Agenda item

(To receive a report from Mazars, External Auditors, which updates the Committee on the progress they have made on both the Lincolnshire County Council and Pension Fund audits)

Consideration was given to a report presented by Mazars, External Auditors, which updated the Committee on the progress they had made on both the Lincolnshire County Council and Pension Fund audits. Mr Mark Surridge and Mr John Pressley, External Auditors, Mazars, delivered the updates for the Lincolnshire County Council and Lincolnshire Pension Fund audits respectively.

Observing that at the 14 June 2021 meeting of the Audit Committee assurance was given that no delay in the external audit for the 2020/21 accounts was expected, Members asked why they were now advised that the completion of the audits would be delayed until November 2021. The Committee was advised that there was a slight delay in receiving the financial statements for the Council and Pension Fund statements, exacerbated then, by a compound of Covid-19 implications and staffing disruption. A number of counties had only received notification of changes to pension fund accounts at the end of September as a result of recently introduced technical requirements.

In response to Mazars' explanation, Members asked if they could still be confident in future deadlines promised by the external auditors. In addition, they registered their surprise that a large firm, such as Mazars, didn't have the capacity cover staffing shortages. The external auditors noted that all timelines suffered from an inherent risk of unpredictability; however, support had been sought from Council officers to create a deliverable timeline which the external auditors could be confident with.

Noting the comment from Mazars that they'd received the financial statements late, Members sought further information from officers to detail the cause of the delay. The Committee were advised that the accounts had been provided to Mazars one week late, citing a significant loss of staff and experience from the team. In addition, extra external valuations had been requested which wouldn't have been prior to Covid-19. Property valuations were subject to the availability of external property analysts. Additional estimate examination was also required by Government.

Observing that the audit date had already changed due to Covid-19, Members sought clarity if the audit date reverted back to the original date. It was advised that this financial year would differ as the external auditors would have to produce an annual audit report in addition to a value for money conclusion as part of new code changes. For both, this and the next, financial year, the deadline had been set to September. In response, Members stressed their concern that the restricted deadline wouldn't allow sufficient time for planning and preparation.

Referencing the report's suggestion that there were audit risks that were discussed with managers but didn't need to be brought to the attention of members, the Committee asked who made that decision and what criteria was used to determine it. It was explained that the decision was made by Mr Mark Surridge and determined based on qualitative and quantitative factors such as final confirmations of payments. Any items that exceeded the trivial threshold, as set out in Mazars' audit plan, would be brought to the attention of the Audit Committee.

While appreciating the difficulties presented with succession planning, Members stressed their disappointment in the delay, particularly noting that the Council was able to backfill retirements and larger organisations should be able to attract skilled personally easier.

RESOLVED

That the comments of the Committee be noted.