The Audit, Standards and Statutory Accounts Committee met to discuss the final accounts for the 2021-22 financial year and the external audit results report. The committee granted delegated authority to the Chair to sign the accounts and the Letter of Representation once the audit is completed, provided no further material issues arise.

Final Accounts and External Audit Results Report for 2021-22

The committee considered the external auditor's report on the council's draft accounts for the 2021-22 financial year. EY, the external auditor, explained that the completion of their report had been delayed nationally due to issues with the valuation of local authority infrastructure assets, as well as other areas of their review. Guidance on the treatment of these assets has since been received, and the council's financial accounts are being amended accordingly.

EY's report indicated that outstanding work included resolving queries regarding the valuation of property, plant, and equipment, including investment property, and finalising work on debtors, creditors, and payroll information. The valuation of infrastructure assets remains an ongoing challenge, with discussions within the industry about the necessity of extensive valuations for assets primarily used for service delivery rather than sale.

Despite these outstanding items, EY confirmed they were expecting to issue an unqualified opinion, meaning no material errors were found, and reported no exceptions regarding arrangements for value for money.

A written question was submitted by Mr Gary Evans, who asked what material issues the committee considered would prevent the Chair from signing the accounts, given that key audit areas involving significant sums remained to be finalised. In response, Councillor Andrée Frieze, Chair of the Audit, Standards and Statutory Accounts Committee, explained that the delays were largely due to national issues affecting local authority audits, including the valuation of land and buildings and the treatment of infrastructure assets. Councillor Frieze noted that a solution for infrastructure asset valuation was only prescribed in January 2023, and all local authorities were in a similar position. She stated that the council's external auditors were expected to finalise their work in March 2023 and that an unqualified opinion was anticipated.

During the discussion, it was noted that EY had identified five out of six assets within the valuation of land and buildings that appeared outside their specialist valuers' expected range. EY explained that valuation is a matter of judgement and methodology, and differences are expected. They also highlighted that they deliberately chose more challenging assets to value, such as the unique Orleans House property, making reconciliation more complex than for more standard assets like schools.

The committee also discussed a query from a member of the public regarding the ringfencing of income derived from planning services. EY confirmed they were satisfied that the council was operating correctly in this regard. Differences identified in the audit of the council's pension fund were attributed to differing valuation dates of assets, which were not material but exceeded EY's reporting threshold.

EY indicated that their audit completion was likely in March 2023. They plan to improve engagement with the authority for next year's audit by enhancing the request and receipt of information and improving communication with wider finance teams and other service areas. The authority's Head of Accountancy confirmed that preparatory work for the 2022/23 external audit had already begun.

The Chair requested a future report detailing how audit completion delays could be addressed and a plan for delivering audits to meet defined deadlines.

The committee resolved to consider the Audit Results Reports and the Statement of Accounts for 2021/22. They granted delegated authority to the Chair to sign the accounts and the Letter of Representation upon completion of the audit, unless any further audit work revealed material issues.