Agenda item

Officers introduced the external audit item, noting that Members were asked to approve the 2022/23 Statement of Accounts, the Audit Completion Report, and the Hillingdon Pension Fund Final Audit Results for 2022/23.

EY had provided an Audit Completion report in respect of the 2022/23 accounts and explained that the 2022/23 financial statements consisted of the Council and Pension Fund accounts. The intention was to issue a disclaimer of opinion on these financial statements. Importantly, following approval of the financial statements by the Committee for 2022/23, EY would move to issue the opinion, likely to be next week. EY were waiting on the National Audit Office to conclude the whole government accounts, which was understood to happen this Friday. The Ministry of Housing, Communities and Local Government had announced that the statutory backstop date for publishing the 2022/23 Statement of Accounts was 13 December 2024. There were two amendments to the form of opinion, one was in relation to the new Code of Audit Practise that was recently issued by the National Audit Office, and the other amendment referenced a misstatement in relation to the disposal of schools. There were two schools which had been converted into academies in 2021/22 and should have been derecognised at that point. They were not and so they were incorrectly contained within the 2022/23 financial statements. Management would adjust them as part of the 2023/24 financial statements.

There was a backstop date for the 2023/24 accounts of 28 February 2025. The 2023/24 Statement of Accounts was published towards the end of June and the audit was ongoing and expected to be completed by the backstop date. The intention was to bring an audit results report to the next Committee meeting in February 2025. This would allow Members to consider the 2023/24 accounts and approve those financial statements in advance of the backstop date. Following approval of those accounts, EY would issue their opinion which would again be a disclaimed opinion because the opening balances would be disclaimed. To provide assurance over the closing balances within the 2023/24 financial statements, EY noted that they planned to bring an audit plan for 2024/25 to a subsequent Committee meeting. This would also contain details for the schedule for building back assurance over the next few years to build towards a clean audit opinion. Members asked if there were any particular areas of disagreement between the Council and EY, and EY noted that there were no disagreements that they needed to bring to the Committee’s attention. It was noted that the authority had experienced some challenges with changes in key officers.

Members asked about any consequences of receiving a disclaimer of opinion. EY noted that there would be approximately 450 disclaimers across local government as part of the reset process. Hillingdon would not be alone in this. The Ministry of Housing, Communities and Local Government, the Financial Reporting Council and the National Audit Office had worked together on this process. EY reiterated that where an authority was subject to a disclaimer as part of the reset, it was not anticipated to reflect badly on the authority.

Members asked what the PWLB was. Officers advised that this was the Public Works Loans Board. This was where the Council obtained most of its borrowing to fund the capital programme.

Members asked about the decarbonisation scheme grant amount received. Officers confirmed this was £13.75 million.

Members inquired about the school expansion programme and officers noted that this related to projects to increase SEND places.

Members asked about how the increase in value of property, plant and equipment was arrived at. Officers noted that the figures were largely driven by valuations. EY clarified this may be a question around different financial years. For the 2022/23 financial statements, audit work on valuations had not taken place so there was no audit query on the valuations at the date presented in the financial statements. Members clarified that their question concerned the increase in value. Officers suggested that they could provide additional information on this to show where the increase had come from if required. A lot of technical work went into valuations and it was not an exact science.

Members noted that a process had been followed, and that although ideally the Council would not be in this position, Members were minded to approve the accounts.

The Committee approved the 2022/23 Statement of Accounts. The next meeting would focus on the 2023/24 audit results.

Members inquired about the relationship between the audit process and the new government department overseeing local government performance. EY explained that the performance division was somewhat separate but may use audit results for risk assessment purposes.

RESOLVED: That the Audit Committee:

1. Agreed the 2022/23 Statement of Accounts and Audit Completion Report, and the Hillingdon Pension Fund Final Audit Results Report 2022/23; and

2. Noted progress with the external audit of the 2023/24 Statement of Accounts