The report of the Council’s external auditor (Mazars) is enclosed.

The Committee considered the Council’s External Auditors (Mazars) Audit Strategy Memorandum for the year ended 31 March 2021.

The document provided information on

·         The audit scope (including group audit), approach and timeline

·         Signficant risks and key judgement areas

·         The extended auditors report; and

·         Value for Money

The document discussed national timescales for 2020/21 requiring the Council to produce their draft Group accounts by the end of July 2021 and for the audit to be completed by the end of September 2021, effectively two months earlier than the deadlines agreed for 2019/20.

Mazar’s asserted that this timescale would be extremely challenging, particularly given the complexity of the Council’s financial statements, the related complexity of their own external audit processes, and the pressure this placed on the Council’s finance team to deliver draft financial statements and supporting working papers within the allocated timeframe. On that basis, Mazar’s had resolved to complete the Council’s audit by November 2021 therefore allowing the Council two additional months to produce the draft Group financial statements and supporting working papers to enable completion of the audit in a well managed and deliverable manner.

The main challenges to meeting the September 2021 timetable were described as:

·         The size, number and complexity of the valuations of Council and Group land & buildings and investment properties – this was an area of significant difficulty in 2019/20, and the audit work requires significant information, and assistance, from the Council’s three external valuers. The previous year’s completion report recommended improvements in the audit trail from the Council’s valuers to support the valuations. As a result, Mazar’s planned to commence detailed audit activity in that area in July, in advance of the rest of the audit work in order to mitigate the risk of delays in completing the work.

·         Completion of audit work by the auditor of GM Pension Fund – Mazar’s obtained assurances from the auditor of GMPF on several areas relating to the Council’s pension asset and liability. The GMPF audit is planned to be completed by the end of July and at this stage we do not anticipate any delays impacting on the Council’s audit completion.

·         The timetable does require the Council’s draft accounts and working papers to be available for the start of our audit. We have planned our main audit work to commence at the start of September to ensure that sufficient contingency is inbuilt.

Ms Murray said that the Committee would receive a further report in November 2021 which would explain the work that had taken place.

The Committee sought assurances concerning the risk of penalties in not keeping to the national timetable. Ms Murray confirmed that Mazar’s were not aware of any sanctions that would apply for the submission of a late Audit opinion. She explained that the new deadline had been set by the Ministry of Housing, Communities and Local Government (MHCLG) following a consultation in which there had been unanimous supplier concern about the ability to attain a managed position in bringing the timescale forward. She added that in issuing a late opinion she was both confident of achieving a managed situation and the ability to issue in November 20201. Mazar’s would work with the Council’s Finance team to explain to MHCLG that the opinion was underway but not yet complete and that the complexity of the Council’s finances was at the heart of the issue and stressed the importance of doing the right work at the right time for the avoidance of risk.

Decision

1.    To note the report and in doing so, note that the external audit opinion will be submitted in November 2021.

2.    To note that a further report on audit activity undertaken by Mazar’s will be submitted to the Committee’s November 2021 meeting.