Issue - meetings

External Audit Progress report and Unaudited Statement of Accounts 2018/19

Meeting: 25/07/2019 - Governance and Audit Committee (Item 13)

13 External Audit Progress report and Unaudited Statement of Accounts 2018/19 pdf icon PDF 60 KB

To update the Governance and Audit Committee of events since the unaudited Financial Statements were presented (report of the Executive Director Commercialisation (S151) enclosed.

Additional documents:


Consideration was given to the report of the Executive Director Commercialisation (S151 Officer) which updated the Committee of events since the unaudited Financial Statements were presented.  The following information was noted:


·         The external auditor, Ernst Young had confirmed that their audit would not be  completed by 31 July 2019, due to serious resourcing issues.  Their timetable was now to start SHDC’s audit on 23 September 2019, and complete on 18 October 2019.  This delay would necessitate the delay of the planned Governance and Audit Committee meeting on 24 October 2019 – the meeting would now take place on 14 November 2019, and Ernst Young would present their audit findings to this meeting.

·         Members and officers felt that the delay was not acceptable, and the Authority had made strong representations to Ernst Young however, there was nothing that could be done as they did not have the resources to complete the audit.  The contract with Ernst Young was a national contract and SHDC was not the only Authority experiencing delays.  The national contract had been awarded in 2018.  Ernst Young had had a significant increase in work, as a result of contracts awarded.  Other contractors were also having similar problems.  There was no consequence arising from the audit not being completed on time however, SHDC had presented its required information, and Ernst Young now needed to resource and complete its work.

·         With regard to the accounts and audit regulations, consideration was currently being given to changes by the government.  Officers expected that the timeline may be reviewed.

·         Members asked whether there would be a similar risk, going into next year.  Officers responded that they would be raising the issue with PSAA, who organised the contract, to ascertain what they intended to do.  However, it was likely that the same problem could arise next year.

·         Members were advised that the accounts presented within the report had not changed since they were considered at the last meeting of the Committee.  They were however advised of an issue relating to pensions, which was as a result of a recent Supreme Court judgement.  This had ruled that the 2015 changes to public sector pensions had discriminated against younger employees.  The ruling meant that it was likely that the Council pension funds would have to compensate and account for payments to ensure that no employee was left out of pocket.  The Council’s actuary had advised that there was an estimated £212,000 impact on the pension liabilities figures in the accounts, although no impact to the Council’s general fund.  It had been decided that, due to materiality levels, no adjustment be made to the 2018/19 accounts and the Council had decided to treat this as a contingent liability.




a)    That the update on the Financial Statements 2018/19 be noted;


b)    That the Annual Governance Statement 2018/19 be approved; and


c)    That the Governance and Audit Committee meeting, due to be held  on 24 October 2019 be moved to 14 November 2019.