The Audit and Standards Committee of Brent Council was scheduled to discuss the progress in finalising the Council's and Pension Fund's Statement of Accounts for the 2025-26 financial year. The meeting's agenda also included the approval of minutes from the previous meeting and any deputations received.

Audit Findings Report for the Council and Pension Fund Statement of Accounts 2025-26

The primary item scheduled for discussion was an update on the progress of finalising the Council's and Pension Fund's Statement of Accounts for the 2025-26 financial year. This update was to be provided following consideration of the item at the preceding Audit & Standards Advisory Committee and in advance of the final Statement of Accounts being approved.

The report pack detailed that the Council published its draft Statement of Accounts and Annual Governance Statement (AGS) for 2025-26 by the statutory deadline of 30 June 2026. These documents were made available for public inspection and subsequently submitted to the Council's external auditors, Grant Thornton, to commence the audit.

The report highlighted that Grant Thornton was in the process of finalising the audit of the 2025-26 accounts and their ISA260 (Audit Findings Report). Key areas of focus during the audit included Property, Plant & Equipment (PPE), Financial Instruments, and Group Accounts. The report noted that changes to the Code requiring the Council to adopt indexation had made PPE an area of extensive audit focus. The financial instruments notes were prepared using a new process, which had taken longer to audit.

The Council had been implementing an improvement plan to address shortcomings in its asset records since the audit of the 2024-25 Statement of Accounts. This plan had delivered substantial progress, particularly in improving records, processes, and controls for Property, Plant and Equipment.

A post-balance sheet event was identified relating to a proposed commercial agreement expected to change the value of certain Plant, Property and Equipment assets. While the agreement was not formally executed by the accounts' authorisation date, sufficient information was available to indicate the revised value was likely to be recognised. This change was considered material but did not impact the Council's overall financial position, financial sustainability, or usable reserves.

The report also mentioned the government's introduction of 'backstop' dates in 2024 to address local authority audit backlogs. The Council was on track to publish its accounts by the end of September 2026, ahead of the 31 January 2027 backstop date.

The report included draft letters of representation for the Council and Pension Fund, and draft audit opinions for both. Details of audit fees were also provided, noting proposed fees of £560,500, with an additional £20,000 incurred due to extra audit work related to property valuation indexation, financial instruments, debtors and creditors, cash reconciliations, and a prior period adjustment.

The Auditor's Annual Report, attached as an appendix, was described as broadly positive regarding the Council's arrangements for securing value for money. Grant Thornton found that governance arrangements remained strong, and significant progress had been made in stabilising the Council's financial position and improving financial reporting. However, two key recommendations were retained relating to the delivery of savings for medium-term financial sustainability and the continued improvement of housing compliance following a Regulator of Social Housing judgement. The auditor anticipated issuing an unmodified opinion on the 2025-26 Statement of Accounts.

The report also detailed audit adjustments, including misclassification and disclosure changes, and noted that the audit of the Pension Fund's financial statements was substantially complete, pending receipt of an IAS 19 assurance letter from the pension fund auditor.

The committee was asked to delegate approval of the draft letters of representation, authorise the chair to sign the final statement of accounts, and agree the audit fees for 2025-26.