Agenda item

To consider the Audit Findings for Spelthorne Borough Council for the year ended 31 March 2024.

Cover report to follow.

The Committee considered a paper from Grant Thornton on the Audit Findings for Spelthorne Borough Council for the year ended 31 March 2024.

The report summarised the key findings and other matters arising from the statutory audit of Spelthorne Borough Council and the preparation of the Group and Council’s financial statements for the year ended 31 March 2024. Certain issues were encountered as part of this process, which included the Council not having had an external audit for 5 years and the increased requirements of the audit which had evolved over that period. As sufficient and adequate evidence was not obtained to form an opinion on the 2023/24 accounts, a disclaimer of audit opinion was issued in accordance with the audit backstop legislation. Joanne Brown, Audit Partner at Grant Thornton provided a summary of the key headlines detailed within the report, the significant risks highlighted in the financial statements, the Value for Money arrangements and Independence considerations. The report also featured appendices on a communication plan to those charged with governance, an Action plan on the Audit of Financial Statements, Follow up of prior year recommendations, and other key areas of audit issues identified alongside developments and a summary of fees.

One of the key findings in the report was related to the insufficient capacity and capability within the existing council financial team to produce suitable accounts for audit with accompanying audit evidence. Spelthorne’s Management Team acknowledged the pressures on the Finance Team and indicated plans to submit significant budget growth to support the team which would be subject to Council agreement. The impact of the Mole-Valley Financial Partnership was also discussed, which had not worked out as expected, however, management clarified we would decouple from this arrangement very shortly and initiate a restructure of the team. Additional training would also be offered to staff on working papers, journals, the requirements of external auditors and undertaking a matching exercise of assets and liabilities.

As a way to address recommendations and risks in the report, the Deputy Chief Executive, Terry Collier suggested the possibility of scheduling an Extraordinary Audit Committee (in agreement with committee members) to bring back detailed Action Plans, which combined together the Management Responses in both the Audit Finding’s and Interim Auditor’s Annual Reports 23-24. The Action Plans were intended to be presented in a way to enable the Committee to then track progress (such as with a RAG system) with the Action Plans coming back to be reviewed at every meeting of the Audit Committee. At the same Extraordinary Audit meeting, a schedule of the amendments made to the draft 2023-24 Statement of Accounts would also be compiled.

The Committee extended thanks to Grant Thornton for their thorough finding’s and reinforced the point that many issues highlighted in the report would have been detected if earlier external audits had taken place. Members raised concerns about tracking actions and the impact of Local Government Reorganisation on the finance team’s work respectively. The Management Team confirmed that despite reorganisation plans, internal issues including the performance of the Finance Team will be prioritised. Committee members also expressed shock at the lack of training and resources, calling for immediate action and regular updates to Councillors on progress. The general discussion amongst members underscored the need for continuous staff development, better evidence for decision making, and transparency on issues with all members across the Council.

It was proposed by Councillor Nichols and seconded by Councillor Boughtflower to make an amendment to the second recommendation to approve the management responses as set out in the report, in principle, subject to seeing more detailed and refined responses at an Extraordinary Audit Committee in February 2025.

The Committee resolved to agree the amendment to the original motion.

The Committee resolved to:

1.     Accept the Audit Findings Report 23-24

2.     Approve the management responses as set out in the report, in principle subject to seeing more detailed and refined responses at an Extraordinary Audit Committee in February 2025.