Agenda item

To receive the Wokingham Borough Council Audit Committee Progress Report.

The Committee received an update on the 2020-21 statement of accounts.

During the discussion of this item, the following points were made:

·       Helen Thompson advised that the report had been co-authored with Council officers.

·       The audit was well progressed.  However, both the Council and EY teams had had to balance priorities and sickness.  In addition, the delayed start to the audit had had an impact on progress.

·       At the end of December there had still been 60% of local audits in progress and this number was gradually reducing.

·       Helen Thompson went on to highlight how progress was assessed.

·       It was noted that even had all the work within the Council’s and EY’s control been completed it would not have been possible to sign the Financial Statements following the Committee meeting as the letter received from the Pension Fund auditor had stated that work was ongoing and that there could still be issues arising.  They were expected to report in early March, allowing the accounts to be presented at the Committee’s extraordinary meeting at the end of March.

·       With regards to Housing Benefits, the report had stated that the deadline was the 31 January.  This had since been extended by the Department of Work and Pensions, to 28 February.  Procedures were in place to monitor the Housing Benefits audit.

·       The Interim Assistant Director Finance emphasised that his previous local authority had been in a similar position and faced similar challenges.  He felt that the Council and EY teams had a positive relationship and way of working. He was confident that the March deadline would be met. 

·       Councillor Sargeant commented that the report stated that it was not possible to access the detailed models of the actuaries and that EY were producing their own estimates.  He questioned whether these estimates were being used by other auditors of Berkshire authorities, and what would be the outcome should there be a material difference between EY’s estimates and those of the actuaries.  Helen Thompson explained that the 2021 audits had been impacted by the revised auditing standards ISA on estimates, which had brought in more rigorous requirements in terms of looking at models.  A range rather than a precise materiality level was being worked to, so that if when the liability was recalculated using the same information as the actuaries, the figure arrived at was within 2% (plus or minus) of the total liability.  Helen Thompson indicated that of the audits that she had been involved in, they had all come within range apart from one, and this had been as a result of an error by the actuaries, which had then been corrected.  The report was expected imminently, and it was anticipated that there would be any issues.

·       Councillor Shepherd-DuBey referred to the valuation of land, building property, plant and equipment, and investment properties.  She questioned whether there were any material differences in the valuation of properties that remained unresolved, and if so, how much they amounted to, and the differences that would result in properties being recorded at a lower or higher value than proposed by Officers.  Helen Thompson indicated that work was still ongoing, so it was not currently possible to answer this question.  She explained the valuations process.

·       With regards to going concern, Councillor Shepherd-DuBey asked whether EY had any concerns in this area, particularly in light of the forthcoming Adult Social Care Bill.  Helen Thompson indicated that the focus was on the disclosures made by management regarding the Council’s financial position, which linked to the Medium-Term Financial Plan.  EY were mindful of the pressures that the Adult Social Care Bill would create.  The Deputy Chief Executive emphasised that the Council was facing unprecedented times in terms of unknowns and how big these could potentially be.  The Council would do all that it could to ensure that a Section 114 declaration was not required.  He was confident that it would not.

RESOLVED:  That the update on the 2020-21 Statement of accounts be noted.