To present for consideration the External Auditor’s Interim Annual Report for the year ended 31 March 2025.

Members heard that, during the year, a number of reports had been issued by the Council’s External Auditor as part of their work associated with the Statement of Accounts and review of the Council’s arrangements to secure value for money.

The first such report had been their Audit Plan and Strategy that had been presented to the Audit Committee in March 2025. That report had set out the various elements of the work that the External Auditor had planned on undertaking in respect of the year ending 31 March 2025 and had included their value for money risk assessment / approach that was set against the following three key elements:

1.    Financial Sustainability;

2.    Governance; and

3.    Improving economy, efficiency and effectiveness.

The External Auditors had now broadly completed their work associated with their value for money review.

The Committee was reminded that, ordinarily, this would be presented alongside the outcome of their work on the Council’s Statement of Accounts within their final annual report for the year, but due to the back stop date arrangements introduced by the Government in response to the national recovery from the previous years’ audit delays, they had been required to publish their value for money commentary for 2024/25 by 30 November 2025. 

The External Auditor would continue their work associated with the wider Statement of Accounts review, with the aim of reporting their findings within a final annual report for the year by the back stop date for the publication of the audited accounts, which for 2024/25 would be 27 February 2026.

It was reported that, to meet the 30 November 2025 deadline associated with reporting value for the money issues highlighted, the External Auditors had helpfully issued an interim Annual Report, which had been attached to the main agenda report (Appendix A) and had set out the outcome of their work to date.

The outcome had been welcomed with no significant risks associated with the Council’s value for money arrangements across the aforementioned 3 key areas.

The External Auditor had revisited the recommendations they had made last year within the attached interim report. The Council’s planned responses had now either been put in place or had remained on-going, which had been reported separately to the Audit Committee as part of providing the necessary assurances.

The Committee was informed that the External Auditors had made a recommendation within their report (page 15 of Appendix A), which had also included a management response. In respect of the proposed management response set out, it had been worth emphasising that there would be a number of practical opportunities over the next couple of years to address the point raised as part of the planning and implementation phases associated with Local Government Reorganisation, which would include activities such as contracts, procurement and performance.

In addition to the above, and having followed the Government’s closure of OFLOG and sought alternative ways to support improvement, the Government had recently announced the introduction of a Local Government Outcomes Framework, which had provided a more focused approach, which in itself presented an alternative / complementary opportunity to respond to the recommendation made by the External Auditor.

Members were reminded that the External Auditor was still undertaking the necessary activities associated with the Council’s Statement of Accounts for 2024/25, with the outcomes planned to be presented to the Audit Committee in February 2026. Their on-going work might identify issues that impacted on their current value for money commentary and if that proved to be the case then an update would be reported within the External Auditor’s final report for the year if necessary.

It was reported that the External Auditor had also taken the timely opportunity to provide an update on providing assurance relating to the recovery from the national external audit backlog. The External Auditor’s associated report had been attached (as Appendix B), which broadly had reflected information previously presented to the Audit Committee, with the Council having continued to be committed to supporting the process as necessary.

Delivering Priorities

Careful planning to ensure financial stability underpinned the Council’s capacity and ability to deliver against its objectives and priorities. The outturn position and associated Statement of Accounts that had been prepared each year reflected this broad aim and had supported the successful financial planning process which had included communicating and consulting with relevant stakeholders.

Legal Requirements (including legislations & constitutional powers)

The Committee heard that the Government had put arrangements in place to clear the backlog of outstanding historical audit opinions. Those arrangements had been referenced within the attached External Auditor’s Reports which had broadly reflected the detailed information previously presented to the Audit Committee.

The attached Interim Report had reflected the requirements of the Government’s associated interventions and those set out within Accounts and Audit Regulations, which had included the requirement to publish value for money commentary for the year ended 31 March 2025 by 30 November 2025.

The Audited Statement of Accounts for 2024/25 would need to have been published by the backstop date of 27 February 2026.

Finance and other resource implications

There had been no direct financial implications - the External Auditor’s proposed fees had been supported by additional Government funding and would be kept under review as part of their on-going work and associated costs.

It was moved by Councillor Steady, seconded by Councillor Fairly and RESOLVED that in respect of the 2024/25 Statement of Accounts process, the Audit Committee:

(a)   notes the External Auditor’s Interim Annual Report for the year ended 31 March 2025, and agrees  the Management Response to their recommendation as set out on page 15 of the Attachment 1, along with the publication of the report as necessary; and

(b)  notes the External Auditor’s update attached concerning the rebuilding back of assurance associated with the Government’s interventions in response to the national audit backlog