The External Auditor presented the report and highlighted that compared to the previous year the timescale for Local Authority accounts was shorter with the accounts needing to be prepared by the Council by the end of May (previously June) and the audit completed on these accounts by the end of July (previously September). It was recognised that this would be a challenge particularly in the first year. He also commented that he had had good engagement with the Finance team during the audit.

The External Auditor highlighted two main issues for the Committee to be aware of:

1)    There had been a number of significant issues identified with the valuation of the Council’s Property Plant and Equipment (PPE), specifically specialist assets such as schools. As a result the Council has had to undertake significant work to re-calculate those figures (for 2015/16, 2016/17 and 2017/18). Issues had been flagged in relation to the work of the in house Council valuer and therefore External Audit had engaged their own experts to carry out specialist work to look at this, which would be commencing in due course. This was the most significant issues that the auditors had identified during the audit.

2)    Other areas had been identified as needing revising in the accounts including recharges in the Comprehensive Income and Expenditure Statement and a number of prior period adjustments which did not meet the accounting standards definition.

As a result of the significant PPE and other errors identified the External Auditor informed the Committee that the level of materiality used to inform audit testing had been reduced from the level communicated in the Audit Plan (March 2018). This reduction had meant that the External Auditor needed to revisit work conducted to date and carry out additional testing work.

Given these issues, the Committee was informed that the external audit was still in progress and the External Auditor was not in a position to issue the auditor’s report by the deadline of 31 July 2018. The External Auditor had arranged resources to carry the work out in August and the results would be brought to the next meeting of Standards and General Purposes Committee in September 2018.

The External Auditor advised that, as highlighted in the report, in regards to value for money conclusion the Local Authority transaction in relation to the Elim Church had been investigated following correspondence from a member of the public. The External Auditor advised the Committee that following this work, they were satisfied that the Local Authority approach was reasonable for that transaction.

In response to member questions, the External Auditor advised that the new shorter timescale had been introduced by government and that his understanding was that approximately 10% of Local Authorities may miss the 31 July deadline, with those who did named in a report in the Autumn.

Members discussed the Audit Progress report in depth further and sought assurance from officers and external audit that lessons would be learnt going forward. External Audit and Officers responded that lessons had been and would continue to be learnt.

External Audit responded to a further member question in regards to the additional audit fee that this would be dependant on the extent of the work required and this would be known at the end of August and therefore included in the report at the September meeting.