Agenda item

The Committee considered the External Auditor - Auditor's Annual Report 2020/21.

Peter Barber, Key Audit Partner and Helen Lillington, Senior Audit Manager from Grant Thornton, the Council's external auditor presented the report and commented that:

·         Throughout the audit process, a good working relationship had been maintained with the Council’s finance team

·         The format of the VFM audit had changed for this year with a greater focus and more detail on the Council’s overall arrangements. In addition, the Pension Fund had been included in the VFM assessment. The findings of VFM report were very positive despite a very challenging year for the Council, not least through the impact of Covid

·         The Council had appropriate arrangements in place for financial sustainability, governance and economy, efficiency and effectiveness in its use of resources and despite the challenging year had managed to achieve a small surplus. It was found that the Council’s budget had the appropriate strong links to the corporate plan. The Council had a good understanding of its financial position and actions being taken

·         There remained some funding gaps to resolve going forward but these were no different from other councils

·         Capital funding had fallen largely as a result of the impact of Covid on the capital programme

·         The Council had adequate levels of reserves in place and a strategy to mitigate financial risk. A recommendation had been included in the report for the Council to review the MRP charge to ensure it met the statutory guidance and that sufficient resource was made available to support future debt payments

·         In relation to risk management, a recommendation had been included in the report for the Council to ensure that all remaining actions were implemented, including a review of effectiveness

·         Having spoken to a range of officers and members, it was clear that the Council had a good understanding of economy, efficiency and effectiveness.

In the ensuing debate, the following points were made:

·         How would the Council be responding to the external auditor’s recommendation to review the MRP charge? Rachael Hart advised that the issue had arisen following audit challenge of the deemed useful life which informed the MRP calculation; a useful life of 90 years had been used by the Council compared with a useful life estimated by the external auditors of 50 years. The financial impact of the difference in estimates in 2020/21 was £2.1m and was therefore immaterial. However, the calculation would be reviewed accordingly going forward

·         The Chair acknowledged that this was the last meeting that Peter Barber and Helen Lillington would be presenting the external accounting arrangements to the Council on behalf of Grant Thornton as their roles in Grant Thornton had changed. She thanked them both for their work in supporting the production of this Council’s accounts over many years. Peter Barber thanked members of the Committee for their support but in particular, Mark Sanders, who was leaving the Council, for all his help in preparing the Accounts over a number of years.

RESOLVED that the Annual Audit Report 2020/21 as set out in Appendix 1 to the report be noted.