Members will be asked to make any declarations of interest in respect of items on this Agenda.

No declarations of interest were made.  

To receive reports on business which, in the opinion of the Chair, should be brought forward for urgent consideration.

There were no items of Chair’s urgent business.

Carolyn Haynes (Acting Head of Finance) gave context on the meeting and highlighted:

a)    Apologised for the lateness of the reports;

b)    The Chartered Institute of Public Finance and Accountancy (CIPFA) guidance circulated to Committee Members had not been issued until 9 December 2024;

c)    The audit opinion had not been received until late on 3 December 2024 and the consequential reports then had to be written and assimilated;

d)    As of 30 April 2024, 369 sets of local authority accounts out of a total of 625 for the financial years 2020/21 and 2022/23 were still waiting to be audited;

e)    Local authorities across England and Wales had experienced a significant backlog in completion of audits for several years which had been reported as a crisis;

f)     In February 2024 the Ministry for Homes, Communities and Local Government (MHCLG) issued a joint statement with CIPFA and the Finance Reporting Council (FRC) on proposals to address the backlog as a three stage process;

g)    New statutory backstop dates for all finance years up to and including 2027/28 needed to be established;

h)    Long-term work was required to address the systemic challenges that had led to this audit backlog;

i)     13 December 2024 had been set as the backstop date for all outstanding audits up to and including 2022/23;

j)     Plymouth City Council had two financial year statements affected by the backstop for 2021/22 and 2022/23;

k)    The accounts for 2019/20 and 2020/21 would be signed off by 13 December 2024 with an unmodified opinion and were not affected by the backstop position;

l)     Draft accounts were published on the Council’s website and had been presented to the Audit and Governance Committee previously;

m)  Auditors were contracted audit to professional standards and in accordance with the code of practice;

n)    A Disclaimed Opinion from Grant Thornton was included within the report and was worded as follows: ‘Grant Thornton had not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial statements due to an outstanding legal issue which had now been resolved and capacity issues within Grant Thornton over the last four years, it had not been possible for Grant Thornton to complete their work on the audit for 2021/22 and 2022/23 and therefore they had issued a disclaimed opinion’;

o)    The Disclaimed Opinion implications included:

i) The Council had, in recent years, received an unmodified or unqualified opinion and the most recent accounts for 2019/20 and 2020/21 received an unmodified opinion. As this was a national issue affecting many local authorities, the Government may have to intervene to provide more assurance for those authorities receiving a disclaimed opinion under the statutory back stop arrangement;

ii) The Council would be working hard to ensure that they provided the necessary evidence in future audits to restore public confidence in accounts and to work towards receiving an unmodified opinion as soon as possible;

p)    The Public Sector Audit Appointments Panel set Audit Fees at a  ...  view the full minutes text for item 56.

David Johnson (Grant Thornton) introduced the report and highlighted the following points:

a)    Previous reports had given a detailed outline of the work that had been done to reach the conclusion for the factors set out in the previous item;

b)    This report provided short form audit findings.

The Committee agreed to note the report.

Carolyn Haynes (Acting Head of Finance) introduced the report and highlighted the following points:

a)    The changes to the accounts reflected changes which had been put through in relation to previous audit findings for 2019/20 and 2021 accounts;

b)    Changes had also been made to reflect the change in accounting treatment of the pension transaction in 2019/20, to move it from being a Capital Transaction to a Revenue Transaction;

c)    There was a negative working fund balance, however this would be resolved when the Capitalisation Directive was received;

d)    Associated Minimum Revenue Provision and Associate Reserve Movements had been removed in relation to the pension transaction;

e)    Changes had been made for the accounting treatment of the interest rate swap which was previously treated as a hedge transaction;

f)     Amendments had been made to the notes on Heritage Assets to include items below £100,000 and the special books collections;

g)    Corrections had been made to Property Plant and Equipment, arising from making annual depreciations charges on material assets values as at the 31 March.

The Chair reiterated:

h)     The Committee’s frustration at the lateness of the reports;

i)     That Committee members had not had appropriate time to consider the reports;

j)     He was putting the recommendations forward with reservations, but was reassured by officers.

The Committee agreed:

1.    To approve the Statement of Accounts for 2021/22 attached as Appendix A and the Statement of Accounts for 2022/23 attached as Appendix B. This was a Statutory Requirement, the Account and Audit Regulation 2015 required the accounts to be:

i) Considered by Committee;

ii) Approved by Committee resolution;

iii) Signed and dated by the person presiding at the Committee;

2.    To delegate authority to the Section 151 Officer in consultation with the Chair of Audit and Governance Committee to sign the letters of representation to Grant Thornton LLP for the Council and to sign the accounts;

3.    To note the amendments to the 2021/22 and 2022/23 accounts and that they would not be subject to an external audit but would instead be subject to the provision of the backstop legislation and were anticipated to be finalised before 13 December 2024;

4.    To consider the contents of the Audit Opinions for the Council (Appendices C and D); and

5.    The Letters of Representation attached as Appendix E & F were authorised and submitted to the Auditor.

The Committee agreed to note its tracking decisions document.

The Committee agreed to note its work programme.