Mr Jonathan Gooding, external auditor from Deloitte presented their external audit report. Mr Gooding said the report provided an update on the audit years 2018/19 and 2019/20. The information within the report commented on various aspects of the audit, some of which was required under the standards. He said the report provided an update on the issues reported to the Committee in July 2019. It identified other issues that had arisen since and the significant risk areas that had been identified as part of the audit plan. Mr Gooding said the report also reported on the progress made, despite the pandemic, on the control recommendations and findings to date in terms of the status of the work in progress.

He said since the last meeting the more complex and challenging areas had been focused on and a great deal of work had been done by the authority in those areas, with the number of resolved issues and adjustments being made to the accounts. Mr Gooding said that through a ‘sprint’ approach, in the next few months it was hoped other outstanding areas would also be addressed and said the timetable for this was being developed with the authority. Mr Gooding added the report provided an update on the value for money conclusion and said he was expecting this to be a qualified value for money conclusion which specifically reported on the challenges and issues faced with financial reporting and weaknesses identified. Mr Gooding stated icons had been used in his report to identify any misstatements that had been corrected, uncorrected material items and areas of uncertainty.

In response to questions and comments from the Members the following was noted:

• Mr Jonathan Gooding stated the prospect of achieving the July deadline for the accounts was still possible however the timetable had slipped from when the Committee last met. He said the complex and challenging areas had been addressed however more issues had been identified. He said it was difficult to predict if the new issues were not going to impact on the final accounts, so there remained a risk to meeting the deadline.
• Regarding the adjustments made to prior year accounts and the figures involved, Mr Gooding referred members to page 39 of the agenda and said some big numbers were involved, the largest being in relation to property valuations. He said some adjustments would not impact the General Fund however some would have an impact on the balance sheet.
• Mr Kevin Bartle, Interim Corporate Director for Resources and Section 151 Officer commented that the finance team had done its best to assist members in understanding the difference between matters that won’t impact the bottom line and those that will. He referred members to pages seven and eight of the supplementary agenda and stated the team had set out the impact on the bottom line in the report. He said some numbers were significant, but information was provided in the supplement agenda.
• In response to the value for money work, which was on-going, Councillor Wood asked if the work also included property acquisitions that were made during those years. Mr Gooding said this work was progressing and that they’d be focussing more on the accounts audit by performing procedures and checking the arrangements particularly financial sustainability and governance. Councillor Wood stated he’d be interested in the value for money conclusion in the final report.
• Councillor Edgar thanked Deloitte for a thorough report  and stated that he found the report useful in understanding the impact on the general fund and reserves and whilst some large numbers were involved, it was important to ensure the accounts were correct as they impact on decisions made about services provided.
• Ms Webster, Independent Person asked if there had been a change in the council’s approach in preparing the accounts and what might be required in future years. Mr Gooding responded stating there had been a great deal of change over the past two years, with the expansion of the team, the focus on particular years of accounts and the learning that had come from the process as well as the leadership.
• Mr Bartle thanked Mr Gooding for his comments and added there was a separate report on the Finance Improvement Plan later in the meeting.

The Chair thanked Mr Gooding for his presentation.

The Audit Committee RESOLVED to:

1. Note the observations made within the report from Deloitte; and
2. Note the comments made by Committee Members