The report and appendices are attached.
Grant Patterson (Grant Thornton) introduced the report, stating that audits had been undertaken remotely since July 2020. He advised that work had been substantially completed and, to date, no issues had been identified which would require a modification of audit opinion. Work was ongoing to examine the Council’s accounts in respect of property, plant and equipment; this was not anticipated to significantly alter overall findings.
Grant Patterson stated that COVID-19 had resulted in significant disruption to property markets, prompting the Royal Institution of Chartered Surveyors to issue guidance to its members that disclosure of material uncertainty was likely to be required. This signified that less certainty had been expressed by valuers, but he stressed that it would not invalidate any existing valuations. He stated that Grant Thornton’s report for both the Council and Pension Fund would be unqualified, however, it was proposed to include ‘an emphasis of matter’ to highlight the material uncertainty disclosures observed as a result of the pandemic; this would not require a modification or qualification of the audit opinion.
Grant Patterson drew attention to page 10 of the Draft Audit Findings Report which summarised the Dedicated Schools Grant, proposed McCloud remedy, and the Goodwin judgement. He stated that these were not material matters and no adjustment to the accounts was proposed. This was reflected in the draft Letter of Representation; the Committee’s approval was being sought in respect of the Authority’s judgement to qualify these findings as not material.
Grant Patterson stated that an unqualified opinion of the Financial Statement was proposed by the external auditor, alongside an unqualified value for money conclusion. Examination of the Medium Term Financial Strategy (MTFS) demonstrated that the Authority’s arrangements were appropriate; he advised that WCC had achieved around 85% of the savings required over the period of the last organisational plan. This compared favourably to other local authorities. He highlighted the challenges ahead, including the proposed increased use of reserves and the difficult choices the organisation faced to meet its updated savings targets.
Grant Patterson stated that the financial strategy adopted by the Authority placed it in a sound position; it remained a going concern.
The members of the Committee praised the quality of the report. Councillor Gifford stated that, given the circumstances, the outlook was promising. Councillor Singh Birdi commented that prudent spending had facilitated a good outcome for the organisation; he advocated caution given the uncertainties ahead.
In response to the Chair, the members of the Committee indicated that they were satisfied that the Letter of Representation be signed on behalf of the Council.
That the Committee:
1. Endorses the Audit Findings Report of the External Auditors for Warwickshire County Council;
2. Approves, subject to any changes which may be necessary to the final draft, the wording of the Letter of Representation.