Agenda item

The Councils External Auditors presented their Audit Completion Report for the year ended 31 March 2024 to the Audit and Governance Committee for consideration. The purpose of the document was to summarise their audit conclusions. The scope of the Councils External Auditors work, included identifying significant audit risks,

and other key judgement areas, which was outlined in the Audit Strategy Memorandum, which was presented to the Councils Audit and Governance Committee on 30 October 2024.

The Councils External Auditors had reviewed their Audit Strategy Memorandum and concluded that the significant audit risks and other key judgement areas set out in that report remained appropriate.

The main topics discussed were as follows:

- Financial pressures being faced in children’s services and future plans the Council were looking at to alleviate those pressures.

- There were no significant weaknesses to report, however it had been acknowledged that continued use of reserves to maintain the Councils financial position could not be maintained.

- The Council needed to continue to deliver the ‘Powering Our Future’ initiative to deliver future savings.

- Brief discussion was had around Teesside Pension Fund and that the Teesside Pension Fund Auditor intended to issue a disclaimed audit opinion on the Teesside Pension Fund for the year ended 31 March 2024. Forvis Mazars audit approach included consideration of work undertaken on the Pension Fund.

Consequently, there would be an impact on Forvis Mazars audit opinion for Stockton-on-Tees Borough Council, details of which were contained within the main report.

- It was highlighted that Forvis Mazars work was substantially complete and there were currently no other matters, except for pensions, of which they were aware would require modification of their audit opinion, subject to the satisfactory resolution of the outstanding matters set out below.

Pensions

Financial Statements

Group Accounts

Audit Quality Procedures and Closure

Events after the reporting period

Whole Government accounts

- Brief discussion was had around materiality which at the planning stage was set at 11.345m for the Group and 11.292m for the Council using a benchmark of 2% gross expenditure at the surplus deficit level.

- In terms of significant risks there were no material issues or risks in terms of management override of controls.

- Forvis Mazars highlighted their ‘significant findings’ full details which were contained within their report. Forvis Mazars concluded that during the course of the audit they did not encounter any significant difficulties, and they had the full cooperation

of the Councils management throughout, however they had experienced some delays in completing their work on the Council’s PPE balance. It was therefore important that Forvis Mazars continued to work with management to ensure the audit process was completed in a timely and efficient manner.

- Forvis Mazars also highlighted a 2nd observation relating to the fixed asset register.

- The Committee were informed that it was identified during Forvis Mazars testing of grant income that the Council no longer maintained remittance advices for two sample items (£2.009m) relating to the business rates relief grant. This was because of the Council’s policy to delete emails after 6 months. Forvis Mazars journals testing encountered a similar issue where the Council was unable to provide the original journal authorisation for one sample item. Management was able to provide retrospective approval for the journal posted and other evidence to support the testing. Overall, Forvis Mazars were able to obtain sufficient assurance from all other evidence provided by the Council to conclude on the testing.

- Brief discussion was had around the ‘ summary of misstatements’ which included unadjusted misstatements and adjusted misstatement.

- Members attention was drawn to the Value for Money (VFM) section.

RESOLVED that the report be noted.