be approved by the regulator the Public Sector Audit Appointments Ltd (PSAA). It was reported that the fees would be included in the Audit Letter which would be submitted to the Committee in January 2021.

In response to concerns raised by a Member with regard to 5 adjusted misstatements, in particular, the omission of the opening pension liability of £14.2m in the group accounts and the under recording and external income and expenditure of £4.5m, for the Doncaster Children’s Services Trust (DCST), it was explained that this year was the first year that DCST Group accounts had been incorporated in to the Group accounts. This had resulted in further complications due to the accounting policies regarding the Pension liabilities being different for the Trust compared to the Council’s accounts. Therefore, adjustments had to be made to the accounts to make them consistent with the Council’s accounts when consolidated.

With regard to a further query regarding the erroneous inclusion of prior year comparatives for 2018/19 in respect of DCST, it was noted that when looking at the requirements of how to incorporate comparators in the accounts, the Finance Team had wrongly assumed that prior year comparators in respect of the DCST should be included in the accounts because the DCST had not been included in the group accounts last year. It was reported that prior year comparators had since been removed. Next year there would be prior year comparators and the opening and closing balances would be included where they should be.

In relation to a query regarding the recommendation from Grant Thornton in respect of the economic life of the Council’s land and buildings assets, it was noted that steps would be introduced in the presentation of next year’s accounts to ensure consistency between the Council’s asset register and the Councils accounting policy.

In response to a query from the Chair regarding the Local Code of Corporate Governance 2020/21, as appended to the report at Appendix B, the Head of Internal Audit confirmed that he was satisfied with the Code, which was consistent with the authority’s governance arrangements.

In respect of the Annual Governance Statement 2019/20, in response to a question from the Chair regarding the Data Quality arrangements within the Assistive Technology service, the Director of Corporate Services stated that she would confirm if the completion date of 30th November for this work would be achieved and report back to the Committee at a future meeting. 

With regard to a further question in relation to the Data systems in respect of the Children’s Services and Adult Services directorates, it was noted that the Go Live of the Children’s DIP system had been delayed. It was anticipated that the Adults Services system would Go Live from March 2021, however, it was reported that there would be a need to look at the activities taking place during the next few months to make sure that this date could be achieved.

Further to a question from the Chair, Grant Thornton confirmed that Council officers had willingly engaged and provided responses in a timely manner when asked for information to support their work in undertaking the audit.

In response to a question from the Chair regarding the robustness and sustainability of the Council’s finances, having regard to Covid-19, Members were advised that the Council’s position was volatile, adjustments were being made to the current budget, having regard to known commitments and that there would be further updates once the settlement from central Government was known. 

The Assistant Director of Finance wished to place on record her thanks to Grant Thornton and the Head of Financial Management for their support in preparation of the accounts.

RESOLVED that

(1)      the contents of the external audit ISA 260 report, be noted;

(2)      the contents of the Letter of Representation attached at Appendix F to the report, be endorsed for signature by the Chair of the Audit Committee and the Chief Financial Officer;

(3)      the Statement of Accounts 2019/20 for the year ending 31st March 2020, as appended to the report, be approved;

(4)      the Annual Governance Statement 2019/20, as attached to the report at Appendix C, be approved for signature by the Mayor and the Chief Executive; and

(5)      authority be delegated to the Chief Financial Officer and Assistant Director of Finance, in consultation with the Chair, to agree any adjustments to the Statement of Accounts 2019/20, following the completion of the audit by Grant Thornton, should any changes be necessary, prior to signing by the Chief Financial Officer and the Chair of the Audit Committee.