Agenda item
Future Training Requirements
To note proposals for Member development in relation to the role and responsibilities of Audit Committee Members.
Minutes:
Martin Dyson, Head of Accountancy outlined proposals for Member development in relation to the role and responsibilities of Audit Committee members.
It was acknowledged that for 2022/23 the Committee included several Members who had not served on this body before. Therefore, it would be useful for training to be provided on roles and responsibilities and the processes undertaken or overseen by the Committee. It would be useful for the Committee to participate in an evaluation of its own effectiveness. This could be achieved by undertaking a self-assessment. A self-assessment had not taken place in Hyndburn for a number of years.
Members were asked to consider whether they wanted refresher style training, or training on the basics, which could be delivered in house by officers. It was suggested that the Chair should undertake additional training. The self-assessment should be timed to take place before the Review of Internal Audit.
Mr Beard highlighted the Chartered Institute of Public Finance and Accountancy (CIPFA) document Audit Committees: Practical Guidance for Local Authorities and Police (2018 Edition), which could be used for learning and development and contained a self-assessment tool at Appendix D. Mr Beard undertook to circulate the document after the meeting. It was suggested that a phased approach to the self-assessment be carried out as follows:
- STAGE 1 – each councillor to read the guidance document.
- STAGE 2 – each councillor to complete the self-assessment questionnaire to be achieved in time for the November 2022 Audit Committee meeting (further guidance would be provided on this process).
- STAGE 3 – Mr Beard to collate the self-assessment questionnaires and produce a report to the November Audit Committee. This would highlight any knowledge / skills gaps too.
Mr Dyson also reported that an additional meeting of the committee would be required before November to provide the updated position on the Annual Statement of Accounts 2020/21. The signing off process had been delayed by approximately 1 year. The authority was working closely with the new auditors, Mazars, to finalise the accounts. Mazars representatives had been unable to attend the Committee today due to other commitments and sickness.
Councillor Noordad Aziz enquired bout he reason for the change of external auditors from Grant Thornton, as he believed that all Lancashire authorities were part of the same cohort audited by this company. Mr Beard indicated that the change had been undertaken by agreement with Public Sector Audit Appointments (PSAA) and Grant Thornton to enable the auditors to better manage capacity and client relationships. Councillor Aziz asked if any other Lancashire authorities used Mazars, as it would be useful to share experience. Mr Beard confirmed that Rossendale Borough Council had engaged Mazars. Councillor Aziz commented that the disestablishment of the Audit Commission in 2015 had not worked well, given that the change had been intended to drive forward efficiencies.
Mr Dyson indicated that delays to the completion of the Annual Statement of Accounts for 2020/21 were largely outside of the authority’s control. The external audit process was likely to be completed over a three week period commencing on 1st August 2022. It should be possible to bring the final accounts to the Audit Committee before 30th September 2022. The 2021/22 Statement of Account should then follow at the November 2022 meeting.
Councillor Aziz asked if there had been any breach of statutory duty regarding the deadlines for approving the accounts, or if COVID Regulations had relaxed the timetable. Mr Dyson responded that there had been an extension to the relevant deadlines, but external auditors had struggled to meet those deadlines. A high proportion of local authorities had been unable to comply with the Regulations, and the practical deadlines for completion had therefore shifted. However, the 2021/22 accounts should be on time. Councillor Aziz enquired if the Mazars were starting from scratch on the accounts. Mr Dyson indicated that most of the preparatory work had been carried out by Grant Thronton, so Mazars should be in a position to finish of this work in August. The Accountancy Service recognised the risks around completion of the accounts and were focused on getting up to date. Much of the current situation was due to circumstances beyond its control. A number of Lancashire authorities had accounts from earlier years that remained outstanding, so this was not specifically a Hyndburn issue. Mr Dyson undertook, in consultation with the Deputy Chief Executive, to provide the Members of the Committee with written update of the position on the outstanding Statements of Accounts.
Councillor Aziz proposed a cross party motion to the Government to indicate that the external audit situation was not acceptable. He expressed concern that if something had been awry, the Council and public would not have been made aware of this in a timely manner. Councillor Haythornthwaite considered that the current difficulties might be due to other factors, rather than the demise of the Audit Commission. Mr Dyson responded that the exact reasons were unclear and the situation had generated a lot of debate nationally. Hyndburn, was currently working well with Mazars and building a good relationship, as evidenced by the current year’s accounts, which were on target. This was important, as the deadline for the 2022/23 accounts would revert to the normal pre-COVID timetable with the Statement of Accounts published in May 2023 and signed off by September 2023 following external audit. Councillor Aziz acknowledged that there was a shortage of auditors within the profession and that firms might prefer to miss a deadline, rather than to publish incorrect findings.
The Chair advised Members to contact Mr Dyson or Mr Beard if they wished to discuss any specific training and development needs.
Resolved - That the Committee:
(1) notes the proposed arrangements for training and development outlined above, including the self-assessment process; and
(2) notes that an additional meeting may be required in September 2022 to consider the final (audited) Statement of Accounts 2020/21.