Agenda item

The report of the Chief Finance Officer presents Grant Thornton’s Interim Audit Findings Report for their audit of the Council’s 2021/22 statement of accounts. The report outlines Grant Thornton’s findings to date, and the areas which remain to be covered when their audit work resumes.

The report of the Chief Finance Officer presented Grant Thornton’s Interim Audit Findings Report for their audit of the Council’s 2021/22 statement of accounts. The report was sent to Members as a supplementary document. The report outlined Grant Thornton’s findings to date, and the areas which remain to be covered when their audit work resumes.

The Committee were informed of the following:

·  The work had commenced in March 2023 and is ongoing with approximately 70% completed and a revised version of the submitted report would be brought to the Committee in September. It was noted that to date the auditors had not identified any audit adjustments impacting on the Council’s outturn position and useable reserves.

·  A summary of the findings was set out in Section 2 of the submitted report.

·  Two audit recommendations had been raised for management in the Action Plan set out at Appendix A.

·  A follow up on recommendations from the previous year were detailed at Appendix B.

·  To date a number of identified disclosure and presentational audit adjustments had been identified and were set out at Appendix C.

·  There were elements still outstanding, and these were listed on page 5 of the submitted report.

·  It was recognised that under ISA(UK)260 there is a non-rebuttable presumed risk that the risk of management over-ride of controls is present in all entities. It was noted that no risks had been identified so far.

·  Grant Thornton highlighted the valuation of land and building estimated at £5bn and their suggestion in the previous year to value the land and buildings on 31st March rather than on 1st January. It was noted that management had consulted on this with the Council’s valuers as agreed. However, the 2021-22 valuation date remains the same and a change in valuation date has been recommended again.

·  Members noted that the year-end MRP charge has increased to 2.5%.

·  Workshops for finance officers had been undertaken and it was the view that these workshops would improve the content and quality of working papers going forward.

Questions from Members provided the following response:

·  There were practical issues to consider in relation to changing the valuation date of assets to 31st March. It takes a significant time for the valuations to be undertaken and moving to the 31^st March would not leave enough time to complete the draft accounts if valuations were to be based on data for conditions at 31st March. Members queried what approach is taken by comparable authorities with a similar portfolio to Leeds. It was noted that Grant Thornton act as auditors for other core cities and they offered to take this question away and report back.

·  Officers were of the view that it would not be permissible under the Code to split the valuation date for half the properties to be valued at 1st January and half valued at 31^st March, as it was thought that one valuation date had to be specified. This information was to be checked and reported back.

·  Information on how the property assets of a council were audited was provided to the Committee.

RESOLVED – To note the content of the report and the recommendations made by Grant Thornton.