To consider the external audit findings report for the year ended 31 March 2023.

The Director, Grant Thornton (DGT) presented the external audit findings report for the year ended 31 March 2023. The principal points included:

      I.         The post-statements audit commenced in early July 2023 in accordance with the original timeline.

     II.         Despite excellent corporation from the council’s Finance Team, due to a number of challenges particularly in relation to staff sickness Grant Thornton (GT) were not able to deliver the audit opinion on the financial statements by the statutory deadline of 30 September 2023 but good progress has since been made and the DGT confirmed their work was now complete.

   III.         Attention was drawn to the ‘Conclusion’ section (page 26 of the agenda) and it was reported that, since publication, all outstanding items had been completed and no new issues had arisen that needed to be brought to the committee’s attention.

   IV.         Strong assurance is evidenced within the report that the Council has affective arrangements in place to produce complete, accurate and timely accounts.

    V.         It was noted no material errors in the statements had been found.

   VI.         Attention was drawn to the ‘Audit Adjustments’ section (page 51 of the agenda) and it was reported that there had been a revaluation of Land and building assets of £4.7m, it was clarified the adjustment had no impact on the outturn for the year.

14:18 Cllr Oliver joined the meeting and confirmed he had no declaration of interests to declare.

 VII.         Attention was drawn to the ‘Financial Statements: Significant Risks’ section (page 28 of the agenda) a control weakness for the absence of formally documented evidence base review for larger journals had been identified.

VIII.         Attention was also drawn to the ‘Fees’ section (page 54 of the agenda) and it was noted that there had been a reduction of £3k to the final fees anticipated for 2022/23 due to the removal of costs associated with an auditors’ expert in respect of land and building and investment properties. It was highlighted that compared to the previous year 2021/22 there had been a reduction of £30k in fees.

In response to committee questions, it was noted:

1.     The DGT confirmed the level of borrowing by the council was not a concern.

2.     The Director of Resources and Assurance (DRA) would provide a list of the council’s “investment properties” to committee members.

3.     With regards to concerns surrounding pension liabilities the DGT explained it was not a particular area of focus but explained that the share of the assets held by Worcester pension fund was quite easy to calculate based on the contributions, the returns and the growth so the assets allocated to Herefordshire could be quantified reasonably. Assurances are sought from the pension fund auditor about the arrangements in place and written evidence to support it acquired.

The DRA expressed his thanks to the DGT and the GT team for their work on what was thought to be a good audit given the challenges the GT had experienced within their team.

It was confirmed the letter of representation would be signed by the DRA and unless the DGT received any further information from the council that might impact the opinion, then he would sign and issue an unqualified opinion on 25 October 2023.  Herefordshire Council would be the first unitary authority in the country to have their accounts signed-off as being ‘true and fair’.

Resolved:

That the report of the external auditor has been considered.

2023/24-010 Action: The Director of Resources and Assurance (DRA) to circulate a list of the council’s “investment properties” to committee members.