Minutes:
It was moved by Councillor Robin Perry and seconded by Councillor Edward Hawkins that
“this Council
(i) notes that
(a) HMG awarded a new contract to audit local authority annual accounts to BDO, through Public Sector Audits Appointments (PSAA) in 2020;
(b) with the much publicised pressures across the whole Local Government Audit system that are the result of staffing and capacity issues within those audit firms, many Councils like Surrey Heath are experiencing significant delays in the completion of the audits on their accounts;
(c) having outstanding unaudited accounts, falsely and unnecessarily undermines confidence in the finances of all those Councils, including Surrey Heath;
(d) recognising that staff turnover issues in the finance team contributed in part to the initial delays in the process, despite subsequently expending many hours working with the Auditors, actively supporting them and responding to their queries as part of the standard audit process and receiving multiple re-start dates, disappointingly the 2019/20 audit has still not been completed by the current external auditor;
(e) despite having been prepared diligently and in a timely manner, the external auditor has yet to start work on the audit of accounts for 2020/21. This delay has also impacted the preparation of the 2021/22 accounts;
(f) it has already incurred significant expenditure retaining temporary staff with the historic knowledge and experience required to respond to queries relevant to the outstanding annual accounts; and
(ii) asks the Leader of the Council to write formally to the Secretary of State for Levelling-up Housing and Communities to seek his assistance in:
(a) enabling the PSAA to offer the Council the appointment of an alternative audit company that has the necessary capacity to complete the above audits, or
(b) releasing the Council from the requirement to use the currently appointed auditors (BDO) under the existing national Public Sector Audits Appointments (PSAA) arrangement for the audit of its annual statement of accounts for financial years 2019/20, 2020/21, 2021/22 and 2022/23 until the new PSAA arrangement commences from 1 April 2023, to allow the Council the option of securing new external auditors from PSAA or otherwise, that have the capacity and capability to complete the outstanding audit of accounts.”
The Council debated the motion and referenced the myriad of reasons that had impacted the audit of the 2019/20 accounts. Concerns were raised about the potential implications associated with changing auditors, in particular in relation to the additional costs that could be incurred. However, it was also suggested that, at this stage, the only decision sought, and consequently the only cost to the Council, was the letter to the Secretary of State.
RESOLVED that this Council
(i) notes that
(a) HMG awarded a new contract to audit local authority annual accounts to BDO, through Public Sector Audits Appointments (PSAA) in 2020;
(b) with the much publicised pressures across the whole Local Government Audit system that are the result of staffing and capacity issues within those audit firms, many Councils like Surrey Heath are experiencing significant delays in the completion of the audits on their accounts;
(c) having outstanding unaudited accounts, falsely and unnecessarily undermines confidence in the finances of all those Councils, including Surrey Heath;
(d) recognising that staff turnover issues in the finance team contributed in part to the initial delays in the process, despite subsequently expending many hours working with the Auditors, actively supporting them and responding to their queries as part of the standard audit process and receiving multiple re-start dates, disappointingly the 2019/20 audit has still not been completed by the current external auditor;
(e) despite having been prepared diligently and in a timely manner, the external auditor has yet to start work on the audit of accounts for 2020/21. This delay has also impacted the preparation of the 2021/22 accounts;
(f) it has already incurred significant expenditure retaining temporary staff with the historic knowledge and experience required to respond to queries relevant to the outstanding annual accounts; and
(ii) asks the Leader of the Council to write formally to the Secretary of State for Levelling-up Housing and Communities to seek his assistance in:
(a) enabling the PSAA to offer the Council the appointment of an alternative audit company that has the necessary capacity to complete the above audits, or
(b) releasing the Council from the requirement to use the currently appointed auditors (BDO) under the existing national Public Sector Audits Appointments (PSAA) arrangement for the audit of its annual statement of accounts for financial years 2019/20, 2020/21, 2021/22 and 2022/23 until the new PSAA arrangement commences from 1 April 2023, to allow the Council the option of securing new external auditors from PSAA or otherwise, that have the capacity and capability to complete the outstanding audit of accounts.
Note: in accordance with Council Procedure Rule 16.4, a recorded vote on the motion was taken.
The following Members voted in favour of the motion:
Councillors Dan Adams, Graham Alleway, Stuart Black, Richard Brooks, Sarah Jane Croke, Vivienne Chapman, Paul Deach, Colin Dougan, Shaun Garrett, Mark Gordon, Edward Hawkins, Josephine Hawkins, David Lewis, Alan McClafferty, Charlotte Morley, Adrian Page, Robin Perry, Darryl Ratiram, Valerie White.
The following Members voted against the motion:
Councillors Rodney Bates, Cliff Betton, Sharon Galliford, Emma-Jane McGrath, Sashi Mylvaganam, Liz Noble, Morgan Rise, Graham Tapper, Pat Tedder, Victoria Wheeler, Helen Whitcroft.