To receive a report from the External Audit Manager, Mazars.

Mark Surridge was in attendance on behalf of Mazars LLP, External Auditors, to present the External Audit Progress Report November 2023, pages 101 to 122 of the Agenda refer. The report provided the Audit and Governance Committee with an update on progress made by Mazars LLP in delivering its responsibilities as East Lindsey District Council’s external auditors.

The representative of Mazars LLP advised the committee that the report covered three financial years audits and any other significant matters to date. The 2020/21 audit was concluded over the summer after receiving instructions from the National Audit Office, the 2021/22 audit was now very close to completion as the final set of group accounts was awaited before being able to proceed with 2022/23.

Members were invited to put their comments and questions forward.

• A Member queried whether it was normal for local authorities to be a couple of years behind in completing audits and whether this would change. In response, the External Auditor advised that defining normal was difficult and that whilst the 21/22 Accounts were technically complete, many local authorities were in a similar position especially after the effects of the pandemic. In 2022, there were issues around accounting for infrastructure assets and pension accounting which was not resolved until July. These issues were not unique, and a backlog was created for a vast number of local authorities across the country. The proposal was to work with a new external auditor for 23/24 with the aim to bring everything back on track for September 2024.

The Section 151 Officer alternatively advised that the situation was not normal and usually audits were signed off in a timely manner. However, the pandemic, changes to pensions accounting, asset valuation and infrastructure accounting has meant that authorities accounts have needed to stay open longer and restating them has caused more delay. Clarification on the catch-up process was also needed from the Financial Reporting Council who were currently examining the issues with government.

• A Member expressed dissatisfaction that the group accounts for Invest East Lindsey had not yet been provided, page 105 of the Agenda refers. In response, the External Auditor explained the challenges for the partnership and that it was not a simple process especially taking into consideration the challenges to find good accountants with the right competencies.

• A Member raised concern over how Invest East Lindsey affected overall opinion and requested an update on the Council’s going concern assessment. In response, the Section 151 Office reassured there were no concerns for the going concern assessment for ELDC, but it was acknowledged that the company must carry out its own assessment to satisfy Company Act requirements, this was also reiterated and supported by the representative from Mazars LLP.

• Referring to Section 3 of the report, a Member queried if there was anything the Council should take note of going forward, pages 113 to 120 of the Agenda refer. In response, the External Auditor suggested background reading on Number 8. Croydon Council Public Interest Report - February 2023 as a thematically strong piece to examine.

No further questions or comments were received.

Following which it was,

RESOLVED:

That the External Audit Progress Report November 2023 be noted.