Agenda and minutes

The Chief Executive reported that no questions had been received under Standing Order 34.

The Chief Executive reported that no questions had been received under Standing Order 7(3) and 7(5).

There were no urgent items for consideration.

The Chairman invited members who wished to do so to declare any interest in respect of items on the agenda for the meeting.

No declarations were made.

The Committee considered a report of the Director of Corporate Resources which set out the key findings from the external audit of the 2020/21 financial statements and sought approval of the draft letters of representation to Grant Thornton UK LLP, the County Council’s external auditors. A copy of the report marked ‘Agenda Item 5’, is filed with these minutes.

The Chairman welcomed Barrie Morris, Auditor Director, and Andy Reid, Senior Manager (Audit) of Grant Thornton UK LLP, the County Council’s external auditors, to the meeting.

In presenting Grant Thornton UK LLP’s audit findings, Barrie Morris and Andy Reid further reported that:

(i)     Some final testing was still required in order to conclude the audit. However, no significant issues were expected to arise from this work and it was therefore anticipated that the Council would receive an ‘unqualified’ audit opinion overall.

(ii)    Conducting the audit had been particularly challenging this year due to the impacts of Covid-19 on normal working practices, the introduction of the Council’s new accounting system, and the increased level of audit testing required by national auditing standards. Increased requirements on External Auditors from the National Audit Office (NAO), also meant a new approach to examining journals had been required to be introduced and the undertaking of a technical ‘hot review’ of the Council’s accounts to ensure they were fully compliant with the NAO Code of Audit Practice.

(iii)   The audit of the accounts required two adjustments to be made.  Details of these had been included in the final financial statements, as follows:

a.  Additional information had been included in ‘Note 2’ (the presentation of the expenditure and funding analysis), to show how this reconciled back to the MTFS outturn position previously reported to the Cabinet to ensure consistency.

b.  Amendments were required to ‘Note 20’ (financial instruments note) for the year 2019/20 and 2020/21. It was confirmed that Grant Thornton was satisfied that the restated figures were now correct.

The Director advised the Committee that as the issue outlined in (b) above had warranted a ‘prior period adjustment’ to be made, it had been necessary for the Council to include an additional representation in its letter to Grant Thornton which was attached (Appendix B to the report) as follows:

‘xiv. The prior period adjustments disclosed in Note 20 to the financial statements are accurate and complete. There are no other prior period errors to bring to your attention.’

(iv)   Due to the challenges outlined above, the work to enable a VfM opinion to be made had been delayed (now expected by the end of January).  This had been recognised by the NAO. 

(v)    In line with the Audit Plan the level of materiality in respect to the County Council’s accounts had reduced slightly since 2019/20. This reflected the impact of the implementation of the new Oracle Fusion general ledger and enhanced risk arising from that.  Whilst one significant control deficiency relating to the segregation of access in the new Oracle Fusion Finance System had been identified as part of the audit, Grant Thornton  had been satisfied overall that the transition to the new system had been a well-controlled process with no adverse impacts on the accounts. 

(vi)   Some ‘must do’ requirements as set out in the new CIPFA guidance for local government pension scheme funds to prepare their annual report had been identified as not being included in the 2020/21 Pension Fund Annual Report (PFAR). Whilst the missing disclosures did not impact on Grant Thornton’s opinion of the PFAR, it was necessary to bring them to the attention of this Committee and the Local Pension Committee and  ...  view the full minutes text for item 49.

The next meeting is scheduled to take place on Friday 28^th January at 10.00am.

RESOLVED:

That the next meeting of the Corporate Governance Committee be held on Friday 28th January 2022 at 10.00am.