Delay to external audit 2021-22

OPEN

DECISION

ITEM 5

1) Purpose of Report

1.1 To inform members of the delay to the audit of the financial statements for 2021/22.

2) Recommendations

2.1 That Members note the letter received from the external auditors (Ernst and Young LLP, EY) and the passing of the statutory deadline for publishing audited financial statements. 

3) Information and Analysis

Background

3.1 The Authority published the draft statement of accounts for 2021/22 by the deadline of 31 July 2022. For the 2021/22 financial year the statutory deadline for publishing the final audited accounts is 30th September 2022.

3.2 On the 30th September the service received notification from EY that they will not meet this deadline (appendix 1).  Although this letter constitutes the official notification required  to be communicated to the service by statute, the delay to the audited was already clear.  At the date of writing, neither the requirements for planning the audit nor dates to commence the work had been communicated to the service.  Although in the final stages of completion the 2020/21 audit remains outstanding and needs to be finalised before 2021/22 can begin.

3.3 The delays experienced do not relate to any issues identified within the service’s financial statements. This letter further highlights the resourcing issues being experienced by EY and the wider public sector audit industry.

4) Legal Considerations

4.1 The Accounts and Audit (Amendment) Regulations 2022 require that the Authority approves the formal Statement of Accounts prior to publication on 30th September 2022.

5) Other Considerations

5.1 The normal timetable allows for the bulk of audit work to be completed during the summer months.  This allows the audit to be concluded in time for budget preparation work and latter closedown preparation to begin through the period of October to March.

5.2 The 2020/21 audit commenced in January 2022, conflicting with the end of the budget setting process and closedown preparation.  The extended period of the audit and the changed timetable for 2021/22 will now cause ongoing conflict with other priorities with the accountancy team.

This report has been consulted upon and approved by the following officers:

Strategic Leadership Team 

Contact Officer:    Simon Allsop    Contact No:    01773 305410