Decision details

Audit Update Report

Decision status: Information Only

Is Key decision?: No

Is subject to call in?: No

Decision:

Paul Harvey attended the meeting on behalf of Grant Thornton (External Auditor) and provided an audit update report which stated that Grant Thornton’s audit planning for 2021/22 financial statements had been delayed due to outstanding legacy council audits. It was stated that this had also had an impact on the Council’s ability to prepare financial statements for 2021/22.

 

Planning work has been undertaken by External Audit in relation to:

 

·       Preliminary going concern assessment

·       Review of the journal control environment

·       Review of the IT environment

·       Gained an understanding of some businesses processes for significant transactions in the financial statements.

 

It was reported to the committee that work in these areas identified issues in relation to the IT and the Journal control environment. 11 significant deficiencies, 14 deficiencies and 3 improvement opportunities were identified in relation to the IT environment.  Majority of deficiencies related to legacy IT systems and risk mitigation had been identified and implemented.

 

An update was also provided in relation to the current backlog of Local Government audits where the Government is implementing a backstop. It was noted that the consultation period was due to commence imminently on a 30th September backstop date. Members heard that the backstop would require auditors to issue a disclaimed opinion on all audits up to and including 2022/23 that had not been signed off by September 2024.

 

External Audit were planning to commence planning work for the 2023/24 audit in February 2024 with an eye to present an audit plan to members of the Audit & Governance Committee at its next meeting in April 2024.

 

Members heard that North Northamptonshire Council was working with West Northamptonshire Council to disaggregate the closing balances of Northamptonshire County Council. Although both authorities have been able to agree a significant proportion of these balances there area a small number of areas whether there is a disagreement on how the balances should be split. For these areas the Council’s were seeking arbitration to determine the disaggregation. External Audit stated the matter as a significant weakness in their Value for Monney assessment of the Council for 2022/23 and raised concerns regarding the process.

 

It was heard that determination arrangements had been put in place following correspondence by both authorities to the Secretary of State. The Council was yet to receive a response regarding arrangements for next steps. Conversations remained ongoing with West Northamptonshire Council and Grant Thornton.

 

Grant Thornton issues their Value for Money arrangements for 2021/22 and were undertaking work on the arrangements for 2022/23. No significant weaknesses in arrangements identified but improvement recommendations were made in relation to financial sustainability, Governance and Improving economy, efficiency and effectiveness.

 

Members then received an update regarding Corby Borough Council legacy accounts. It was noted that the accounts were yet to be signed off by Ernst & Young (External Auditors). The accounts were yet to go through the professional review where there were five separate items under review. Three items had been completed and may potentially require minor disclosure changes.
Both officers and members declared their disappointment and concern regarding the delay in the accounts being signed off by external audit. It was also noted that the Northamptonshire County Council accounts had been signed off.

Publication date: 13/02/2024

Date of decision: 12/02/2024

Decided at meeting: 12/02/2024 - Audit and Governance Committee

Accompanying Documents: