Agenda item

Report from Forvis Mazars, Bury Council’s External Auditors is attached

Daniel Watson, Forvis Mazars, presented the External Audit Progress Report. Members were advised that the External Auditors are responsible for auditing the Council's financial statements each year and assessing whether appropriate arrangements are in place to secure economy, efficiency and effectiveness in the use of resources.

The Committee was informed that the report outlined the position regarding the Council's outstanding audits, issues affecting the quality and timeliness of accounts, and matters relating to internal controls.

Mr Watson explained that, due to the historic backlog of local authority audits nationally, it had not been possible to complete a streamlined approach to the outstanding audit work. Forvis Mazars was therefore exploring alternative approaches to support the Council, prioritising lower-risk audit work where possible before progressing to more detailed areas. Work was also continuing in relation to Value for Money assessments.

Referring to Section 2 of the report, Mr Watson advised that this summarised weaknesses identified in previous years together with recommendations and the proposed audit response. An update on progress against these matters would be reported to a future meeting of the Audit Committee. He noted that matters contained within the recent financial update presented by Neil Kissock would also be considered as part of the audit process. The final section of the report provided an update on the position across other local authority audits.

Members were given the opportunity to ask questions:

Councillor M Smith sought clarification regarding the anticipated timescale for completion and submission of the Council's accounts and whether the auditors remained satisfied regarding the validity of the financial information available.

In response, Daniel Watson advised that it remained difficult to provide a definitive timescale as the extent of issues requiring investigation could not yet be fully determined until audit work progressed further.

Councillor Gartside queried whether the current objective remained to secure a disclaimed audit opinion initially, before progressing towards a qualified and ultimately an unmodified audit opinion in future years.

Mr Watson confirmed that this broadly reflected the anticipated pathway towards restoring full audit assurance.

Ben Thomas noted the various challenges identified within the report and questioned whether the Council should develop a fully assured improvement and performance plan to enable Members to effectively monitor progress and hold the organisation to account. He also asked whether the Council's wider transformation programme would be reported to the Committee.

Officers advised that progress in relation to governance and transformation activity would be reflected through the Annual Governance Statement and that periodic reviews and assurance updates were undertaken throughout the year.

Neil Kissock acknowledged that a number of years of unaudited accounts remained outstanding but emphasised that this did not necessarily indicate significant issues within those accounts, as they had not yet been subject to full audit examination. He highlighted the considerable improvements made in recent years, including implementation of a financial transformation programme and restructuring of the finance team. Mr Kissock stated that the Council had made significant progress and expressed confidence in the quality of more recent accounts. He also noted the challenges associated with the loss of organisational knowledge over time, as some staff involved in preparing historic accounts were no longer employed by the Council. As a result, focusing audit effort on more recent years could provide a more effective route forward.

Councillor Rubinstein noted that the last unqualified audit opinion had been received for 2019/20 and asked whether there was a quicker route towards achieving an unqualified opinion if assurance could be provided over the Council's year-end positions.

In response, Daniel Watson explained that audit requirements remained in place for a number of historic years and that supporting documentation would still need to be reviewed. He advised that the audit team retained considerable corporate knowledge of the Council's accounts. He added that achieving assurance over opening and closing balance sheets would assist in streamlining future audit work.

It was agreed:

1.    That the External Audit Progress Report be noted.