Issue - meetings
2023/24 External Audit Update
Meeting: 30/01/2025 - Audit and Governance Committee (Item 43)
Purpose:
This report presents the Audit Findings Report and Audited Statement of Accounts for the period 1 April 2023 to 31 March 2024.
Recommendations:
That the Audit and Governance Committee resolves to:
- Note the contents of the report and annexes.
- Approve the Statement of Accounts 2023/24, including the Annual Governance Statement; and
- Authorise the Chief Finance Officer and the Chair of the Committee to write a Letter of Representation on behalf of the Committee and Council to Bishop Fleming to enable the opinion to be issued.
Additional documents:
- Annex A WODC Audit Completion Report 2023-24, item 43
PDF 2 MB
- Annex B WODC_New SoA 2324 draft post audit restated, item 43
PDF 2 MB
- Annex C Prior Period Adjustments, item 43
PDF 163 KB
- Annex D WODC letter of representation FY24, item 43
PDF 155 KB
Minutes:
The report presented the Audit Findings Report and Audited Statement of Accounts for the period 1 April 2023 to 31 March 2024.
The Key Audit Partner of Bishop Flemming introduced the report, highlighting that:
- It had been Bishop Fleming’s first audit of the Council.
- The audit findings report had focused on the accounts, the narrative of the accounts and the Annual Governance Statement.
- The RAG ratings were subjective but provided a useful visual summary.
- The vast majority of outstanding items had been dealt with.
- Local Government Pension funds were starting to go into surplus which required a specific accounting treatment called an asset ceiling calculation.
- The audit adjustments (section 6 of the Bishop Fleming report) that were material had all been made.
- Changes around disclosure and misstatement were intended to provide greater clarity.
- The management letter points (section 7) were relatively minor recommendations to improve things going forwards.
- The Key Audit Partner would not be able to issue a certificate at the end of the process due to a request from the National Audit Office.
In response to questions, the Chief Accountant clarified that the misstatement included in the report related to the valuation of fixed assets was not an error in the accounts. The valuations were undertaken by external valuers and the value in the accounts was the value from their report. During the audit process, the valuers were asked by the external auditors to go through their methodology and the auditors concluded that the valuations had been “rounded down” by £188,000. This was not communicated to the finance team until the draft audit findings report was received. The Director of Finance explained that the accounts were produced with the information available.
In response to a question about the impact and meaning of the LGPS being in surplus rather than deficit, the Chief Accountant explained that it was only as a result of the high interest rates over the last 2-3 years that had significantly increased the value of the fund assets and created an asset value. In this situation, the Council is required to calculate an “asset ceiling” to estimate the future value of existing liabilities of the pension scheme and include it in the pension scheme valuation.
The auditors requested that the Actuaries undertook this calculation for the 2022/23 financial year which in this instance resulted in a prior period adjustment of £3,085m as detailed in section 6 of the Audit Findings report. This had no effect of the outcome of the 2023/24 accounts, it was an adjustment to the opening balance of the pension scheme only. It was confirmed that the Council was not permitted to take any benefit from the scheme being an asset i.e. to reduce pension contributions, for example.
The Chief Accountant explained how credit and debit items were accounted for in the Statement of Accounts and how staff shared with Cotswold District Council were accounted for.
The Committee questioned whether the audit fees were to be confirmed. The Key Audit Partner clarified ... view the full minutes text for item 43