Agenda and minutes

The Independent Advisor (IA) disclosed that he was engaged as a consultant to Public Sector Audit Appointments (PSAA), which appoints the Council’s external auditor. The IA disclosed that he had advised on the financial evaluation on the forthcoming tender and the potential impact on the time that would be required as a result of changes in auditing and accounting standards requirements.

The IA assured the Committee that this did not directly affect Barking and Dagenham Council or the appointment of an external auditor. The Chair agreed that this was not a disqualifying interest and permitted the IA to continue to participate in the meeting.

The Chair requested an update on the actions referred to in the minutes. The Senior Governance Officer (SFO) disclosed that since the last meeting, the Head of Assurance reported that the agreed actions had been implemented and a Parking Strategy report was submitted to the 12 July 2022 Cabinet, setting out the CPZ benefits realised to date and the Council’s approach to future projects.

All other actions were outstanding and the Committee would receive an update at the next meeting taking place on 6 December 2022.

The IA asked that the minutes be amended to show that ‘the IA assured the Committee that this did not directly affect Barking and Dagenham Council or the appointment of an external auditor.’

Subject to the amendment, the minutes of the meeting held on 20 July 2022 were confirmed as correct.

The Head of Law (HoL) updated the Committee.

All complaints highlighted to the Committee at the previous meeting had now been closed. The complaints had been closed owing to lack of evidence or had been deemed vexatious and the Monitoring Officer had agreed to this.

The Committee noted the update.

BDO’s representatives updated the Committee.

An overview on the status of the audit was provided to the Committee. BDO said that the audit was ongoing, and progress had been made since BDO last attended the Committee on 7 March 2022.

There was a pause during May and June 2022, owing to priority being given to NHS audits. When the audit resumed, a new team was introduced to address sections of the audit that were incomplete or where concerns had been raised. These mostly related to Property, Plant and Equipment, as well as to the Group Consolidation Process.

BDO explained that the Audit Manager dealing with the Audit went on sick leave and subsequently tendered their resignation. This presented an unforeseen challenge which further delayed the audit during July and August 2022. BDO appointed two new auditors, Kirsty Slater and Duncan Wallace, to take over the management of the audit. BDO emphasised that both auditors were already scheduled to oversee the 2020/21 audit but would now also oversee the remainder of the 2019/20 audit.

BDO said that it was confident that the audit would be completed by January 2023. However, caution was expressed in relation to accounting for infrastructure assets. All local authority auditors were still awaiting the decision on an amended accounting treatment, after the generally accepted public sector practice of not writing out the carrying amount of replaced highway infrastructure components, and/or those components which were fully depreciated in the balance sheet, was highlighted as contrary the Auditing Code Requirement. BDO said that they understood that the Code would be amended to apply retrospectively.

The Committee, noting that previous assurances in relation to audit completion had not been met, asked why the Committee should have confidence in the latest assurance. BDO responded that the 2019/20 audit began later than planned owing to issues with the previous audit and that, whilst a root cause analysis was undertaken to avoid a repeat of issues with the 2018/19 audit, some of the issues re-emerged in the 2019/20 audit. BDO added that audits were planned in advance and resourcing was allocated based on the plan. Therefore, when unexpected issues emerged, it could affect resource allocation. In the case of the 2019/20 audit, other issues emerged with staff resources owing to illness and leave. BDO also emphasised the nationwide backlog in the delivery of public sector audits and, in common with other public sector auditors, BDO’s audits of local authorities had also suffered delays.

As part of the review, areas requiring completion were identified, as well as the staff resources and time required to complete the audit. BDO acknowledged that it could not give an absolute guarantee regarding completion but that it was confident that, having reviewed resource allocations required to complete the audit and allocated accordingly, the draft audit report would be ready by January 2023. BDO was prioritising older outstanding audits and this would benefit Barking and Dagenham Council.

In response to further questioning, BDO said that, given previous issues, there were  ...  view the full minutes text for item 13.

BDO requested that the workplan be updated to include the 2020/2021 audit plan for the meeting taking place on 6 March 2023.

The IA recommended that an audit progress update be included as an item for the meeting on 6 December 2022 and that the additional meeting scheduled for February 2023 be added to the work programme.

The Committee agreed to the proposed items.