Agenda item

The report for this item will follow in an additional papers pack.

The Key Audit Partner from Grant Thornton presented an update on the application of the local authority backstop and in doing so reported that the Government announced a backstop date of 13^th December 2024 by which accounts up to the 2022-23 financial year would need to have been produced, put out for public inspection, and to have received an audit opinion.

It was noted that Redditch Borough Council had outstanding accounts to be externally audited for years 2020-21, 2021-22, and 2022-23. It was the view of the External Auditor that given the backstop date of 13^th December, there would not be enough time to complete the audits of these accounts, and therefore the backstop would need to be applied and disclaimer opinions issued for these years. It was noted that disclaimer opinions in this case would mean that the auditor had been unable to form an audit opinion, the reason being the limitation of scope imposed by statute (not by the local authority). It was noted that for years 2020-21 to 2022-23, the External Auditor had completed Value for Money work and issued interim auditor’s Annual Reports, which would be finalised when opinions on the financial statements were issued.

A meeting of the Committee would need to be arranged in early December, in anticipation of the backstop date, in order to enable the External Auditor to share the wording of the draft wording of audit opinions for years 2020-21 to 2022-23 with the Committee. Members were updated that the Council had produced the 2020-21 accounts, and they had been released for public inspection. The 2021-22 accounts were to be released for public inspection at the beginning of October, and the 2022-23 draft accounts were to be finalised and released for public inspection by the end of October.

The Council’s new External Auditor, Bishop Fleming, would be assuming responsibility for the Council’s accounts from financial year 2023-24. The backstop deadline for issuing of audit of audit opinions for accounts for financial year 2023-24 was 28^th February 2025.

It was highlighted that nationally there was a significant backlog of unaudited local council accounts. There remained circa 600-700 sets unaudited local authority accounts for years up to 2022-23, which were likely to be issued with ‘disclaimer’ opinions due to the auditors having been unable to complete audits in time before the backstop date.

It was queried by Members when a letter of representation was due to be submitted by the Council. It was explained by Officers that they would provide an update on this in due course.

Officers explained the difficulties with preparing the Council’s accounts for the year 2021-22 due to cash receipting issues experienced throughout that financial year. It was reiterated that thousands of transactions were incorrectly allocated and this needed to be rectified manually. It was noted that statements for collection fund and pensions had been completed for 2020-21 to 2022-23 financial years, however, general fund account still had to be finalised for 2021-22 and 2022-23.

RESOLVED that

the External Auditor Progress Report and Sector Update be noted.