Agenda item

The Accounting Policies Report was presented for Members’ consideration. In terms of legislative deliverables, it was noted that the Council had now delivered the revenue and capital outturn reports. It was reported that the closure of 2020/21 Accounts was dependent on the reconciliation of opening balances on the legacy and new financial systems being completed.

It was reported that local authorities had now been informed of Government proposal to introduce a backstop date of 30^th September 2024 for completion of all outstanding local audits up to 2022-23 financial year. Local authorities would be a consulted on the plans to tackle local government audit delays, including on the proposed backstop date, in February 2024.

It was reported that there were still around 290 local authorities were yet to have their 2021-22 Accounts audited. As such, the proposal was of significant concern to local authorities across the country. It was noted that there also remained concerns that the backstop proposal did not address the issue of the lack of external audit resource.

It was reported that the new Head of Finance and Customer Services had been appointed and would be in post by the end of February. The Council had received a significant number of applications for the five permanent positions advertised in the finance department. It was hoped that this would result in reduced reliance on agency staff by March.

Key points on the provisional local government financial settlement were provided. It was noted that generally there would be a 4.9 per cent increase in funding for Borough and District Councils, local authorities would have the ability to increase Council Tax by up to 2.99 per cent. For planning applications, there would be a charge increase of 25 per cent (small) and 35 per cent (large) applications respectively.

Following the presentation of the report, Members discussed the implications of the Government’s backstop date proposal. It was recapped that the main issue remained the validation of take on balances (proof of period 0 balances) on both the legacy and the new financial ledger systems. It was reported that originally the external auditors had been undertaking data validation of this, however, the external auditors had now asked the Council to take over this work. It was planned that data reconciliation of opening balances between the old and new financial systems should be finalised by end of January. In response to a question, it was noted that the Council’s materiality level was around £400k, any misstatements amounting to more than this amount would result in qualification of the Council’s accounts.

It was reported by Officers that the Government’s current backstop date proposal gave the Council around 5-6 months to complete its outstanding accounts to avoid qualification on the accounts. It was commented that in April, May and June the external auditors focused on audit of health bodies and these months were not available for audit work on local authority accounts. Some Members commented that in light of the Government's announcement of the backstop date proposal, it was probable that the Council would receive a qualified opinion on its 2020-21 Accounts.

In relation to appointment of an independent person to the audit committee, it was reported that the Constitutional Review Working Group would need to agree on the level of remuneration for the post before this matter could be considered by the Committee.

RESOLVED that the progress on the 2020-21 Audit process be noted.