Agenda item

To consider the Interim Auditor’s Annual Report on Spelthorne Borough Council for the year ended 31 March 2024.

The Committee received a report from Grant Thornton on the Interim Auditor’s Annual Report for the year ended 31 March 2024.  This report brought together a summary of all the work undertaken for Spelthorne Borough Council during 2023-24. The core elements of the report was the issuing of an opinion on the financial statements,  the commentary on value for money (VFM) arrangements and a the consideration of whether there were any issues arising during the work that required use of auditor powers. Joanne Brown, Audit Partner at Grant Thornton provided an overall summary of their Value for Money assessment of the Council’s arrangements which focused on a criteria consisting of Financial Sustainability, Governance and improving Economy, Efficiency and Effectiveness. A risk assessment and Auditor judgement on arrangements was issued which highlighted significant weaknesses in arrangements identified and key recommendations were made.

The report highlighted that a qualified audit opinion on the 2023-24 financial statements was expected to be issued on conclusion of the work set out in the Audit Findings Report. The opinion will be qualified under the backstop legislation, and recent year accounts having been disclaimed under the backstop arrangements.  In relation to use of auditor’s powers, as the external auditor, Grant Thornton were likely to make statutory recommendations under schedule 7 of the Local Audit and Accountability Act 2014 given the number of significant weaknesses that had been identified in this report, together with the Audit Finding’s report.

The Committee queried the implications of publishing this paper as a public interest report. The representative from Grant Thornton clarified that under auditor’s powers, public interest reports were initiated under separate circumstances and the preferred route in this case was to make statutory recommendations to the audited body to be considered and responded to publicly, and not to issue a public interest report. 

The Committee raised concerns regarding various narratives in the report, particularly around the governance weaknesses identified regarding member behaviour and actions which were not substantiated. The representative from Grant Thornton responded by clarifying that interviews were undertaken with officers and a couple of councillors to gather evidence to present observations in the report. The narrative in some sections would be relooked and possibly adjusted in the final iteration of the Auditor’s Annual Report. Other members agreed that some of the narrative provided in the governance weaknesses was a true reflection however was not entirely accurate. Members generally discussed the need for better scrutiny arrangements at the Council, and that this report should be highlighted to all Councillors and made aware of its importance.

As with the Audit Finding’s report, the Council’s Management Team proposed to follow the same approach by adopting a detailed action plan be presented to this Committee at all future meetings to address the key recommendations from Grant Thornton.

It was proposed by Councillor Howkins, seconded by Councillor Nichols and resolved to suspend Standing Order 38.3 to continue the meeting beyond three hours.

It was proposed by Councillor Boughtflower and seconded by Councillor Woodward 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 Interim Auditor’s Annual 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.