This report provides an update on progress to complete the audit of the Council’s Final Accounts for 2019/20 and the preparation for the 2020/21 and 2021/22 accounts.

Mark Sanders, Chief Accountant, submitted a report on progress towards the completion of the audit of the Council’s Final Accounts for 2019/20 and the preparation for the 2020/21 and 2021/22 accounts.

In relation to the 2019/20 accounts, there were two areas of work in progress which had now been completed, as follows: Cash Income Suspense – verifying that income collected should be set against debtors; and Inter Company Accounts – Verifying offsetting Debtor / Creditor Balances between Reading Borough Council and its wholly owned subsidiary Brighter Futures for Children, which would enable the external auditors, EY, to consider their view on the accounts.  The final sign off would need to take account of the outcome of a technical CIPFA consultation on temporary changes to accounting for Infrastructure Assets.  This consultation was affecting nearly all local authorities which may delay the receipt of formal audit opinions whilst the matters were being considered at a national level.  Although it was not clear when the relevant Accounting Codes of Practice would be updated following the results of the consultation, it was anticipated that further information would be available in August 2022.

The report also highlighted the latest national data on the completion of audit opinions, which demonstrated that the sector was facing significant challenges in completing external audits.  Up until 31 May 2022, a total of 51 local authorities had not had Audit Opinions issued for 2019/20, with a further 19 opinions delayed from earlier years.  There were clearly several issues still being addressed at other authorities, and these issues presented a significant challenge for the sector to overcome and impact on external audit resource planning. 

The Council’s External Auditors, EY, had confirmed they would allocate their resources to begin the 2020/21 audit process at the beginning of August 2022 with the aim these accounts would be signed off by December 2022.  This should, subject to any remaining audit matters arising, enable the draft 2020/21 accounts to be published for public inspection during August 2022.  In relation to the 2021/22 accounts, the first stage in the production had been completed.  Although focus would shortly turn to the 2020/21 process, many of the working papers for both years could be prepared and reviewed concurrently.  The intention would be for the 2021/22 Statement of Accounts to be made available for public inspection in January 2023 to coincide with the external audit work commencing, subject to agreement with EY.

Resolved:

(1)      That progress made on the audit of the accounts for 2019/20, and the preparation for following years’ 2020/21 and 2021/22 accounts, be noted;

(2)      That the Director of Finance, in consultation with the Chair of Audit & Governance Committee, be authorised to sign off the Statement of Accounts for 2019/20 on behalf of the Council.