Verbal update.
Minutes:
The Committee received a verbal update from Leigh Lloyd-Thomas from the external auditors, BDO on the Audit of the Final Statement of Accounts 2019/20. The Committee was advised that the onset of Covid had significantly impacted the ability of the sector to undertake all of the required audits within the given timescales and that only around half of local government audits had been signed off by September. BDO advised that Haringey’s audit started around a month ago. It was anticipated that the field work would be completed by Christmas and that it would be ready to be signed off in January. The Committee noted that the Council had submitted the final accounts on time but that auditors had simply not had the staff to complete it on time.
BDO fed back that they had been able to sign off three ongoing objections to the statement of accounts. These objections related to: Spending on the initial phase of the Haringey Development Vehicle; contract monitoring of PFI contracts for schools; and an allegation of non-compliance with penalties for non-payment of Council Tax. In all three cases the auditors had written to objectors to explain that they had investigated and found nothing of concern. BDO also advised that they had also received one new objection to the current statement of accounts which related to governance structures around the Council housing programme. This specifically related to a case were a property was purchased, was subsequently deemed to be surplus to requirements and then put back on the market for significantly less than the purchase price. BDO advised that there may be a very good reason for this, but that further investigation was required before a determination could be made.
The following was raised in discussion of this item:
a. In response to a question, Leigh Lloyd-Thomas from BDO advised that they had not found any issues to date that crossed the materiality threshold but cautioned that there was still work to be done and that he could not say for certain that there wouldn’t be going forward.
b. In response to a question, BDO reassured Members that the objections raised at present were not considered material and would not affect the auditor’s ability to certify the accounts as true and fair.
c. BDO advised that since the final accounts were compiled, Kingston Council had lost an appeal around repaying a surcharge for tenants’ water rates and that any council who had undertaken a similar scheme with Thames Water was expected to repay tenants for the excess amounts charged. It was noted that Haringey’s legal and finance officers were looking at the potential exposure for the Council. In response to a question, BDO advised that they could not determine whether this would exceed the materiality threshold until Haringey had determined the number of people who may be affected, and the amounts of money involved.
d. The Committee raised concerns about the fact that the deadline for the signing off of the accounts would be missed and sought assurances around whether the imposition of any further lockdowns could impact the timeline further. In response, BDO advised that they had effectively never come out of lockdown as they were not able to undertake site visits or face to face meetings. So any further lockdowns would not unduly further impact their ability to complete the audit. It was commented that Covid and lockdowns had resulted in it taking up to 50% longer to complete an audit and there had been no corresponding increase in staffing levels to offset this.