The report of the Engagement Lead is to follow.

Contact: Avtar S Sohal (0121) 232 6420

The Committee received the report of the Engagement Lead which set out the Audit Findings for Shropshire Council for the year ended 31 March 2024.

The Engagement Lead informed the Committee that there was still work to do before the audit could be drawn to a conclusion.  He referred to page 8 of the report which set out the outstanding items with the key area being Property, Plant and Equipment for which assurances were awaited before the opinion could be signed off in case it led to a material misstatement. He confirmed that the financial statements audit was approximately 90% complete and he thanked the finance officers for their support in driving the audit to near completion.

He then handed over to the Senior Manager who went through more of the detail of the report and provided a high-level update on the outstanding areas.  She explained that some of the outstanding information did impact on the significant risk areas of the Council set out on pages 11 to 15 of the report.  Work in those areas had progressed, but they were unable to complete three of those significant risk areas (presumed risk affording revenue recognition, the risk regarding expenditure, and the valuation of land and buildings and investment property).

The Senior Manager drew attention to their work around Going Concern (detailed on page 25 of the report) and Value for Money (detailed on page 27 of the report).  She then referred to the audit adjustments that had been identified (set out on page 42 of the report) including two monetary adjustments and some disclosure adjustments (referred to on pages 43 and 44 of the report).  Finally, she touched on an unadjusted misstatement related to a pensions estimation which was consistent with previous reporting and as it was an estimation, they would not expect it to be adjusted however assurances on that were required, specifically for the letter of representation.

She confirmed that any follow up work on their recommendations would be undertaken as part of their planning for 2024/25 and progress would be reported against those recommendations set out in Appendix A and Appendix B of the report as part of their audit plan and audit findings for 2024/25.

In response to a query, the Engagement Lead provided an update in relation to the outstanding audit objection and how it would likely be concluded.  He also drew Members’ attention to a further objection that had been raised on a number of Authorities’ and Pension Fund accounts for which a national approach was being worked upon.

A query was raised about the minimum revenue position and the fact that the way in which this was handled by the Council in 2023/24 would not have complied with the regulations which come into force in April 2025 and the impact, if any, on the accounts or how the Council operated.  It was confirmed that the Council had applied that policy in that way for a number of years as it was felt to be the correct way to do so and although not currently in line with regulations, the regulations were changing in line with the Council’s policy.  Therefore, rather than changing it for a year, the decision was made to maintain it as this was how it was going to be reflected in future years.  She was not aware that a calculation had been done to see what the impact would be if they were to change it.

The Chairman informed the Committee of a future consultation by the Audit Commission on proposals for changing the way in which local authority accounts were audited following concern that there were authorities who were eight and nine years behind with the submission of their accounts.

Members expressed congratulations and thanks to both Grant Thornton and the Council’s Finance team for ensuring that the Council’s accounts were up to date and had caught up from previous slippages.

RESOLVED:

To accept the contents of the report.