Agenda item

G Sutton introduced a report to provide Members with an update on the 2020/21 Annual Accounts for the MCA Group, including the final version of the Annual Governance Statement for the Committee to consider and review the draft External Audit Results. 

Members were informed that the External Auditor (EY) had now conducted its review of the Authority’s accounts and undertaken detailed testing of balance sheet figures and items of income and expenditure.  In the process of doing so, Finance officers had agreed with the External Auditor to make several adjustments to the accounts.  Further detail on the adjustments were explained in the report. 

Members were informed that the External Auditor was currently awaiting a final piece of assurance work associated with the South Yorkshire Pension Fund.  It was not expected that this work would affect the Accounts as presented. 

If any changes were required to the Accounts following receipt of the final pensions assurance work, the Committee agreed that delegated authority be sought from the Chair and Vice-Chair of the Committee to endorse the Accounts on the Committee’s behalf.

The audit had identified two misstatements relating to the single entity accounts, neither of which had been adjusted for on the grounds that they were either insignificant in value or were only presentational in nature. 

Two adjustments had been made to SYPTE’s accounts which had the consequential effect of giving rise to adjustments in the MCA’s Group accounts.  Further details were presented at paragraph 2.4 of the report and noted by Members. 

It was anticipated that the External Auditor’s findings would lead to an unqualified opinion being issued, with no matters to report on the Value for Money Statement. 

Members noted that the statutory deadline for publishing the audited accounts was 30^th September.  The final Statement of Accounts would be presented to the MCA Board for formal adoption on 20^th September.

G Sutton and M Thomas thanked the MCA and PTE’s Finance Teams for all their efforts to produce the Accounts under challenging and testing circumstances. 

The revised Annual Governance Statement was presented in Appendix A to the report and noted by Members. 

H Rohimun provided Members with an overview of the External Audit Results report for the year ending 31^st March 2021. 

The External Auditor confirmed that EY had substantially completed its audit of the Authority’s financial statements for the year ended 31^st March 2021.

Subject to concluding the outstanding matters listed in the report, EY expected to issue an unqualified audit opinion on the Authority’s financial statements by the statutory deadline of 30^th September 2021.  It was confirmed that EY had no matters to report on the Authority’s arrangements to secure economy, efficiency and effectiveness in the use of resources. 

Members were informed that the audit had identified an uncorrected misstatements decrease on deficit of provision of service by £0.75m which related to current-year differences. 

EY had agreed with management a disclosure adjustment of £10.79m reduction in note 38 'Revenue grant receipt’ in advance as three transactions were included in this note which were part of grant revenue already recognised.  The disclosure adjustment did affect the outturn income and expenditure position.

It was confirmed that EY’s review of whether the information presented in the Annual Governance Statement was consistent with its knowledge of the MCA had yet to be concluded. 

Members’ attention was drawn to the key ‘Areas of Audit Focus’ section of the report which detailed External Audit’s observations and the current status in relation to those areas.  There were no matters, other than those reported by management or disclosed in the report, which the External Auditor believed should be brought to the attention of the Committee or Management.

During the audit, EY had identified no significant deficiencies in internal control, but had identified two control improvement opportunities as set out in Section 7 of the report. 

Members noted the External Auditor’s note on Independence and Audit Fees as detailed in Section 9 of the report. 

In response to a question from Councillor Curran, H Rohimun confirmed that the Authority had provided information to EY when it had been requested. 

In response to a query from A Marshall, M Thomas confirmed that work going concern in relation to cash flow forecasting was currently being finalised. 

A Marshall noted that significant testing had been undertaken by EY on items of expenditure. 

M Thomas added that the Authority had provided EY with approximately 90% of sample testing on items of expenditure, which, in his view was excessive. 

H Rohimun agreed to pick up this issue at the audit de-brief session. 

In response to a query from A Marshall, M Thomas reported that the Authority was still awaiting a response from PSAA in relation to the 2019/20 additional audit fees. 

RESOLVED – That the Audit, Standards and Risks Committee reviewed the Annual Accounts and Annual Governance Statement for 2020/21 in conjunction with the external auditor’s report, and endorsed the accounts for approval by the MCA Board on 20 September 2021.