Agenda item

A report of the Director of Finance (Section 151 Officer) was presented, the purpose of which was for Members to approve the Council’s Statement of Accounts for the 2020/21 financial year following completion of the external audit process and in line with statutory requirements.

Given the various issues on Governance presented in the External Auditors’ Audit Results Report as part of their value for money assessment, and that an update from CIPFA (Chartered Institute of Public Finance & Accountancy) on their consultation on highways infrastructure assets was awaited, the approval would be in principle at this stage.   A number of subsequent actions would be required to close the approval/external audit process around the accounts.

The draft Statement of Accounts for 2020/21 was presented to the Corporate Affairs and Audit Committee on 5 August 2021 to provide Members with an understanding of the Council’s financial position, performance and cash flows at 31 March 2021 and how it had performed against it revenue and capital budget plans.  Significant issues included within the financial statements were also discussed for information at that stage.

Details of the changes to the Statement of Accounts, including the unadjusted items, and further information in relation to Highways Assets were contained in the submitted report.

Further updates had been provided to the Committee on progress during the audit, principally on the 31March and 9 June 2022.   The various delays experienced on the audit of the accounts and why statutory date had not been met had been clarified. In order to complete the process an audit opinion was required from the External Auditor (EY) in relation to both a true and fair view on the financial statements presented and the value for money arrangements put in place by the Council.

The 2020/21 audit had been a significant undertaking for many local authorities.  CIPFA reported that at the statutory date for these accounts of 30 September 2021 only 9% of English Local Authorities had completed their external audit.  Although this had improved to 40% by 31 January 2022, it illustrated the scale of challenge for Councils.

In addition, new regulations had been introduced on local audit firms following a number of high profile corporate failures in 2018/19 which were influenced by inaccurate financial reporting.  This had resulted in more emphasis on the concept of a Local Authority as a going concern and additional assurances and evidence being sought by auditors as part of their review of the Statement of Accounts.

AGREED that the Audited Statement of Accounts for 2020/21, as attached at Appendix A to the submitted report, was approved on the following basis:

1.  the audit was substantially complete for both the financial statements and value for money assessment;

2.   all relevant and appropriate adjustments had been made in the accounts as a result of the external audit process;

3.   the list of unadjusted misstatements set out at paragraph 10 were not made within the accounts;

4.   responsibility was delegated to the Interim Director of Finance (S151 Officer) to make any final adjustments to the Statement of Accounts for 2020/21 in respect of the CIPFA guidance on highways infrastructure assets;

5.    any final changes to the Annual Governance Statement were incorporated into the Statement of Accounts before it was published on the Council’s website.