Agenda item

The Council’s Chief Accountant, updated the Committee on the Council’s Draft Statement of Accounts 2020/21 and the provisional plan for the audit of the Statement of Accounts for 2020/21 (SOA).

The Committee were reminded that the final accounts could not be signed off until audited by the external auditor. The draft Statement of Accounts were currently subject to a period of public inspection which was due to end on the 10th of September.

The accounts were required to be audited by the 13th of September but given the current circumstances, post pandemic and only recent sign off of the Statement of Accounts for 2019 /2020 , the Committee were informed by the external auditors that this timescale was not realistic and achievable.

The 2020/21 draft statement of accounts did highlight that the Council performances and achievements during this year were not significantly different to the previous financial year’s performance.

The external auditor continued to outline the external audit process of the Council’s financial accounts and timelines for completion. They were aiming to be on site by the first week in October and would combine interim testing process with the final accounts audit in the next three months, culminating in a final report to Committee by January 2022.

The external auditor highlighted, as set out in the report, how the use of resources had changed. This was due to the new Code of Audit Practice which became effective from the first of April 2020 for the 2020/ 21 financial year.

The changes to the Annual Audit reporting and scope of work were further outlined. The Committee noted that there would be a rebadging and adjustment to the criteria to be considered. This would include the external auditor considering how the Council could seek to improve value for money activities. Also, the way in which the external auditor[ BDO ]reports to the Council would be different to previous years. Instead of providing a qualification or non -qualification conclusion, there would now be a lengthy annual auditor report. This would replace the Annual Audit letter and would be detailed reporting to cover all the criteria considered in the Audit, highlighting any issues considered. This would allow the Auditor to identify areas of weakness and set this out to the local Authority, allowing constructive recommendations from the external auditor. The Committee would be familiarised with this new way of reporting in the lead up reports, and prior to the final report .The Committee noted that due to the market conditions and pandemic , this fuller report would likely follow the January deadline.

The external auditor had been made aware of the pre -election period starting in March 2022 and would work towards issuing their report prior to this period.

In response to questions from Councillors Ibrahim, Emery, the following information was provided:

·         With regards to the Comprehensive Income and Expenditure Statements on pages 39 and 40 of the agenda pack and differences in the HRA calculation, the Assistant Director for Finance advised that the accounts on page 39 were for the Council as a single entity and the accounts on page 40 were for the Council as a group holding, including subsidiaries such as Alexandra Palace and Homes for Haringey. Agreed Councillor Ibrahim follow up with an email setting out her queries on the presentation of the figures for the Housing Revenue Account to the Chief Accountant. He would further provide analysis on what makes up the balances for these accounts.

·         Audit process timetable – External auditors had provided advice to MCHLG that the 13th of September was not realistic. The external auditor advised that, as a sector, they were still completing a few audits for the 2019/2020 year and very few firms had been able to complete the required interim work for the 2020/21 Statement of Account. The timeline in the report was a realistic timetable to be able to comply with.

·         Considering page 143, the Pension Fund Liabilities, the contingent Liabilities and contractual commitments to the partners listed, the Head of Finance, Pensions and Treasury outlined the arrangements, investments,  and commitments between the Council and Pension Fund managers for this process. It was explained that what was included in the report was the potential outstanding funds for the Pensions Managers, from these listed organisations, to seek from the Council. The content of the infrastructure investments was advised, and this related to renewable energy. This information was for noting by Corporate Committee as Pension Committee and Board had the responsibility for overseeing the Pension Fund performance and investments.

RESOLVED

To note the contents of the report, the appended Draft Statement of Accounts and the above update given at the meeting by BDO LLP, in relation to provisional plan for audit of the 2020/21 SOA.

Reason for Decision

None

Other options considered

None