Jackson Murray (Director, Grant Thornton) introduced the report and highlighted the following:

a)    The 2021/22 and 2022/23 accounts had been subject to the backstop disclaimer in advance of the nationally set deadline;

b)    The deadline for the 2023/24 accounts was 28 February 2025, and a modified audit opinion was expected for that year. The 2024/25 and 2025/26 accounts were also anticipated to be affected in the same way, as set out in national guidance, as a result of the backstops;

c)    Detailed work for the 2023/24 audit took place in October 2024 and an audit opinion would be issued by the end of February 2025;

d)    Plymouth City Council (PCC) and Grant Thornton had been working together to complete the majority of the audit for 2023/24 within a matter of months and that momentum was something everyone was keen to continue to reach an unqualified opinion in the future;

e)    The Audit Certificate, that would formally close the audit could not be issued until the National Audit Office (NAO) completed their work on all government accounts. PCC accounts could only be objected to in a 30 day period, which had passed;

f)     Any errors over £385,000 had to be formally documented and reported;

g)    The journal threshold for checks was £500,000, and no issues had been found in those audited;

h)    Transposition errors had been found in the asset register;

i)     A disclosure amendment had been required as the depreciation change had been posted in the incorrect financial year, but values were correct;

j)     Grant Thornton had identified some factual errors and changes of which £3.9 million had been updated in the final set of accounts, as well as some further estimation differences of £4 million where the data was not necessarily wrong, but the data was not conclusive enough, the latter had not been adjusted for because it was not factual;

k)    Within the pension fund auditor’s audit of the pension fund, some variances in asset values had been identified, largely due to timing differences, but the accounts had been closed on the best information available at the time;

l)     There were no significant findings from an audit done on major IT systems that impacted on the financial statements, though a theoretical risk around admin access rights in Capita One had been raised.

In response to questions, supported by David Northey (Service Director for Finance) and Carolyn Haynes (Lead Accountancy Manager), it was further explained:

m)   A hot review was a review of accounts technically that took place whilst an audit was underway;

n)    Lead accountants and lead accountancy managers could approval journals and access had been adjusted, so that a journal could not be processed without it being approved by an accountant;

o)    The key issues were all included within the report;

p)    A report had been sent to Grant Thornton from PCC to explain that no inappropriate changes had been made when seven user accounts had been granted admin access for Capita One;

q)    The detailed testing of assets was done on a sample basis and the outcome then projected;

                      i.        The extrapolated error in asset value was down to overvalue on some assets and undervalue on others, but it wouldn’t be adjusted because it was of low materiality;

                     ii.        The materiality level was £7.7 million;

                    iii.        None of the asset valuations had any impact on Council Tax, the general fund or the budget and were calculations for the Statement of Accounts;

r)    Access to Civica systems had to be in place for Civica and Auditors, but it was access to view data only and this could be monitored;

s)     The team had been under pressure with several financial years of accounts still open, which had led to the late issue of full instructions to the valuer as well as trying to agree an asset programme;

t)     The Corporate Management Team received reports monthly on the transformation programme;

u)    There were proposed changes in governance for local government audit;

v)    CIPFA Audit Committee guidance set out a timetable for regaining assurance;

w)   The budget report to City Council on 24 February 2025 would include assurance from David Northey (As Section 151 Officer) that the Council’s reserves were at a satisfactory level;

x)    The materiality level was £7.7 million and therefore some adjustments were not made due to immateriality.

(Councillor Finn left the meeting during this item)