Agenda item

Consideration was given to the Council’s Audit Completion Report (ARC) which was attached to the report at Appendix 1 for the year ending 31st March 2021 as prepared by the Council’s External Auditor, (Mazars LLP). The ARC advised of the key issues in relation to the audit of the 2020/21 Statement of Accounts.

The ARC advised that the impact of the Covid-19 pandemic on the audit had been significant for a second audit year.  It was reported that although the Council’s finance team and management had co-operated fully throughout the audit, the requirement for the Mazars Audit team and Council staff to work remotely had meant that the audit work had taken longer to complete and finalise than would ordinarily be the case.  The Council’ finance and audit teams were thanked by the External Auditor for their support during the process.

The Committee was advised that work was nearing completion.  Details of outstanding matters in relation to the audit were highlighted in section 2 of the Audit report (Status of the Audit).

The Committee was reminded that details of the intended audit approach in Mazars Audit Strategy Memorandum had been presented to the meeting of the Audit Committee in June 2021 and that no changes to the approach had been made following this.  Details of the approach were highlighted in section 3 of the Audit report (Audit approach).

Findings on individual key audit matters, along with how the audit had addressed the key audit matters were highlighted in the Audit Report in section 4 (Significant Findings). 

One recommendation was made in relation to internal controls in section 5 of the Audit Report (Internal control recommendations) at level 3 (low level) in relation to the Housing Benefit to General Ledger reconciliations.

Outlined in the Audit Report at section 6 (Summary of misstatements) were the misstatements that had been identified during the course of the audit and details of misstatements that had been adjusted by management during the course of the audit.  It was reported that based on the work completed to date, there were no significant adjusted misstatements to bring to the attention of the Committee.

In response to an issue that had been highlighted in section 5 of the Audit Completion Report, in relation to Housing Benefit to General Ledger reconciliations, it was suggested and agreed that an update report be presented to a future meeting of the Committee, in relation to the matter.

In response to clarification sought around an error as detailed in Section 6 of the Audit Report, “testing of income received after the year end identified one government grant for £228k which related to a 2020/21 grant but had been received in May 2021” it was clarified that when the grant was received, the Council had already passed its cut-off date for the inclusion of transactions in the 2020/21 accounts and had recognised this income in 2021/22.  The Committee was advised that by applying the audit methodology, the £228k error had been extrapolated, and if the error was representative of the whole population, short term debtors and costs of services income would be understated by £1,174k.  It was explained to the Committee that the Council was working to an accelerated timetable  and a management decision had been taken  not to reopen the accounts due to the work, time and effort that would be required for such a comparatively small sum.

In response to queries form Members:

•           in relation to Value for Money (VFM) opinion, Members were advised that this would be provided with the Auditors Annual Report at the final conclusion of the audit, but so far, no significant weaknesses had been identified that would lead to the making of a recommendation.

•           In relation to whether it the Committee should be apply more scrutiny to the company and partnership arrangements of the Council, the Committee was advised that although some other Authorities had experienced financial difficulties as a result of companies /partnerships, Oldham was an authority taking less risks which limited any potential financial impact and that consequently this is not a priority issue for External Audit

RESOLVED –

1.         That the Council’s draft Audit Completion Report for the year ending 31st March 2021 be noted; and

2.         That an update report be presented to a future meeting of the Committee regarding the Internal Control recommendations relating to the Housing Benefit to General Ledger reconciliations as detailed in Section 5 of the Audit Completion Report.