Mr Kevin Bartle, Interim Divisional Director for Finance, Procurement and Audit presented the progress report in relation to the external audit of the Council’s Statement of Accounts 2018/19.

Mr Bartle made clear to Members the report dealt with the present situation regarding the accounts and was seeking workable solutions to put right the issues rather than looking to criticise individuals or previous practices at the Council.

Mr Bartle said he was hugely disappointed the Accounts for 2018/19 were not in a state to be signed off, as he had hoped, for the January meeting.

He said regular meetings had taken place between the Cabinet Member for Resources, Councillor Candida Ronald and the Chair of the Audit Committee, Councillor Val Whitehead to update them with the progress made. Mr Bartle said going forward it was vital to prepare the Council for future final accounts preparation so that the new processes he was setting up become the norm for staff.

Mr Bartle drew attention to paragraph 3.3 and said a further matter had come to light which required significant work. The entries for school balances did not match correctly with the Accounts, so team members had spent a considerable amount of time to discover the reasons for the discrepancies. He said staff had to unpick, cross reference and reconcile each entry. Mr Bartle said there was a danger that the previous year’s accounts for 2017/18 could be reopened, however he hoped that it would not come to this.

Mr Bartle made reference to paragraph 3.4 onwards and provided an update regarding each area.

Mr Bartle answered a number of questions from Members relating to the significant items outstanding. In response to answers provided Members noted the following:

·         The issues relating to school balances concerned schools that had become academies. However there could still be a risk to the General Fund. Mr Bartle said a judgment would need to be made on if a prior year adjustment could be made or if the previous accounts for 2017/18 would require reopening. He said schools would also need to be informed.

·         Mr Bartle reassured Members there was no financial penalty for the late production of the accounts but there was reputational risk. He said whilst the accounts are very late, there were many other authorities in similar situations. The Ministry of Housing, Communities and Local Government (MHCLG) are aware that approximately one third of local authorities are late with their 2018/19 accounts. Reasons for lateness vary from the shortened timetable to produce the Accounts, resourcing issues and the change in external auditors.

·         In response to Councillor Francis suggestion the matter be referred to Full Council for a further debate, Mr Bartle reassured Members that in his view, it is unlikely that there would be direct intervention from Government. His view was that the worst case scenario was the external auditors issuing a ‘Report in the Public Interest’ which could raise concerns, although he thought its issue was unlikely.

The Chair thanked Mr Bartle for his update and said she very much hoped the accounts would be ready for sign off by the April 2020 meeting. Regarding the suggestion of referring this matter to Full Council, the Chair said this would not be beneficial as it would distract from the production of the accounts. She said Mr Bartle should be given the opportunity to present the accounts at the next meeting.

The Audit Committee RESOVLED to:

1.    Note the continuing progress made on the points raised by Deloitte in their report to the committee on 23^rd July 2019; and

2.    Note the emerging matter since the last report.