Agenda item

Report FSD20091

The report set out the current position and significant issues arising from the work carried out in relation to the external audit of the Council’s 2019/20 main Statement of Accounts and Pension Fund. Due to the coronavirus pandemic the Accounts and Audit Regulations had been revised to allow local authorities more time to produce and audit their accounts. Bromley’s draft accounts had been approved on 30^th June 2020, well before the new Deadline of 31^st August, and the accounts and related documents had been made available for public inspection for thirty working days until 11^th August; no objections had been received. 

The deadline for completion of the audit by the external auditor and publication of the final accounts had been moved from 31^st July to 30th November 2020. Although EY had made good progress in most areas, there were some significant issues outstanding that required considerable additional work. This was a technical matter regarding errors made by the Council in asset accounting and depreciation calculations and involved adjusting calculations from the previous year. The pandemic had also led to delays in providing documents to EY. A number of other authorities across London had also missed the 30^th November deadline.

Members queried whether these errors should have been identified in earlier years by the Council’s previous auditor, KPMG. It was confirmed that EY had taken over from the 2018/19 audit onwards, and it was extremely unlikely that earlier accounts would be re-opened, even though the closing certificates had not yet been issued. The audit regime changed over time, and the 2019/20 audit involved greater scrutiny of asset accounting with a higher level of materiality. Agreement had not been reached on the level of fees that this would involve. 

A revised timetable had been agreed for completion of the audit, leading to a report to the Committee’s meeting on 23^rd March 2021 - EY would be returning to the Council on 8^th February to complete their work. Members suggested that this left a lot of time until then, but officers assured the Committee that this time was needed for the Council to work through the issues, and that there would still be regular contact with EY. The Chairman confirmed that she and the Vice-Chairman were having monthly meetings with the officers and would update Committee members on progress.

Janet Dawson of EY attended the meeting, accompanied by Adrian Balmer. She confirmed that property valuation had been a significant issue in the 2018/19 audit, and these issues had been taken back across three years. In her view, allowing time at this stage for officers to work through all the issues and queries before EY re-engaged formally in February was the most efficient way to deal with the 2019/20 accounts and prepare for the 2020/21 audit.

RESOLVED that the external auditor’s Progress Report be noted, including  (i) details of overall progress against the audit timetable and a revised completion date for the audit, (ii) significant issues and material amendments identified through the audit process and (iii) the position concerning outstanding objections and the impact on external audit work.