Agenda item

Reporting Person – Steve Bladen (BDO) and Leigh Clarke

The Chairman welcomed Steve Bladen of BDO to the meeting. 

Steve reported that work was still taking place on the External Audit of the 2019/20 Statement of Accounts and that the main areas outstanding were the Minimum Revenue Provision (MRP) and the consolidation of the Group accounts.  The Committee was advised that BDO had previously received the legal advice sought by the Council on MRP and that the view of BDO was in alignment.  The remaining step would be for the Audit Partner to consider whether the Council held a prudent level of MRP.  There had been little progress on the Group accounts as it had not been possible for the subsidiaries’ Auditor, Hamlyns, to meet BDO over the Summer so that its valuations and working papers could be reviewed.  Also outstanding were the review of the recoverability of loans to the Council’s subsidiaries, which would be included in the consideration of MRP, and the overall value for money and resources conclusion.

The Chairman stated that it was deeply disappointing that little progress had been made since the last meeting in July and stated that the update report was almost identical to the previous version.  Leigh Clarke, Director of Finance, reported that a meeting would be arranged shortly with BDO, Hamlyns and the Council shortly to gain clarity for both parties, with an update being provided at the next meeting of the Committee.  Following a question by the Chairman, Steve stated that it was hoped that the review of the MRP would be completed by the next meeting.

Members expressed concern over the impact of changes required to the 2019/20 accounts on the two full years that followed.  Kevin Foster, Strategic Director for Corporate Resources, stated that it was difficult for the Finance department to deal with queries regarding matters from two years ago whilst carrying out its usual functions.  Steve stated that once the main two areas outstanding had been settled, it would alleviate some work from the Audits of the remaining years, noting however that Thameswey carried out some valuations on an annual basis and the Audits would not be carried out in parallel.

Steve reported that BDO had been appointed by Public Sector Audit Appointments to carry out Audits until the end of the 2022/23 Statement of Accounts and the organisation had not participated in the bidding process for the subsequent years, as it had not been felt prudent to take on further work at the present time with BDO committed to completing the Audits it had been assigned.  Following a question by the Chairman, it was stated that BDO would remain sufficiently resourced to complete those Audits.

It was noted that BDO could not provide a date by when the 2019/20 Audit would be signed off.  Members felt that a new section in the update report on work not yet completed would be helpful.

The Chairman reported that at the last meeting a discussion had been held on the sending of a letter expressing the concerns of the Council and following discussions it was felt that it should be addressed to Neil Harris, the Head of Local Audit at the Financial Reporting Council (FRC).  A draft letter was being prepared and would be agreed with the Chairman, Leigh Clarke, the Chief Executive and the Leader or Portfolio Holder.  It was expected that it would be reported to the Committee at its meeting in November that the action had been completed.

The Chairman stated that the Committee could not keep being supplied with update reports stating little progress had been made and what was particularly disappointing was that it seemed the majority of the work had been undertaken, with the management sign-off still outstanding, and so the position was becoming untenable.

RESOLVED

That the update be received.