Draft minutes

RESOLVED – That the Chairman be authorised to sign, as a record, the minutes of the meeting of the Committee held on 28 July 2022.

Councillors Endsor and Severn referenced, for the purposes of transparency, their positions as Westmorland and Furness Shadow Authority Councillors.

There were no excluded items on the agenda.

The Finance Lead Specialist (Section 151 Officer) introduced the Audit Committee 2022/23 Work Programme and noted that the items that had been marked to follow on the agenda published for the (adjourned) 6 October meeting, had been circulated to Members ahead of the meeting.

Members were informed that the Annual Review of Anti-Fraud Policy and Activity had been delayed and would be brought to the 8 December meeting.

The Finance Lead Specialist (Section 151 Officer), in response to a query from Members, noted that work was underway to ensure that items that would normally have gone to the April Audit Committee meeting, would be brought to the March 2023 meeting. This meeting had been brought forward due to the Local Government Reorganisation (LGR) process that would mean SLDC would be abolished and replaced with the Westmorland and Furness Council following 31 March 2023.

Members requested an update on the arrangements being made for the District Council Audit Functions. The Finance Lead Specialist (Section 151 Officer) noted that a legacy team, which would be created at the two Unitary Authorities created by the LGR process, would prepare the accounts for the current sovereign authorities and that Grant Thornton would continue to work with the District and County Council to audit the accounts. She added that work was underway to appoint Internal Auditors and develop the Constitution as well as the Whistle Blowing and Anti-Bribery policies.

Following a request from Members, the Finance Lead Specialist (Section 151 Officer) undertook to provide an update report on the progress made on the closing down of the Sovereign Councils’ and the development of the new Unitary Authorities’ Audit Functions.

RESOLVED – That the progress against the 2022/23 Work Programme be noted.

Note – Following a request from the Finance Lead Specialist (Section 151 Officer) the Chairman proposed that the item to be considered under Minute No. AUD/19 below be brought forwards in the agenda.

The Internal Audit Manager introduced the Internal Audit Progress Report 2022/23 (October 2022). Appendix 1 provided a summary of the progress against the Internal Audit Annual Plan as at September 2022. She informed Members that no audits had been completed since the previous meetings and that no changes had been made to the Annual Plan, however an additional review of Payroll was to be undertaken at the request of the Finance Lead Specialist (Section 151 Officer).

Members were informed that work was underway on the remaining reviews set out in the Annual Plan and the reviews were on track to be brought to the March 2023 meeting.

With regard to the additional review of Payroll, the Finance Lead Specialist (Section 151 Officer) highlighted that External Audit had asked for additional assurances, which could be provided by an additional review by Internal Audit.

The Internal Audit Manager drew members’ attention to the follow up review (Appendix 2), which highlighted that 37 recommendations were monitored, with 22% of those being implemented. 

Members expressed concern that Appendix 2 noted that 29 recommendations were outstanding. It was felt that the proposed implementation date for a number of these recommendations had been delayed a number of times without being implemented. In response, the Finance Lead Specialist (Section 151 Officer) noted that the recommendations were reviewed by Leadership Team and the Internal Audit Manager added that those that may not be implemented due to the LGR process could be marked separately to focus on the recommendations that could be implemented before the end of March 2023.

RESOLVED – That

(1)        the progress achieved in 2022/23 in completing the Audit Plan set out in Appendix 1 to the report be noted; and

(2)        the summary of progress achieved in implementing recommendations from previous reviews as set out in Appendix 2 to the report be noted.

The Finance Lead Specialist (Section 151 Officer)/ Finance Specialist (Deputy Section 151 Officer) introduced the draft Statement of Accounts and Annual Governance Statement 2021/22. She noted that the updated report and appendices had been circulated ahead of the meeting and that they had superseded the previous version.

Note – Members passed a resolution to briefly adjourn the meeting at 6.53 p.m. The meeting was the reconvened at 6.56 p.m.

The unaudited Statement of Accounts had been approved and published by the Finance Lead Specialist (Section 151 Officer) on 5 July 2022 and had been opened up to scrutiny and comment from the public on the 8 July 2022 as well as being reported to the 28 July 2022 Audit Committee. There was a statutory deadline of 30 November for publication of the 2021/22 Statement of Accounts, or as soon as reasonably practicable after receipt of the Audit Opinion

The Finance Lead Specialist (Section 151 Officer) informed Members of a number of amendments which had been identified in the updated Appendix 1, which was circulated before the meeting and that the letter of representation had been adjusted. The report proposed that the Chairman be authorised to sign the Statement of Accounts and sign the letter of representation once the amendments had been made.

Members expressed thanks to officers for their continued hard work through an extremely difficult period due to Covid-19 and the pressures of Local Government Reorganisation.

Members were asked to approve recommendations 1-5 as set out in the report and consider recommendation 6 as set out in the report under Agenda Item No. 8 (External Audit Opinion on Accounts – Audit Findings Report).

RESOLVED – That

(1)        the Statement of Accounts 2021/22 be approved;

(2)        the letter of representation be approved;

(3)        the Chair of the Audit Committee be authorised to sign the letter of representation and the Statement of Accounts on behalf of the Committee;

(4)        the Chair of the Audit Committee be authorised to re-sign the Statement of Accounts in the event of further amendments following the final audit findings report; and

(5)        the Annual Governance Statement action plan be noted.

Copies of the report, which was marked “to follow” on the Agenda, had been circulated to Members on 4 November 2022.

Hebe Dyson, External Audit presented the Audit Findings report. The report presented the observations arising from the audit that were significant to the responsibility of those charged with governance to oversee the financial reporting process as required by International Standard on Auditing (UK) 260.

It was highlighted that External Audit had not completed the Value for Money work and so were not in a position to issue the Auditor’s Annual Report. They expected to issue their Annual Report by the end of February 2023, which was in line with the National Audit Office’s revised deadline. As part of the work, External Audit had considered whether there were any risks of significant weakness in the Council’s arrangements for securing economy, efficiency and effectiveness in its use of resources. To date, no weaknesses in the Council’s arrangements had been identified.

External Audit had substantially completed their audit of the Council’s financial statements and, subject to outstanding queries being resolved, anticipated issuing an unqualified audit opinion following this meeting.

Members were asked to note and receive the Audit Findings made by the External Auditors and also note the External Audit action plan, which formed recommendation 6 as set out in the report under Agenda Item No. 6 (Audited Statement of Accounts and Annual Governance Statement 2021/22) and formed Appendix A to the Audit Findings Report.

RESOLVED – That

(1)        the Audit Findings made by the External Auditors for the year ending 31 March  2022 be noted and received; and

(2)        the External Audit action plan be noted.

The Finance Lead Specialist (Section 151 Officer) informed the Committee of progress being made on preparations for next year’s budget and Local Government Reorganisation. She highlighted the current year budget and challenges that had been faced as well as the pay award for officers which had been higher than anticipated.

Members were informed that a mini-budget would be brought to Council for approval in December 2022 due to cost pressures around fuel and energy as well as the impact of inflation on contracts. The Finance Lead Specialist (Section 151 Officer) explained that officers were confident that the issues would be resolved before the reports went to Cabinet and Council in December.

Members discussed the impact of the current economic situation and queried if the Council had received any additional financial support from the Government.

RESOLVED – That the verbal update be noted.