To receive a report from the external auditors summarising their audit conclusion in relation to the audit of Reading Borough Council and Group for 2018/19.

Maria Grindley and Adrian Balmer, EY, reported on their draft audit results, which summarised the external auditor’s audit conclusion in relation to the audit of Reading Borough Council and Group for 2018/19.  The previous audit year, 2017/18, had been challenging for the Council, and EY’s audit opinion had been qualified in four areas, Debtors, Creditors, I&E and Pensions, the value for money conclusion had an adverse report.  There had been a number of changes implemented to address EY’s recommendations in relation to processes, documentation and controls and there had also been a number of new appointments during 2018/19 and to date. Due to the fact that the 2018/19 year was well underway whilst these changes were being implemented, the issues arising had not been fully addressed by the 2018/19 year end. Therefore, the report also highlighted a number of matters where improvements had not yet been embedded as at 31 March 2019. The external auditors expected to see these improvements reflected in the 2019/20 financial statements.

The certification of the 2018/19 accounts had been significantly delayed due to delays in certifying the 2017/18 accounts, which were signed off in October 2020 and had therefore missed the deadline of 30 September 2018.  Since then there had been a positive improvement in timescales and the 2018/19 audit had taken 10 months to complete which was an improvement on prior years. In addition, discussions and planning for the 2019/20 statements had already started with work anticipated to start in the summer. EY expected to complete the work on 2019/20 to a shorter timescale, which would assist the Council get back on track in relation to the timing of the audit cycle.

EY reported they had substantially completed the audit of Reading Borough Council for the year ended 31 March 2019 and expected to issue a qualified audit opinion on the financial statements in the form that appears at Section 3 of the report.  The report also highlighted matters concerning the Council’s arrangements to secure economy, efficiency and effectiveness in the use of resources.  However, it should be noted that despite the accounts still likely to be qualified the number of specific qualifications had been greatly reduced and areas of concern in respect of the Value for Money judgement had also been lifted.

Resolved:     That the position be noted.