Agenda item

Report from the Director of Finance attached

Appendix 1 – 2024/25 Audit Strategy and Completion Report – Report from Forvis Mazars attached

Appendix 2 - 2025/25 Unaudited Statement of Accounts - attached

Appendix 3 – 2024/25 Annual Governance Statement - attached

 

It was reported that in accordance with the Accounts and Audit Regulations 2015 (as amended) the 2024/25 Draft Unaudited Statement of Accounts were signed by the Director of Finance (S151 Officer) on 14 October 2025 and published on the Councils website as well as the Annual Governance Statement for the year on 15 October 2025. The 30-working day period for the Exercise of Public Rights commenced on 16 October 2025 and ended on 26 November 2025.

 

Forvis Mazars remains the Council’s external auditors for the 2024/25 financial year up to 2028/29 based on their appointment by the PSAA.

 

The Accounts and Audit (Amendment) Regulations 2024 came into force on the 30 September 2024, this legislated the statutory backstop dates, including the 2024/25 Statement of Accounts of 27 February 2026. To comply with the backstop date legislation the Council must publish accountability statements on the website by this backstop date, accountability statements need to include:

 

·         The Statement of Accounts together with the Audit Opinion and any certificate.

·         The Annual Governance Statement.

·         The Narrative Statement (the Council includes this within the Statement of Accounts)

 

The Accounts and Audit (Amendment) Regulations 2024 require those charged with governance to approve the final audited accountability statements prior to publication. Therefore, Audit Committee are asked to approve the 2024/25 Statement of Accounts (Appendix 2) and Annual Governance Statement (Appendix 3) and for the Chair of the Audit Committee and the Director of Finance to sign the 2024/25 Statement of Accounts at the meeting and delegate authority to the Leader and Chief Executive to sign-off the 2024/25 Annual Governance Statement.

 

Karen Murray, Engagement Partner, Forvis Mazars  presented the Audit Strategy Completion Report – year ended 31 March 2025

 

The purpose of the document is to summarise the audit and to explain how the statutory backstop arrangements introduced by the Accounts and Audit (Amendment) Regulations 2024, have affected the completion of the work and the reporting consequences.

 

It was explained that the external auditors consider two-way communication with the Council to be key to a successful audit and particularly important in the context of the backstop arrangements as it facilitates:

• reaching a mutual understanding of the scope of the audit and the responsibilities of each of the external auditors and the council;

 

• sharing information to assist the external auditors and the council to fulfil their respective responsibilities; and

 

• providing the council with constructive observations arising from the audit process even though this has been curtailed by the backstopped arrangements.

 

Karen explained that Forvis Mazars would usually report the outcome of their  planning work, including the significant risks identified and their planned procedures, in the Audit Strategy Memorandum. The results of their audit, including significant matters identified would usually be reported to you in the Audit Completion Report.

 

As a result of the backstop arrangements, it has been determined that the most appropriate way to communicate each of the matters required under auditing standards, is in a single document, the Audit Strategy and Completion Report.

 

As it is a fundamental requirement that an auditor is, and is seen to be, independent of audited bodies, section 8 of the document summarises their considerations and conclusions on their independence as auditors.

 

It was stated that Forvis Mazars will continue to work closely with the Audit Committee and management to take the necessary steps to rebuild assurance over future accounting periods. And will report further details to the Committee on the rebuilding process in the coming months. In line with the guidance issued by the National Audit Office, as endorsed by the Financial Reporting Council, the External Auditors hope to return to a standard audit cycle where they are able to obtain sufficient, appropriate evidence in order to issue an unmodified audit opinion in as short a period as practicable.

 

The significant findings were set out in the report

 

The Value for Money arrangements were presented to the Committee. It was explained that this was the first audit year undertaking the value for money (VFM) work under the full 2024 Code of Audit Practice (the Code). The responsibility remains to be satisfied that the Council has proper arrangements in place, and to report in the auditor’s report where they are not satisfied that arrangements are in place. Where a recommendation has been issues in relation to a significant weakness this indicates that the auditors are not satisfied that arrangements are in place. A commentary on the arrangements is provided in the Auditor’s Annual Report.

 

The Code requires external auditors to structure their commentary to report under three specified criteria:

1.    Financial sustainability – how the Council plans and manages its resources to ensure it can continue to deliver its services;

 

2. Governance – how the Council ensures that it makes informed decisions and properly manages its risks; and

 

3. Improving economy, efficiency and effectiveness – how the Council uses information about its costs and performance to improve the way it manages and delivers its services

 

Previously identified significant weaknesses and the progress made against those were set out in the report;

 

·         Ofsted Inspection: Children’s Services

·         Weaknesses in Internal Control

·         Financial Sustainability

 

The following questions were raised:

 

• Councillor Gartside referred to the opening balances set out within the Statement of Accounts and asked if the opening balances were accurate given the fact that the accounts had not been audited.

 

It was confirmed that the balances were accurate, and the Director of Finance provided assurance to this effect. The External Auditor also confirmed they were satisfied with the Director of Finance’s statement.

 

• Councillor Berry referred to the external auditors requests for information not being complied with in the past and asked if the Council will be in a position to provide the information requested going forward.

 

The Director of Finance explained that with the roll out of the finance improvement programme, interim staff have, and will be replaced with permanent colleagues who will be working more closely with the external audit team to ensure that all the information required was provided.

 

• Councillor Moss noted that concerns had been raised across the Council regarding the level of support provided to the external auditors, highlighting inconsistency in the support offered.

 

It was explained that the Council aims to reach a consistently high standard of service across all areas within the next two to three years

 

• Councillor Hook asked whether a timetable had been developed to ensure that the Council does not return to the position of having accounts disclaimed.

 

It was reported that the current Audit Partner would be leaving the Bury team and that a new Partner would be appointed. Working alongside the External Audit Manager and their team, one of their first tasks would be to produce a project plan outlining the work required.

 

• Councillor Hook also asked what the required date of issue was for the 25/26 Statement of Accounts.

 

The Director of Finance reported that the required date was 31 January 2027 and then 31 November 2027 for the 26/27 accounts.

 

The Director of Finance stated that once the 25/26 accounts were issued Mazars will start their audit work and assess the requirements.

 

• Councillor Rubinstein asked if the accounts were delayed being issued.

 

It was confirmed that they were issued three months late due to delays associated with valuations.

 

• Councillor Rubinstein further queried whether work could have been progressed without the valuation information.

 

It was explained that the Section 151 Officer must certify the accounts as a true and fair record, which would not have been possible had the valuation information been excluded.

 

The draft accounts are required to be published to allow anyone the opportunity to review them and raise any concerns or questions that they may have with the auditor.

 

• Councillor Gartside asked whether the council would ever be able to receive an unmodified audit opinion.

 

It was stated that the earliest this could be achieved would be a minimum of three years.

 

• Ben Thomas, independent Member, referred to a statement in the report advising that the auditors had not received responses from management and those charged with governance on their inquires in relation to fraud and compliance with laws and regulations and asked if this was still the case.

 

The Director of Finance confirmed by that all the information had now been provided.

 

• Mr Webster, Independent Member, highlighted concerns about the poor quality of the AGS, noting factual inaccuracies, incorrect links and inconsistent paragraph numbering. He asked whether these issues had been resolved.

Karen Murray confirmed that the updated version is now a fair reflection.

 

• Councillor Moss referred to the Dedicated Schools Grant that was referenced in the report and asked whether the recent announcement from the Government that a package of funding would be made available would have an effect on the deficit that was reported.

 

Karen Murray explained that the additional funding will not be sufficient to fully cover all deficits, and the Council must continue to reduce and manage the remaining shortfall.

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• Councillor Moss noted that a sentence was incomplete in the section titled “Our views on the actions taken to date”. He also queried whether the term “Director of Resources” in Appendix B should instead read “Director of Finance”.

 

• Councillor Moss raised concerns regarding the wording of the statement from the Head of Fraud, Audit, Insurance and Risk on page 11 of the Statement of Accounts, which begins “some fundamental and significant recommendations.” He noted that the same wording also appears in the AGS and suggested it could more accurately reflect the position.

 

The Director of Finance explained that the Audit Plan covers a broad range and confirmed he would take a look at the wording.

 

• Mr Thomas referred to the actuarial gains and losses and the challenge around the assumptions and asked whether there had been any outcome following the tri annual review.

 

It was reported that the outcome of the review had suggested a saving of 1.6m  over the following three years.

 

It was agreed:

 

That the Audit Committee

 

1.    Note the 2024/25 Management Representation Letter.

 

2.    Note the 2024/25 External Audit Strategy and Completion Report.

 

3.    Note the 2024/25 External Audit Value for Money (VFM) Report.

 

4.    Approve the 2024/25 Statement of Accounts and Annual Governance Statement.

 

Delegate authority to the Director of Finance (S151 Officer) to sign the 2024/25 Management Representation Letter. 2.6 Delegate authority to the Chair of the Audit Committee and Director of Finance (S151 Officer) to sign-off the 2024/25 Statement of Accounts and Leader and Chief Executive to sign-off the 2024/25 Annual Governance Statement.