Agenda item

Grant Thornton presented the report to those Charged with Governance for 2019/20 and the Final Audit Findings Report.

The majority of work on the Interim Audit was completed on site from January to March 2020 which enabled the remainder of the audit work to be completed remotely.  The Accounts and papers were provided to Grant Thornton on the 8 June 2020 in line with the timescales agreed prior to Covid-19 which was a big achievement for the Finance Team.  Although some amendments were needed the accounts and working papers were of a good standard.  There was regular communication between both sides which enabled the majority of the audit to be delivered without undue delay. 

With regard to the Audit approach, Covid 19 was a key factor and discussions were held regarding the working arrangements and additional information was required with regard to governance arrangements, controls and sustainability.  Material assessment and Material misstatement were considered and tested.  Shropshire Pension Fund auditor’s IAS19 Report would be available shortly although there were some final assurances needed.  Significant risks such as stock markets, land and buildings, pension liability, material misstatement had been considered and no significant issues found although some adjustment to entries had been made based on audit procedures.  With regard to NuPlace, additional assurances had been sought regarding value of properties due to the uncertainty of the property market and this had been consolidated into the group financial statement.  The Audit Opinion would emphasise the importance of material uncertainty that existed around the valuation of properties at 31 March.  The deadline for the Accounts was 30 November as required by ISA 260 but there was nothing major to draw out.  It was extremely important that the Auditors remained independent and sufficient safeguards were in place and there were no issues to draw to Members’ attention.   Additional non-audit services were required with regard to the certification of teachers pensions return and housing benefit would take place later in the year with additional fees.  Within the audit standards action plan there were some recommendations on how to improve which were around the receipt of Declarations of Interest Forms that had not been received in 2019/20 and in relation to the 2018/19 financial statements and creditor/debtor balances which had proved challenging but had improved during this audit.  The issue around the VAT had now been brought to a satisfactory resolution.  A clerical issue had been identified regarding PPE but this was an isolated clerical error and had been satisfactorily resolved.

As part of the Value for Money audit the external Auditors were required to look at financial sustainability and the going concern due to the pressures some Local Authorities were facing and the uncertain financial outlook.  Key achievements were the budget savings during 2019/20 which put the Council in a strong financial position to deal with the upcoming challenges.  Key pressure points were social care costs, loss of income such as fees and charges, the impact on local taxation and the collection of deficits, business rates and council tax.  Looking forward to 2020/21 the pressure would continue, although a spending review was in progress and additional funding from the Government had kept things going, there was uncertainty as to whether the funding would be extended.  Financial resilience would be tested over the next two years with the key areas being budgetary management, central government funding and the duration of the pandemic.  The emphasis of the audit opinion would be land and building valuations as this was the default position for all audits undertaken this year.  Assurance was awaited on the pension fund and a report was due to be released shortly.   The opinion would show how well the audit had gone the support received, the quality of the accounts and that the Council was in a good financial position in the unusual circumstances.

During the discussion some Members queried the type of declarations that had not been received and it was confirmed that this was the Declarations of Interest form that members completed and that not all declarations had been received.  Members thanked the finance team for their accurate and swift work in getting the accounts completed especially in the light of the pandemic.