Update by Deloitte
Minutes:
The Committee invited the Deputy Chief Finance Officer (DCFO) to provide an update in relation to the progress of the External Audit reports 2018/2019 and 2019/2020.
The DCFO explained that, Mr Sheriff of Deloitte, the Council’s external auditor, would be providing a verbal update to the Committee. The DCFO advised that officers had been waiting for receipt of the auditor’s progress report in relation to the external audit reports 2018/2019 and 2019/2020, but this had not been received until late in the day on 13 November 2020. This had given officers no time to review and agree its contents prior to its presentation to the Committee.
Mr Sheriff (Deloitte) shared the content of the update with the Committee and all those present during the remote meeting. He apologised for the significant delays in presenting the external audit report 2018/2019. The external auditor explained that by the time it had received the necessary ledgers in November 2019, it had already committed its resources to other projects. As a result, it was not possible to begin the audit until June 2020, with the external audit for 2019/2020 commencing shortly after.
Mr Sheriff (Deloitte) highlighted that due to the Covid-19 pandemic, many factors had been working against all of those involved, which was slowing how efficiently work could be done. This included current working arrangements, making it particularly difficult to undertake complex work, and to collaborate, investigate and resolve matters with the Council’s finance team. He advised that despite the current complexities, Deloitte was currently working on putting together its position on all outstanding items and when the matters could be resolved or closed out.
The Chair invited comments from the DCFO.
The DCFO apologised to the Committee that the information from Deloitte had not been able to be accompanied by an officer report, due to its late receipt. The DCFO highlighted officers’ disappointment that Deloitte committed insufficient resources to complete the project in a timely manner, leaving outstanding issues that were yet to be resolved. He further highlighted that despite these issues, the Council and Deloitte were committed to working together, discussing and resolving outstanding issues and agreeing to a solidified plan in terms of direction and how the audit would be delivered.
The Committee requested an estimate of time and cost from Deloitte in respect of completion of the external audit reports 2018/2019 and 2019/2020. Mr Sheriff (Deloitte) explained that confirmation of completion of the external audit results would be dependent on issues that had yet to be identified and resolved, and therefore he could not give an estimated time of completion.
The Committee expressed its surprise and disappointment on the continued delays and Deloitte’s inability to provide a timeframe and assurance that the work could be completed with the fixed audit fee. It further expressed its displeasure that the information received in respect of the update on the outstanding external audits was sent late to officers, thus giving insufficient time for proper consideration.
The Committee queried with Deloitte the number of staff needed to complete the external audit and whether or not there was anything it could do to help move the process along going forward. Deloitte confirmed that an external audit would normally comprise a team of 3 to 4 auditors working over a six-week period in order to undertake the bulk of the testing required.
The Committee requested that officers and Deloitte agree a plan as to what items were outstanding, who was responsible for their completion and when the items would be completed. The Chief Finance Officer agreed that this was a sensible approach in order to move forward in a productive and transparent manner.
The Committee discussed options regarding bringing the matter to the attention of all Councillors at Full Council either at its meeting in November 2020 or in February 2021, and the Chair sought advice from the Senior Committee Officer (SCO). The SCO confirmed that the agenda had already been dispatched for the Council meeting in November and this would not meet the requirements for an urgent decision, but the matter could be highlighted to Members by way of a question to the Chair of the Committee, rather than as a resolution of this Committee. It was confirmed that the Committee could request an additional meeting to receive the requested update on outstanding items for completion of the audit, and extend an invitation to all Councillors to attend. In addition, it could make a decision at its next formal meeting whether to report formally to Full Council in February 2021 on any further action required.
The Committee adjourned for a period of 10 minutes to receive an explanation of this advice in full, and on resumption of the meeting this was repeated in public for transparency.
The Chair thanked Deloitte for its update.
Resolved:
1.
That officers, in consultation with Deloitte,
produce a list of the actions outstanding in respect of the
external audit 2018/2019 and 2019/2020, the responsible authority
and timescales for completion; and
2.
That an additional meeting of the Committee be held to receive the
list of outstanding actions in respect of the external audit
2018/2019 and 2019/2020 prior to its next scheduled meeting in
January 2021.