Agenda item

(A report by KPMG, External Auditors)

The Engagement Director, KPMG presented the final external audit completion report. Key updates included the finalisation of work associated with the valuation of land and buildings and the local government pension scheme liability. The report concluded with an unmodified, unqualified audit opinion on both the Council's financial statements and value for money arrangements. Members noted that the draft report had been considered by the Committee at its meeting on 14^th October 2024.

The Engagement Director, KPMG highlighted the following key sections:

·       Uncorrected audit misstatements (page 24-25)

·       Corrected audit misstatements (page 26)

·       Audit misstatements in disclosures (page 27)

·       Control deficiencies (page 32 and 36)

·       Value For Money

The Engagement Director, KPMG advised that a lot of positive assurance could be taken by the Committee on the status of the organisation now and going forward into the future.

The Chairman requested clarification on the billing arrangements and the additional fees charged. The Engagement Director, KPMG advised that the additional fees were due to inefficiencies, timeline changes, and additional audit effort required for the valuation of land and buildings and pensions arrangements. He agreed that the details would be circulated to Committee members outside of the meeting.

Independent Co-opted Member, Mr Gideon Hall, raised a question regarding the rationale behind the increase in audit fees from £42,000 in 22/23 to £131,000 in 23/24. The Engagement Director, KPMG advised that the increase was due to the re-tendering of the public sector auditors' appointment contract, reflecting the issues within the market and the new agreed fees.

Independent Co-opted Member, Mr Adam Cartwright, sought clarification on property valuations and whether they include prior adjustments. The Engagement Director, KPMG advised that the identified issues were for the current year only. The predecessor auditor's work had been reviewed, and no re-audit of their conclusions was necessary.

Mr Cartwright sought clarity on the materiality threshold and its agreement with the Section 151 Officer. The Chief Finance Officer (PSPSL) advised that the disclosure for related parties needed further detail, and a threshold would be agreed with the Section 151 Officer for future disclosures.

Mr Cartwright queried the status of the Council's whistleblowing policy and anti-fraud and corruption policy. The Chief Finance Officer (PSPSL) advised that a review of the whistleblowing policy had commenced, and an update would be provided following the meeting.

Councillor James Cantwell sought clarification on the communication issues relating to the department responsible for expenditures. The Engagement Director, KPMG advised that extensive procedures had been carried out, and that had been the only issue found. No wider communication issues were identified.

Councillor Mike Gilbert queried the additional liability arising from the minimum funding commitment. The Engagement Director, KPMG advised that it was a technical accounting requirement associated with IFRIC 14, recognising the value of secondary contributions needed to cover the deficit.

Councillor Paul Gleeson requested that future agendas pages be created more consistently in respect of page numbers and landscape pages.

RESOLVED:

That the report be noted.

[Councillor Helen Staples entered the meeting at 6.39 p.m., during consideration of the above item.]