Agenda item

Purpose: the report provides members with the interim audit report provided by Grant Thornton in respect of financial years 2021/22 and 2022/23.

The Committee considered a report (Agenda Item 7) concerning External Auditor's Interim Annual Report Financial Years 2021/22 and 2022/23. Ms Coleman-Slaughter introduced the report and Ms Sophia Brown provided a presentation from Grant Thornton.

Councillor Cottam asked why the audit had not been carried out and Ms Brown explained it was not her intention to abandon the Council adding that the team did not have enough time to review all of the accounts.

Mr Joseph Holmes explained that the Council was awaiting a government disclaimer, which would state the Council was not at fault for the lack of audit. Until the disclaimer was issued the new contractor, KPMG, could not carry out the work, which was forecasted to be in early autumn, however the work would not be carried out in time. Mr Holmes emphasised that West Berkshire Council was one of 30% of Councils to produce their figures on time.

Councillor Cottam exclaimed that the whole system was running blind through a difficult financial period and the lack of an external audit left the Council in a difficult situation. The Councillor questioned why the Council was not notified sooner.

Councillor Woollaston stressed that this was the second year of accounts not to be audited and wanted reassurance that KPMG would audit the accounts.

Councillor Cottingham reassured members that in a meeting with KPMG he was satisfied they had the correct provisions to deliver an audit. He reaffirmed that the audit was a critical part of Councillors financial integrity, which was important as they looked after public money. The Councillor criticised competitive tendering as a reason for the lack of deliverability and explained that Grant Throton was not able to carry out a light audit.

Mr David Southgate asked what the plan was going forward and Mr Holmes explained that the previous accounts are to be disclaimed, but the longer the Council has to wait the greater the risk of next years accounts not being done.

Ms Brown reasoned that Grant Thorton did not want to leave the Council behind and noted that only 25% of Councils had been audited. She explained that they could not do a light audit as this would go against legislation and that they were awaiting the wording for the disclaimer. Ms Brown stated that West Berkshire Council was in a better place then some Councils, because of the hard work of the Finance Team. 

Councillor Cottingham added that the lack of an external audit had an operational risk, as any external organisation looking to do business, may not want to take on a contract with a Council with unaudited accounts. He called into question how much work Grant Thorton had carried out in the period and questioned the effect the Council’s Financial Review Panel had on curbing the overspend.

Ms Brown stated that the team that carried out the Value for Money work were separate from the audit team and that it had been noted that the tightening of budget controls had been effective.

Councillor Cottam asked about the recommendations within the report and Mr Holmes stated that these were what the report noted as being discussed within the Council.

Councillor Cottingham explained that long-term and short-term borrowing required a balance that would depend on the interest rates available from the public works board and that a good balance would be healthy for the accounts.

Councillor Stephanie Steevenson asked whose responsibility it was to act upon the highlighted problem areas for overspend. Mr Holmes explained that the areas highlighted were from an internal report and that these were reviewed quarterly by the Executive and Scrutiny Commission.

Councillor Cottingham emphasised the importance of financial efficiency and that the Council had a duty to be responsible as they were dealing with public money. The Council provided 700 services, and it was noted that they were looking at benchmarking to help improve the areas that are not delivering value for money.

Councillor Drummond queried whether the procurement waivers were to be seen by the Governance Committee and Mr Holmes confirmed that the waivers were not part of the terms of reference, but they would go to the Executive.

The Chairman expressed that the current state of auditing was not acceptable a stated the Committee would write to Grant Thorton expressing dissatisfaction.

RESOLVED to note the contents of the report.