Agenda item

Report from Bury’s External Auditors

Osama Rathore from Mazars Forvis presented the External Audit Progress Report.

It was explained that the External Auditors were responsible for auditing the financial statements of the Council each year and to satisfy themselves that the Council’s Value for Money arrangements are in place and the effective use of resources.

During 2019/20 and 2020/21 a large number of external audits were delayed nationally. This impacted the ability of auditors to complete the audit for the year ending 31 March 2022 and subsequent year’s audits. A significant backlog of unaudited accounts built up as a result.

It was explained that for 2024/ 2025 the financial statements were delayed by 4 months to November 2025 which limited the ability of the External Auditors to complete their audit.

In 2024 legislation was enacted to put in place ‘backstop dates’ by when local authorities must publish their audited accounts for all years up to 31 March 2028.

Where external auditors were unable to complete their audit by the backstop date for a financial year, the auditor would issue a ‘Disclaimer of Opinion’ providing no assurance on the financial statements. The backstop dates were set out in the report.

It was also explained that the External Auditors undertook Value for Money work each year where recommendations were issues in all 3 categories.

This had led a statutory recommendation in December 2024 and the auditors annual report issued in February 2026 assessed the actions that the Council had taken against the recommendations. The External Auditors will assess progress against those recommendations as part of the work on the 2026 Value for Money work.

It was explained that it would take several years to build back to get to a ‘clean’ opinion and in Bury’s case it would be more complex. The Audit for the current year, 2025/2026 primary focus would be on rebuilding assurance to get back to a clean opinion and carry out the audit work.

Members were given the opportunity to ask questions and the following were raised:

• Councillor Rubinstein referred to the discovery of RAAC and asked if this was the reason for the issues in 2021/2022.

It was advised that this was one of the issues and that a response was delayed due to identifying the issue of RAAC across the council buildings.

It was asked that a response be provided but was delayed.

• Councillor Rubinstein asked how Bury compared with other Councils and it was explained that it was not uncommon to have three or four years of disclaimed opinion. Bury had more complex issues.

Neil explained that it was a number of years where the Council hadn’t had audited statement of accounts. To complete the accounts in detail to provide assurance would take a long time. The External Auditors had also struggled to have capacity to undertake the audit work required. Neil stated that the Ministry of Housing, Communities and Local Government will probably be asked to review as to whether there is a way to accelerate the work required.

• Councillor Rubinstein also referred to the consultants that had valued Manchester Airport had valued the airport incorrectly which had also contributed to the delay.

• Councillor Gartside referred to the identified failings that had been highlighted in December 2024 and asked what evidence would be required to satisfactorily address these.

It was explained that there had been concerns with staff turnover in the finance department and resourcing issues. The External Auditors would carry out an assessment of the arrangements that were in place for the Value for Money Work.

It was explained that a report of February 2026 was received by the Audit Committee which gave an update on the activity and delivery against the improvement action plan and provided assurance of delivery and progress so far against the improvement plan. The improvement plan had been developed in response to the statutory recommendation and had been monitored through the Audit Committee and Cabinet and Council. In addition, the report proposed robust new arrangements for governance and monitoring of delivery going forward which aligned with Corporate Performance reporting.

The Director of Finance explained that the VFM work carried out by the External Auditors since 2024 had recognised a number of improvements; Financial Sustainability, RAAC has been confirmed in Bury Market only and none of the other estates buildings, improvements in Children’s Services was with the external assessors from Ofsted. It was also stated that the previous External Auditor had referenced required culture change across the organisation which was ongoing and would perform part of the work of the VFM work going forward.

• Councillor Hook asked whether a schedule of works had been established to address the two actions identified by the external auditors that are required to complete this year’s audit, and noted that the audit opinion would be disclaimed. She also sought assurance that there is a clear plan for moving from a disclaimed opinion this year to a qualified opinion next year, including an understanding of any actions, requirements, or areas of focus for the Council to ensure it is in a stronger position for the next audit cycle.

It was explained that the Council had produced its accounts on time this year, which was a positive development and demonstrated progress in the financial reporting process.

The programme of work required by the External Auditors will be determined following the completion of their risk assessment work. It was noted that Government guidance sets out two potential approaches for rebuilding audit assurance following a number of years of disclaimed audit opinions: ‘Proof in Total’ and ‘Historic Testing’. The outcome of the auditors’ risk assessment will determine which approach is most appropriate for Bury, after which the agreed methodology can be implemented.

It was further explained that the Proof in Total approach is generally less resource-intensive and may enable assurance to be rebuilt more quickly. However, if this approach is not considered sufficient, the auditors may require Historic Testing, which involves reviewing prior years and is likely to take several years to complete.

It was agreed:

That the report be noted