Agenda item

Report of the Chief Finance Officer.

Ola Owolabi, Deputy Chief Finance Officer (DCFO) presented the report and outlined the timeline and options available to the Council for appointing an External Auditor when the current arrangements reach an end in 2023.

In addition, the DCFO concluded his presentation with a short verbal update that summarised the recent deliberations of Lewes District Council’s (LDC) Audit and Standards Committee on the same issue.

Namely that:

·         Officers had been instructed to survey the nine eligible auditing companies regarding potential interest in independent contracts outside of the PSAA (Public Sector Audit Appointments Limited) scheme.

·         The results of the survey would be shared at an informal briefing for members of LDC Audit and Standards Committee. In addition, a representative from PSAAwould be invited to attend, to discuss the revised scheme following recommendations of the Redmond Report.

·         The LDC Audit and Standards Committee had deferred making a recommendation to Full Council until January 2022.

·         That the briefing could be offered as a joint event with Eastbourne Borough Council’s Audit and Governance Committee, in consideration of Option 2.

The Committee considered the report.  Following questions and comments from Members the DCFO confirmed that:

·         A recommendation would need to be presented to the Full Council meeting on 23 February 2022 in order to meet the PSAA’s opt-in deadline.

·         Auditing costs were expected to increase with any of the three Options outlined in the report. Costs for the PSAA scheme were not available.  The Local Government Association had published estimates of circa £25,000.00 to run an independent Auditors Panel (Options 1 and 2). However, that cost could be shared between the participating Councils in the Option 2 model.  More information to understand potential costs for setting up and running an Independent Panel could be included within a joint briefing.

·         A template form to help members ‘weigh’ and analyse the benefits and risks of the three options had been devised and shared with Committee members via email, as requested at the informal briefing on 8 November2021.

·         The deadline for survey responses from the nine auditing firms was 3 December 2021. 

·         Officers had sought to engage with other Councils and shared what feedback had been received to date, including any levels of interest for the Option 2 shared Independent Panel model.  In addition, the DCFO reported that only one District Council had previously opted out of the PSAA scheme to set up its own Panel, but that Council had not responded to an invitation to share its experiences as yet 

·         For the current appointing period, covering audits of the accounts for 2018/19 to 2022/23, there were 510 bodies opted-in and 10 organisations (of which 6 were Councils) who had made their own local arrangements. Of these 6 Councils, 5 were unitary / London Borough / Metropolitan District Councils; East Hampshire District Council was the only District Council to opt out.

·         As there was a joint staff arrangement between Lewes District Council and Eastbourne Borough Council, there would be resource efficiencies if the two Councils decided on the same auditing arrangement.

·         The Committee could, if it chose to opt in to the PSAA scheme, formally request that the same auditor be appointed for both Eastbourne and Lewes Councils.  Officers also advised that the Committee could submit a request regarding specific auditors, but that officers understood that PSAA was not under any obligation to agree such requests.

Members thanked Officers for all their research work, including reaching out to other Councils.

Members noted that, in addition to costs, considerations for ensuring open communication and accountability for poor service, were also important when identifying the best value option.

It was agreed that the pending information from the Officers’ investigation should be considered as part of the Committee’s deliberations for the future external auditing arrangements.  The Committee also welcomed the opportunity to receive a briefing alongside the Lewes District Council Audit and Standards Committee on the Audit Panel arrangements and to hear from the PSAA.

RESOLVED (unanimous)

To request Officers to:

1.    Find a suitable date in December for an informal joint briefing with the LDC Audit and Standards Committee, to take place remotely via Microsoft Teams;

2.    That a representative from the PSAA be invited to attend that briefing; and

3.    That an additional meeting of the Audit and Governance Committee be scheduled for January, in order for the Committee to make a recommendation on the audit arrangements to Full Council on 23 February 2022.