Mr Kevin Bartle, Interim Corporate Director for Resources and Section 151 Officer introduced the report and stated this was a significant milestone for the Council with the end point in sight. He said this had been the most thorough audit he had been involved in.

Mr Bartle thanked the staff involved in resolving the accounts for the previous years and said this had been a mammoth task, with interim staff recruited to assist in correcting the errors. He also thanked Deloitte for their patience and diligence, in particular Mr Gooding, Mr Fish and Mr Ross who had worked hard to highlight issues and had worked with the Council to get to the position where the accounts had been published. Mr Bartle said that after two years, Deloitte’s were able to give an opinion on the accounts of the Council. Mr Bartle said whilst the opinion was a qualified opinion and staff were disappointed with this - they take this outcome seriously, as this is a question of professional pride – they accepted the opinion given. Mr Bartle said going forward, as the Finance Improvement Plan will show, policies and procedures had been tightened to ensure learning from the accounts can be embedded for the future production of the accounts.

Mr Bartle said he was pleased to inform the Committee that the 2020/21 accounts had also been published as of today. He said that due to the work involved for the 2018/19 and 2019/20 accounts, this had had a knock-on effect on the 2020/21 accounts. He said the errors found in the 2018/19 and 2019/20 related to past years and therefore it was not easy to go back and correct all of them. He said the versions in front of the Committee were the ones published in October 2021. He said they required finalisation, once one or two further amendments had been made, which were not significant or material. Mr Bartle said the report provided members with a detailed response to the external auditor’s report and he’d be happy to take questions relating to this.

In relation to some of the questions raised by members during the Deloitte presentation, Mr Bartle made the following comments.

• He hoped future accounts would have none or fewer errors in them. Additional staff had been recruited to correct the errors and learning from this was being embedded into new practices within the finance team and the Council more widely. Mr Bartle said it was important to ensure the transfer of knowledge was not lost when staff moved or left the Council.
• In respect to the qualification issues raised, Mr Bartle said he did not disagree with the recommendation of group accounts however this was subjective opinion and was not a requirement of the previous external auditors KPMG.
• The remuneration of officers and employees working for subsidiary entities sounds worse than it is. Mr Bartle said he was confident that with a little bit of effort the reconciliation of school payrolls with the Council’s, was achievable.
• In respect to the ‘use of resources’ judgment, Mr Bartle commented the accounts had taken a long time to produce however they were on the road of improvement. The production of the 2020/21 accounts had improved dramatically.
• Lastly, Mr Bartle said the majority of issues related to disclosure issues and working papers that were inadequate or where things were incorrectly categorised. He said this did not affect the mid-term financial planning process or the council budget setting process.

In conclusion, Mr Bartle said 91% of Councils this year, had not achieved the statutory deadline to have their accounts signed off and this clearly was an issue for the Government to look at. He said he did not expect to come back to the Committee with the 2018/19 and 2019/20 accounts unless there were significant issues. He said these would be signed off under delegated authority with the consent of the Chair of the Committee.

In respect to the certificates relating to 2016/17 and 2017/18 accounts, Mr Bartle said they were in advanced conversation with KPMG and once the due diligence work had been completed, he was hopeful the certificates would be issued.

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

• Councillor Whitehead commented that the valuation of assets was a lot of work and whilst these should be valued there was a view on how effective this was given the assets are not going to be sold. Councillor Whitehead said the Council was not an exception when it came to the number of resources required to produce the accounts and said this was being felt throughout the sector.
• In response to how long it would take to attain the certificates from KPMG, Mr Bartle reassured the Committee they were in advanced stages of discussion and that he was hopeful these would be provided once a couple of things had been finalised. Mr Bartle said he did not know how much the cost would be to the Council for the additional work undertaken by KPMG.
• In response to what the timeline was to achieve a set of accounts without qualifications, Mr Bartle said the aim was to ensure the 2021/22 accounts were unqualified. He said this as a challenge for him and his team, but this was the aspiration.
• Councillor Edgar commented on the report and said it was clear and provided useful linkage to the Finance Improvement Plan.

The Chief Executive, Mr Will Tuckley and the Mayor John Biggs were also present for the meeting and thanked the staff as well as Deloitte’s for the improvement journey made. Mr Tuckley said the improvement plan was part of the long-term goal of improving systems and process which had been identified by the independent review by Mr Worth.

The Audit Committee RESOVLED to AGREE:

1. In conjunction with reviewing the findings of the external auditor, Deloitte, presented separately on the agenda, to note the Council’s response.
2. Specifically, to note that the Council will be updating the Statements of Accounts for 2018-19 and 2019-20 as detailed within this report.
3. To delegate authority to the Chair of Audit Committee and the s151 Officer to sign off the final versions of the Statements of Accounts upon completion of agreed amendments (with the only exception being if, subsequent to this meeting, significant and material matters arise).