Agenda item

Report to follow.

Allister Bannin, Director of Finance introduced the reports to the Committee and advised the final updated 2019/20 Statement of Accounts and External Audit Findings Reports were expected at the February 2024 Committee meeting.

Sarah Ironmonger, Grant Thornton provided an overview of Appendix 1 – The Interim Audit Findings Report for London Borough of Croydon 2019-20 available within the agenda report pack. The Committee was advised that the report remained interim due to subsequent events which required inclusion before finalisation.

Jane West, Section 151 Officer thanked Grant Thornton and noted the scale of work undertaken and the agreement now achieved on the Council’s position at the end of 2019/20 which provided a firm basis to progress the remaining outstanding accounts.

Councillor Cummings noted the wider discussion on the backlog of financial accounts in the Local Government sector. The Committee heard that as a council with intervention, it was not Croydon’s intention to partake in any expedited process. The decision to complete all accounts in full had been taken to ensure clarity and understanding and the council intended to complete audited accounts for all outstanding years.

The Committee commented on the number of accounting irregularities which had been uncovered and the subsequent negative impact these had. In response to questions from the Committee, the external auditor advised the Opening the Books exercise undertaken by management had supported the progression of modelling to move issues forward. Officers noted the Opening the Books exercise had also provided a basis for discussions with DLUHC regarding the capitalisation direction, and had proved accurate now that subsequent work had been completed.

Sarah Ironmonger, Grant Thornton introduced Appendix 2 – Value for Money Findings Report 2019-20 to the Committee available within the agenda report pack and noted its adverse conclusion. The Committee noted significant reporting on the issues within the report had been received previously. Officers highlighted the importance of the adverse conclusion and advised whilst the Committee was aware of the issues which had led to this outcome in 2019-20, if the council were to receive this conclusion in a future year it would be of significant concern.

Matt Dean, Grant Thornton introduced Appendix 3 – The Audit Findings Report for The London Borough of Croydon Pension Fund 2019-20 to the Committee and noted the positive outcome of the audit.

The Committee queried the progress on the remaining outstanding accounts and the working relationship between officers and the external auditors. Grant Thornton advised the approach was a collaborative one, with willingness from officers to resolve any issues found. Value for money (VFM) audit work was underway for 2020/21 and 2021/22, but the completion process was not expected to be quick due to the complexity of issues.

Cllr Cummings advised the Committee that whilst Croydon was balancing its budget with capitalisation direction, it was not meeting VFM and would not be able to do so until further arrangements were agreed with central government.

In response to questions from the Committee, Grant Thornton advised the report was a summary of findings in 2019-20, following change in the code of practice in 2021 future years would provide a commentary on arrangements.

The Committee RESOLVED to;

1.     Note “The Interim Audit Findings Report for London Borough of Croydon” from Grant Thornton UK LLP (Appendix 1) and the management responses to the action plan which are set out within the action plan from page 42 of the report onwards.

2.     Note the estimated external audit fees relating to 2019-20 as detailed in the Interim Audit Findings Report and that the final fees will be agreed with the S151 Officer and approved by Public Sector Audit Appointments (PSAA) before payment of the final fees outstanding.

3.     Note the “Value for Money Findings Report for 2019/20 (Appendix 2).

4.     Note “The Audit Findings Report for London Borough of Croydon Pension Fund” (Appendix 3).