Agenda and draft minutes

To approve as a correct record the Minutes of the meeting of this Committee held on 16 July 2024.

RESOLVED that the Minutes of the meeting held on 16 July 2024 were approved as a true and correct record and signed by the Chairman.

To remind Members of the need to record the existence and nature of any personal, disclosable pecuniary or other registrable interests in items on the agenda, in accordance with the Members’ Code of Conduct.

There were no declarations of interest received.

Purpose: To consider the Forward Plan for the next 12 months.

The Committee considered the Governance Committee Forward Plan (Agenda Item 4).

The Executive Director - Resources noted that the Committee was expecting an External Auditor’s Report from Grant Thornton which would likely provide a disclaimer on the Council’s financial statements given the new backstop timetable provided by Government. This report was scheduled to come to the next meeting of the Committee on 19 November 2024. He also mentioned that the Council did not know what the detail of the disclaimer would look like.

Satisfied with the Forward Plan, and the amendments to lead officer details, the Committee agreed that it could be noted.

Purpose: For the Governance Committee to consider the draft audit plan for 2023-24 from the Council’s new external auditors, KPMG.

The Committee considered a report (Agenda Item 5) concerning the Draft Audit Plan for 2023-24 from the Council’s new external auditors, KPMG.

The Executive Director – Resources introduced the report and highlighted that the Draft Audit Plan set out the work being proposed to be completed on the 2023/24 accounts, as well as outlining some of the unknowns around possible disclaimed audits from previous years. He noted that KPMG were trying to get back to process whereby the Audit Plan would be presented before the external auditors began their work. The Executive Director – Resources also indicated that KPMG would be the Council’s external auditors for at least five years and were procured on the Council’s behalf by the Public Sector Audit Appointments (PSAA), and that almost every other local authority did the same.

Representatives from KPMG, Edward Mills and Jonathan Brown, introduced the report and highlighted that they had completed the interim and risk assessment work for 2023/24, and that it was summarised in their report. They outlined their responsibilities as external auditors and explained what they expected to be in the disclaimer about unaudited balances, predicting that this disclaimer would be in the next two years of accounts. The representatives then discussed the level of materiality for their audits, noting that any misstatements over £585,000 would be brought to the attention of the Governance Committee. Finally, they outlined the significant risks expected. The primary of these risks being over areas which required a value judgment, such as on land, buildings, investment properties, and pension obligations. Those risk areas would be key areas of focus for KPMG.

On a question about the state of the opening balances and the risks they could pose to the 2023/24 audits, the KPMG representatives emphasised that they were waiting for the detail about where the regulator would land on the issue. However, they clarified that a disclaimer had been agreed due to the delayed audits being a sector wide issue so this would not be unique to West Berkshire Council’s accounts.

Members asked about if KPMG had sufficient resources to bring to work on the Council’s audits as this was believed to be an issue with the previous external auditors. In response, the representatives indicated that KPMG had over 200 members of staff to cover all the Council audits in the region, plus offshore capacity and the ability to borrow staff from other areas should the need arise. They also informed the Committee that they had personal experience in dealing with local authority audits. For these reasons, KPMG assured the Committee that they had sufficient resources to conduct their audits in an effective and timely manner. In addition, if unforeseen and extra work was needed, they outlined the process whereby it would be discussed with the Council and the PSAA before a decision about extra costs would be decided.   

The Committee then discussed value for money in the external audits and noted that the external auditors operated differently from the Council in that  ...  view the full minutes text for item 4.