A verbal report of the external auditor, Deloitte.
Minutes:
Ola Owolabi, Deputy Chief Finance Officer, provided an update on the work of the external auditors, Deloitte. Ben Sheriff and Tanya Chikari, representing Deloitte, also addressed the Committee.
Ben Sheriff, Deloitte, advised Members that the audit had commenced in July with a mix of remote and site visits by the Deloitte Audit team, working with the Council’s Finance team. As not all of the information requested had been available, the planned timings for completion had moved back. The audit was progressing and, with support from the Finance Team, issues were being addressed. It was anticipated that the 2019/2020audit would be completed by the end of October and the focus would then move to the 2021 audit.
Ola Owolabi advised the Committee that time was being taken to ensure that the requests for information from Deloitte and reconciliations were being dealt with thoroughly. These areas had caused delays, however weekly progress meetings were taking place and the timetable revised with the expectation that the 2019/2020 Audit would be presented to the Committee on 23 November and the 2020/2021 Audit would be available in January 2023. The 2021/2022 Audit would be presented to the Committee’s 1 March meeting. The Finance Team was working closely with colleagues across the organisation and with Deloitte to provide responses to questions as quickly as possible.
The following points were highlighted during discussion:
· In terms of providing assurances that the revised timetable was realistic, Officers explained that meeting the specific format for reconciliations requested by the Auditors had taken considerable time. Now that had been provided, it was expected that the Audit for 2021/2022 would be easier and quicker to complete.
· Deloitte representatives explained that the time taken to provide the 2019/20 audit had been impacted by issues which surfaced during the testing of information. Many local government audits were experiencing similar challenges in respect of timings.
· Officers advised that providing additional or reformatted information and data also added time to the process. Each sample requested by the Auditors often included multiple accounting entries and the data behind each entry needed input from the relevant departments.
· Deloitte representatives stated that not all items requested to initiate the 2019/20 Audit had been available. Specific examples mentioned included papers for the 2020 ICE (Investment Company Eastbourne Ltd) Valuation, reconciliation of the trial balance and general ledger, and group accounts.
· Members expressed concern at the delays in providing the highlighted information requested and that internal requests to colleagues for data should be prioritised. Officers explained that the format for production of trial balances had needed to be changed to one that was acceptable to the Auditors.
· Officers explained the process through which the information requests from the Auditors was received and information provided. This highlighted that that timeframe between receipt of the request and the required date for returning information was not always practical.
· Members asked if there was anything that the Audit and Governance Committee could do to support the process of providing information requested by the Auditors. Officers explained that the Chief Finance Officer was working closely with the rest of the Corporate Management Team (CMT) to ensure that heads of service and the relevant officers were providing timely responses to requests from the Finance team. The minuting of the Committee’s discussion on this matter would also help highlight the issue to CMT.
· Officers explained that the timeframe around the request for working papers had presented difficulties and it was also recognised that global events, particularly in the private sector had added to the requirements from the Auditors.
· Deloitte representatives advised Members that there had been underlying changes in auditing standards nationally over the previous years that had changed the requirements when auditing. Typically, when organisations had accounting issues, it was often due to preparation and issues in the systems and controls used.
Resolved(unanimously):
To note the update.