Minutes:
The Chair noted that, at the last meeting, BDO indicated that the Audit had been paused until the end of July 2021. Therefore, the Audit Completion Report was not included as an item for this meeting.
However, the Chair informed the Committee that issues had emerged in relation to the Audit and that she would be taking these as an urgent item.
The Chair disclosed that owing to the outstanding 2018-19 Housing Benefits Audit, the Council had 5% of July Housing Benefits payment withheld by the Government. This amounted to circa £357k. The Chair added that if the audit was not completed by 31 July 2021 there will be a further 10% deduction in August. Whilst the Council would receive all of the withheld funds once the audit was completed, given the potential cashflow issues, the Chair asked that BDO update the Committee in relation to the audit.
In relation to the 2019-20 audits, the Chair noted that work was restarting from 12 July on the single entity, group accounts, and pension fund accounts. The Chair asked if BDO could provide a target date for completion noting that the 2019-20 housing benefit audit would begin only when the 2018-19 audit was complete.
In relation to the 2020-21 audits, a timetable for the completion of this work was due to be provided by BDO. However, the Chair, noting that the Council was in the process of moving away from the Oracle finance system to E5 financials with a go-live date of 1 December 2021, expressed concern that if the audit was not completed before then, then work may be duplicated across two systems which could delay the audit. The Chair highlighted that this could potentially affect the ability of the Council to meet the statutory deadline for completion of the Council’s audit. The deadline for completion was 30November 2021. The Committee was also informed that the statutory deadline to file accounts for the Council’s subsidiary companies was 31 December 2021.
The BDO Representative responded that, in relation to the 2018-19 Housing Benefits Audit, work had restarted on 12 July. An error had been identified and additional testing was being undertaken. Once this had been resolved, the audit will be completed.
Work had also restarted on the single entity accounts, group entity accounts and pension fund accounts for 2019-10 and it was intended that these would be completed by 31 August 2021.
In response to questioning from the Finance Director, the BDO representative assured the Committee that the auditing team was sufficiently resourced and there was no indication of any staffing issues that would cause delays.
In relation to the subsidiary audits, the Finance Director informed the Committee that, going forward, there would be two audit teams led by two audit partners which should increase the pace of progress and thus reduce the risk of failing to meet the Companies House deadline.
BDO was finalising deadlines for the 2020-21 Audit and this would be presented to the Committee, as well as management. Discussions were ongoing in relation to the change of the financial IT system, and its potential affect on the audit, including putting in place mechanisms to avoid duplication of work or, where unavoidable, to minimise it.
The Committee noted the update.