Agenda item

To receive the independent external auditors, Ernst &Young (EY), Annual Audit Letter for 2018/19.

Members considered the Annual Audit Letter 2018/19 report presented by Mark Hodgson from Ernst & Young (EY).

Members asked questions, made comments and received responses as follows;

1.    Councillor Booth asked for assurance that the delay experienced in this year’s audit will not occur again. Mark Hodgson confirmed that there is no audit deadline contained within UK regulations. The only requirements are that local authorities must publish a draft set of accounts by 31 May and the final accounts by 31 July. If the audit report is not completed by 31 July, this must be stated. He confirmed that the Council had met these requirements and no further action was required. He added that Audit Regulators had informed EY that audits are to be carried out when resources are in place to deliver a quality audit and they have gained sufficient assurance to deliver an informed opinion. He confirmed that EY are liaising with their clients to agree a suitable date, when resources are available, to complete audits from May onwards.

2.    Mark Hodgson informed members that the Ministry of Housing, Communities and Local Government (MHCLG) are considering deferring the 31 July deadline this year.

3.    Peter Catchpole stated that it is anticipated that the Council’s audit will be completed by September 2020. Mark Hodgson confirmed this and stated that on the basis of there being no deadline; EY will be conducting their audits over a longer period to ensure adequate resource to all of their clients.

4.    Councillor Booth highlighted that whilst there may be no deadline, presumably accounts cannot be signed off years after being published. Mark Hodgson agreed and confirmed that the accounts are signed off as soon as EY have assurance. If EY cannot perform this during their allocated timescale, then he agreed that this should be raised as a concern.

5.    Mark Hodgson assured members that EY’s focus is on completing audits with the resource allocated in the timescale agreed.

6.    Councillor Wicks asked what mitigation is in place if the audit is not completed by September. Mark Hodgson reiterated that there is no legislative requirement for audits to be completed within a certain timescale.

7.    Councillor J Clark agreed but highlighted that officers are impacted by audit delays and asked that every effort is made to keep to the agreed timescale. Mark Hodgson agreed and added that delays impact not only the Council but staff at EY too.

8.    Mark Hodgson confirmed that EY will be confirming audit dates with all of their clients by 14 February 2020. He informed members that EY will be holding a forum later this month and extended an invitation to all members of the committee.

9.    Councillor Booth asked if Mark Hodgson had been briefed of the Council’s new Commercial Investment Strategy (CIS) and asked what impact this would have on future audits. Mark Hodgson confirmed that he had been briefed on this and whilst it would not effect this year’s audit, it will impact future audits

Councillor J Clark thanked Mark Hodgson for his attendance at today’s meeting.

The Corporate Governance Committee noted the Annual Audit Letter 2018/19 report.