Agenda item

To set out the Work Programme of the Governance and Audit Committee (report of the Democratic Services Manager enclosed).

Consideration was given to the report of the Democratic Services Manager which set out the Work Programme of the Governance and Audit Committee.

The Democratic Services Officer introduced the report and updated the Committee on the following points:

• In respect of Appendix A, a number of items which had been due to come forward at the current meeting had been postponed and these were noted on ‘Pending Items’ at page 202 of the agenda pack. On confirmation of the schedule of meetings for 2024/2025, pending items would be rescheduled in liaison with PSPS Finance colleagues; and
• The Training record at Appendix B would be updated when further training had been identified and arranged/completed. A further pension training session would be arranged in due course to include counterpart committee members from across the partnership.

In respect of the postponed reports:

• The Chief Finance Officer (PSPS) responded that:
  • The Financial Statements had been drafted for 2022/2023 which were currently undergoing the due diligence process with the intention that they would be published by the end of March 2024.

Members considered the update and made the following comments:

• Members requested that they be invited to attend any training sessions that were to be arranged following appointment of the Independent Member(s).

• The Chairman referred to a separate update he had received from the External Audit Director (KPMG) and asked for a further explanation regarding the delay of the external audit report.
  • The External Audit Director (KPMG), who was in attendance virtually, responded that:
    • The initial timeline of 31 March 2024 for the external audit plan and risk assessment work was revised due to competing pressures and priorities at PSPS which had included matters relating to historic audits, preparation of Financial Statements for 2022/2023, the annual budget setting processes and internal audit requests; 
    • The deadline for the plan had been rescheduled to the end of April 2024 and progress had been made regarding the plan and risk assessment regarding the Financial Statements;
    • The risk assessment relating to the ‘value for money’ aspect of KPMG’s engagement remained the main outstanding piece of work. In this respect, KPMG awaited the return of the ‘Value For Money Self Assessment’ which the S151 Officer had given assurance would be prioritised;
    • Assuming that the plan and risk assessment could be finalised by the end of April 2024, the full plan, including value for money risk assessment, could come forward to the next scheduled Governance and Audit Committee meeting; and
    • Weekly engagement meetings with PSPS were taking place to keep the situation on track.

• Members asked for clarification of the situation regarding the 2022/2023 Financial Accounts which needed to signed off by the previous auditors, Ernst Young (EY)
  • External Audit Director (KPMG) responded that:
    • New legislation was currently proceeding through Parliament in respect of a local government audit reset to implement a backstop date for historic incomplete external audits – the date of which was likely to be 30 September 2024. This would enable a disclaimer opinion to be signed by the outgoing external auditors stating that work had not been finalised. Under this scenario, the understanding was that the predecessor auditors would not carry out an external audit on the 2022/2023 Financial Statements; and
    • The expected publishing of the 2022/2023 accounts at the end of March 2024 was therefore welcomed, as this enabled the external audit opinion to be published and the progression of KPGM’s work for 2023/2024 thereafter.

• Members noted that whilst SHDC had one year of accounts outstanding, some councils had more than one year outstanding. Nonetheless, the Committee required a level of assurance that the opening balances for 2023/2024 were valid.
  • The External Audit Director (KPMG) responded that, in respect of the new legislation, guidance regarding opening balances was awaited, especially where Financial Statements were unaudited. Disclaimers were likely to be included in future reports which highlighted the risk in relation to opening balances where these had not been verified;
  • The reset of the deadline for accounts would ensure that work could remain on schedule in future years. The deadline for completion of Financial Statements 2023/2024 was May 2025 with shorter deadlines being in place until 2027/2028 when it would revert to October; and
  • KPMG planned to have the accounts on track by the end of 2024, and for completion as early as possible after this time. The importance of the submission of information within requested timeframes was necessary to achieve this outcome.

AGREED:

That the Work Programme of the Governance and Audit Committee be noted.