Agenda item

The Financial Compliance Report was presented which detailed the position regarding legislative reporting requirements and the position on submission of the Council’s Statements of Accounts.

In reference to Government reporting requirements, the Council continued to provide the majority of key legislative deliverables within timeframes and was compliant with national requirements. The key outstanding issue was the Council’s VAT returns. It was highlighted that since December 2024 the Council had been submitting VAT returns to HMRC on a monthly basis, but discussions were ongoing with HMRC regarding the prior three years of VAT returns.

To work on resolving outstanding VAT returns, the finance team had undertaken preparation of the Council for a possible VAT inspection. In addition, VAT consultants had been brought in alongside the existing tax advisor and training on VAT had been arranged for the entire finance team staff.

Members were reminded that the Council had published and made their draft 2023-24 Accounts available for public inspection from 17 January 2025 to 3 March 2025. The Council was listed by the Ministry of Housing, Communities and Local Government (MHCLG) as one of the local authorities that had not met the statutory backstop deadline of 28 February 2025 for having the audited 2023-24 Accounts available, but a note was included to explain that the Council had no appointed auditor for 2023-24 at the time of the backstop deadline when the Accounts were being submitted.

It was noted that the new External Auditor, Ernst and Young, had now finished their onboarding checks and had begun the audit of 2023-24 Accounts with the expectation that these would receive a ‘disclaimer opinion’. The backstop date for publishing the audited statements of accounts for 2024-25 was 27 February 2026 with Ernst and Young being the Council’s auditors for these set of accounts.

A Member asked whether the officers felt confident the Council would be able to meet the backstop date for audited 2024-25 Accounts submission. It was responded that the Council’s finance team had effectively done work on three sets of accounts within the last year and that officers felt confident in meeting this deadline as the bulk of the work in catching up on accounts from previous years had already been done. It was expected that from the 2026-27 financial year the Council would be back on track in the audit cycle in having one year’s accounts per year to prepare.

A question was asked with regard to the onboarding time for the new External Auditor, Ernst and Young. It was queried whether the onboarding period could have been reduced by all Members’ filing in compliance forms more promptly and whether this would have made an impact on having the auditors in time for the 2023-24 Accounts backstop date. Members were reassured that the time taken for submission of compliance forms made little difference to the length of the onboarding period and that the External Auditor onboarding was completed within a normal time for this process. It was commented that the Council was in an unusual position in that it had no External Auditor for a number of months and during the period of the 2023-24 backstop date but the onboarding process could not have been expedited further.

RESOLVED that

1)    The Committee note that the 2023/24 Accounts public consultation period finished on 3 March 2025.

2)    The Committee note the position in relation to the delivery of the 2024/25 Accounts and the auditing of the 2023/24 Accounts.

3)    The Committee note the position in regard to other financial indicators set out in this report.

4)    The current position with the Council’s new External Auditor, Ernst and Young, be noted.

5)    The introduction of a Financial Stability Plan following the successful delivery of the Financial Improvement Plan be noted.