Agenda item

Report of Deloitte

Considered –

The updated report of Deloitte concerning the progress of the 2020/21 external audit of North Yorkshire County Council.

Nicola Wright (Audit Partner, Deloitte) introduced the report and highlighted that Deloitte had, similar to the audit of the North Yorkshire Pension Fund, carried on with completing the work on the 2020/21 external audit of North Yorkshire County Council.  Page 33 of the supplement agenda papers for today’s meeting outlined progress to date and showed some of the items, shown as outstanding at the last committee meeting, and now updated and shown as completed, together with the two significant risks in the report.  Nicola Wright highlighted the main changes compared to the previous version of the report, which were:-

·         Deloitte had now concluded their work on both the significant risk of the completeness of expenditure and around journals.  Subsequently, references to each, within the detail of the report, had been updated.

·         Deloitte had included, in the updated report, the management responses received from the Council team concerning some of the recommendations.

·         Now included in the appendix was an unadjusted misstatement item which was effectively a classification between cash and debtors.

Members discussed the progress of the external audits with Nicola Wright and the following comments were made:-

·         Members commented that they were disappointed at not being able to discuss the final SOFA at today’s meeting. 

·         Members acknowledged that they could understand that no one could predict illness and they wished the Deloitte staff a speedy road to recovery. 

·         In response to questions, Nicola Wright confirmed that there were no large outstanding areas for testing by Deloitte.

·         Nicola Wright explained that the delay with the audits had arisen largely because the County Council, as a large council, had additional quality processes in place around engagement quality partner reviews and it was in those areas where Deloitte had struggled due to staff sickness.  Interim arrangements had been put in place to get the reports out and review but unfortunately those interim arrangements had tested positive for COVID within a few days and therefore it had been a really challenging time around capacity for Deloitte.

·         Nicola Wright highlighted that Deloitte and the County Council were not alone in facing the challenges of public audit at present.  She explained that there were a range of issues affecting the situation, for example:- ill health; access to the right skills in the market; the challenges around quality; and raising the bar and making sure that work was done to that highest possible standard.  Members highlighted that the County Council was possibly unique in that it was facing the challenge of local government reorganisation and consequently, the sooner that County Council staff could put the audit of the 2020/21 accounts behind them, the sooner they could focus on work relating to local government review.  Nicola Wright advised that Deloitte were aware of that and therefore were aiming to complete the audit of the County Council first.

·         Nicola Wright reported that Deloitte was not far away now from being ready to sign off the County Council’s accounts.  Only some review processes remained to be completed.  However, they had to be completed before Deloitte could issue an opinion regarding the accounts.

·         In response to questions, Nicola Wright advised that she hoped that Deloitte would be finished the audits in the following two to three weeks, subject to the return to work on 1 November of a member of her staff who had had COVID.  However, if there were any delays, Deloitte would inform Gary Fielding, County Councillor Cliff Lunn and Mr David Portlock outside the committee cycle.  Nicola Wright confirmed that “two to three weeks” was realistic, subject to any further sickness absence.

Resolved –

That Deloitte’s update reports about the 2020/21 audits of the North Yorkshire Pension Fund and North Yorkshire County Council be noted.