Agenda item

To receive a report on the progress of the statement of accounts 2019/20.

Andy Brown, Corporate Director Resources, deputy Chief Exec and s151 presented the update report on the progress of the statement of accounts 2019/20.

The officer relayed apologies from Ian Howse of Deloitte who was unable to attend the Committee and explained that Deloitte had not been able to source anyone to attend.

The officer explained that they had hoped to bring the statement of accounts 2019/20 before the Committee today but there had been ongoing issues meaning that they were unable to do so.

It was stated that local government audit across the board was facing problems due to the very technical nature of the accounting and resourcing issues faced by external auditors. The officer explained that Wiltshire Council was not alone and that many authorities accounts were delayed. It was highlighted that the technical issues encountered did not affect the cash position of the council or the bottom line. These issues were historical, technical and related to the recording of assets.

Wiltshire Council would need to discuss timelines and the resourcing required with the external auditors in order to get the statement of accounts 2019/20 to Committee for approval. To get the accounts approved and to remove the ‘except for’ qualification was a priority.

Lizzie Watkin, Assistant Director Finance & Deputy s151 further explained that the issues faced were related to the technical financial accounting presentation of assets. There was no impact on the resources required to deliver services. Work was underway to ensure that the assets were shown at a true value and the scale of this work was significant.

Comments from Members included that the situation was frustrating, but there were issues across the public sector. The historical issues described did not affect the Councils ability to provide services, but it was hoped the issues could be resolved soon. There were concerns raised that Deloitte were not present and that the issues encountered would result in an escalation of fees.

In response to questions from Members regarding the situation officers explained that there was a new asset management system which gave more transparency and had led to the identification of further issues, resulting in more reconciliation being required. The work had previously been limited to the ‘except for’ qualification but had now broadened, so there were aspects where it was necessary to restate previous balances which was technical and difficult to do. Conversations were underway with Deloitte on the best way to achieve this. It was stated that the ‘except for’ qualification would remain for 2019/20 but they were working to get the qualification lifted for the statement of accounts 2020/21.

Regarding the recording of leases officers explained that there was new legislation for 2021/22 regarding leases and work was already being undertaken to ensure leases were reported correctly. Some adjustments would be applied to the 2019/20 accounts to ensure all leases are disclosed fully.

Officers confirmed that there was a national framework for local authority audit, but it was limited and had limited resources.

In response to the concerns raised regarding a possible escalation of fees due to the issues encountered, officers stated that we would undoubtedly need to pay more. Discussions were underway with the external auditors regarding this. There was also debate underway regarding historical errors with the accounts and previous audits, although it was difficult to go back to previous auditors regarding accounts that had been signed off.

Officers highlighted internal resource issues that were trying to be resolved and confirmed that a new Chief Accountant had been recruited and it was hoped the Council could also recruit a Financial Accountant to support technical and capital accounting.

In response to further questions the officers confirmed that there would be no impact to the Council on what the organisation could borrow, our reserves and that no fines would be received. The impact was purely reputational, and officers were not happy about the situation, or the state of local government audit across the board.

Cllr Pauline Church, Cabinet Member for Finance commented that she was deeply disappointed that the statement of accounts 2019/20 could not be signed off yet. These issues had been occurring for quite some time and whilst our resourcing issues were being resolved, we were now facing problems with Deloitte’s resourcing. Cllr Church stated that she would keep pushing this forward until resolved.

At the conclusion of the debate, it was,

Resolved:

To note the update on the Statement of Accounts 2019/20 and the ongoing delay to the completion of the audit process and formal approval by the Committee.