Agenda item

The Council’s external auditors presented the Audit Completion Report which summarised the findings from the 2023/24 audit.

The external auditor’s work on the financial statements was substantially complete and, subject to satisfactory conclusion of any outstanding work, they would propose issuing an unqualified audit opinion without modification. As part of the audit, the internal controls in place relevant to the preparation of the financial statements had been considered, as a result of this work a number of recommendations were made around internal controls that management made comment on. Further details were contained in page 20-31 of the auditor’s report.

In relation to misstatements in the accounts, there were four misstatements above the threshold of £100k, of these two misstatements had been amended in the final version of the Statement of Accounts. The unadjusted misstatements related to a valuation of a Council property that was deemed “optimistic” and the treatment of a historic transaction agreed by the Council’s previous auditors.

A full amended copy of The Statement of Accounts was included within the agenda for this meeting at item 7.

It was reported that the Council’s arrangements for securing economy, efficiency and effectiveness in its use of resources or ‘value for money’ were yet to be completed. At the time of preparing this report, no significant weaknesses in arrangements, that required a recommendation to be made had been identified.

As part of presenting this item, the external auditors took the Committee through each page of the report and highlighted any key issues, particularly with regard to:

• Audit Findings
• Key Changes to the audit plan
• Significant risks and other audit risks
• Audit risks and the audit approach
• Key accounting estimates and management judgements – overview
• Value for money

Members discussed the content of the report, commented, asked questions and received relevant responses as follows:

Question: Reference was made to the unadjusted misstatement which related to the valuation of a Council property that was deemed “optimistic” and the treatment of a historic transaction agreed by the Council’s previous auditors. Why did the valuation for the investment property differ so much? Previous external auditors had agreed with the valuations.

Response: The audit was a first-year audit. External auditors used their own valuation specialist who felt the yields used on the property, based on type and location, was slightly optimistic. When fed into the calculation, it came out at approximately £300K. Valuation specialists had access to the latest data and possibly a better range of data whereas internal valuers may not have the same access to live data. Subject to variants, numbers of such size were almost expected to see a difference. When accounts were considered, evidence of benchmarking was required to ensure happiness with the yield used.

Comment: Rashpal Khangura, KPMG requested his thanks and support to the finance team and other Council officers, be formally recordedfor the work and communication that had taken place.

RESOLVED that:

1)    The Financial Statements be recommended to Executive and subsequent referral to Council for approval.

2)    The draft letter of representation on behalf of the Council be approved, before the external auditors issue an opinion, conclusion and certificate, and that any further amendments to the letter, should any additional issues by raised by the external auditors be delegated to the Chief Finance Officer and Chair of the Audit Committee, with any changes reported back to the Audit Committee.