Agenda item

To receive the report from the external auditors.

The Committee considered a report (Agenda Item 5) which provided Members with the draft audit findings report provided by Grant Thornton in respect of their external review of the 2019/20 Financial Statements. The purpose of the report was to consider the findings of the external auditors and any implications for the Governance and Ethics Committee in approving the financial statements.

Joseph Holmes introduced the report and noted that Item 5 and 6 were interlinked. He started with Item 6, which was the revised statements, and confirmed these were put on the Council’s website in August, in line with the statutory deadlines.

There were two opinions provided within the statements, one regarded the financial statements and the other related to the value for money; both of which the auditors had indicated would receive an unqualified opinion, albeit that there was still some work to be concluded.

There were some amendments made since the draft papers were produced at the end of August, and these were recognised within the report. The most significant of these related to an adjustment of £6m in relation to assets. The S151 Officer confirmed however that this was an accounting adjustment and would not affect the outturn position. Grant Thornton had provided an action plan and officers had provided responses.

The Chairman stated that in accordance with paragraph 7.12.4 of the Constitution he proposed from the Chair that standing orders be suspended in order to allow the external auditors to address the Committee. Councillor Jeremy Cottam seconded this proposal and the Committee voted in favour to allow it.

Barrie Morris from Grant Thornton discussed Item 5 and reiterated what Joseph Holmes said. In regards to their audit opinion, he stated that the reason for the delay was due to awaiting responses to a few queries from the financial team and the outcome of the audit of the Berkshire Pension Fund. He reiterated that even after the adjustment had been made they would be issuing an unqualified opinion on both the Financial Statements and the Value for Money audits.

He also noted that they were in a better position than they were the previous year in terms of certifying the 2020 accounts, despite the onset of Covid, and were quite close to concluding their audit opinion. He wished to place, on record, his thanks the WBC finance team who worked very effectively to help them achieve this.

David Johnson from Grant Thornton picked out a couple of key points and some of the issues they encountered. They were as follows:

• Page 14, one of the significant risks related to the valuation of land and buildings included in the Property Investment Portfolio where there had been double counting in relation to one of the assets and one of the assets had been incorrectly classified. It was also felt that it was necessary to reflect the uncertainty of the market arising from the Covid pandemic.
• Page 15, received a letter of assurance in which there were some issues that needed to be followed up on.
• Page 16, it was noted that there had been some issues with extracting data from the financial system which had meant that Officers had to extract some ad hoc data and reports from the system. The Council was however aware of the issue and were in the process of addressing the issues.
• Page 17, related to key adjustments with judgements rated as yellow and red; the reason for the red highlight was because the value was over materiality limits. The reason for the yellow highlight meant that there was an issue the Council needed to address.
• Page 23, in the previous year the external auditors had raised some issues around financial sustainability in relation to demand led services. This appeared to have improved during the current financial year.
• Page 28 was the action plan and assessment of risks response.
• Page 31/32 were issues that the auditors identified as not being adequately addressed and had therefore been carried forward.
• Page 33/34 were the adjustments that Joseph Holmes mentioned earlier.

David Johnson stated further, that the task was not an insignificant one and he thanked the finance team of Shannon Coleman-Slaughter, Joseph Holmes, Andy Walker and other relevant officers for their hard work and responding to their queries in a timely matter.

Councillor James Cole asked Grant Thornton representatives if they thought the accounts that were presented to them were reasonable. Barrie Morris confirmed that they were satisfied with the accounts.

Councillor Jeff Beck thanked both Barrie Morris and David Johnson from Grant Thornton for working so well with the team in these difficult times.

Standing orders were reinstated.

RESOLVED that the report be noted.