Agenda item

To receive an external audit progress report from Grant Thornton.

Jackson Murray (Grant Thornton) presented the external audit progress report; pages 101 and 102 of the agenda were the focus for the update. The backstop deadline for the 2023/24 accounts was 28 February 2025. Prior to this, the 2023/34 accounts should have been published for the 30 working day public inspection period. Unfortunately, the council had not published these accounts in time, and therefore the backstop would be missed. These accounts would be finalised as soon as possible following the backstop. In addition, work by the predecessor auditor (Deloitte) on the 2023/23 audit needed to be completed.

In terms of the Wiltshire Council Pension Fund audit for 2023/24, lots of work had been undertaken on this and it was expected that findings would be reported to the Audit and Governance Committee at the extraordinary February meeting. A disclaimer opinion would be issued on these. However, the pension funds were considered along with the main Wiltshire Council audit, so the opinion could not be issued until the main accounts were considered. Unfortunately, there were several years of accounts which had not been properly audited due to the backlogs.

In terms of Value for Money, the Dedicated Schools Grant was a significant risk, as were delays in timely production of accounts and the predecessor auditor’s statutory recommendation to Full Council in February 2024. The representative felt that there was a significant weakness in relation to the timely production of financial statements and accounts. The external auditors would update the interim report that came to Committee in July 2024 and would publish that when the audit opinions were published.  

Members queried staffing numbers and adequacy, which had been discussed at many previous meetings, and whether the council was confident that it could achieve the various goals and deadlines. Lizzie Watkin (Corporate Director Resources and S151) stated that specialist agency resources had been brought in. The team were working on the 2023/24 accounts. Assets were a particular issue as they were material and had to be revalued every 5 years. This was done a rolling basis so that some assets were revalued every year. It was difficult to do the assessment until the previous year’s accounts had been closed. The delays had a knock-on effect. The team were producing draft accounts which were as true and fair as required. The aim was to get onto the 2024/25 accounts which would have a full audit. This was being thought of as the ‘reset’ year. It was highlighted that workloads had been relentless for the accounting/financial teams for a long time, and it may be that further short term resource was required to get to the 2024/25 accounts. 

Members asked who made the decision as to whether additional resources could be employed and whose budget this came from. The officer explained that this would be her decision as S151 officer, and it would be funded from her services budget. They would try to make savings elsewhere, otherwise there would be a budget pressure.   

Members thanked the officer and her teams for all their hard work.

In response to a question on when the 2023/24 accounts might be published and whether much of this process could be automated using technology, the officer explained that the draft 2023/24 accounts were expected to be published prior to the extraordinary meeting of the Committee on 18 February 2025. There was still a risk that this might not happen, but the teams were pushing hard to achieve this. The hope was that if the draft accounts were published, then the Committee could still consider them at the extraordinary February meeting. Following consideration of the accounts, the Committee, if minded to do so, could delegate final approval of the accounts to the S151 officer and the Chairman of the Committee. If the accounts were not published ahead of that meeting, then it was likely that another extraordinary meeting of the Committee would be required.

The officer explained that in terms of opportunities to do things differently, local authority accounts were incredibly complex. There were many diverse services to gather data from, and this included maintained schools with different systems. In 2024/25 changes to lease accounting regulations would come in, which further complicated matters. Despite it being a lovely idea, it was not thought that there was 1 system currently available which would simplify the process. However, officers did look at how things could be done differently, for example, could AI help with quality and speed? Officers were engaging with the ICT and Transformation teams to pursue improvements which could be made.  

Members stated that they had lived and breathed these matters for a long time. They felt that the backstops were useful, however the brought forward figures still needed to be accurate. This was an ongoing, approximately 8 year situation, and it was difficult to see how the council would ever catch up. Members queried what they could do practically and politically to help.

The officer stated that without changes to regulations and requirements, then the council may be in this situation for a long time. Accounting regulations were not fit for purpose for local authorities. Therefore, it was hoped that any opportunity that the Committee had to promote that accounting and audit regulations needed to changed would be taken. It was noted that the staffing situation had improved, but that there was a lack of suitably qualified staff in this space and therefore internal training was being undertaken to upskill staff. It was stated that it would likely take years to clear all the issues, and it might not be until 2026/27 when the council had a clean set of accounts. It was critical that the Committee challenged the external auditors to gain assurance, however they need not be preoccupied with technical accounting matters.

Mr Murray highlighted a government consultation which had opened just before Christmas 2024, on accounting and audit regulations. It was noted that the government had consulted on this before, without any changes being adopted. However, the Committee might wish to respond to this consultation. The link would be circulated to Members. The S151 officer would respond to give the corporate view. It was also suggested that the Chairman, along with the Leader of the Council, the Cabinet Member responsible for Finance could write to the Secretary of State (SoS) for Ministry of Housing, Communities & Local Government (MHCLG) to outline some of the issues.

On the proposal of the Chairman, seconded by Cllr Chuck berry, it was,

Resolved:

To note the external audit progress report.