Supplementary Agenda Document Pack - Moray Council - 22/10/2024
Moray Council · 22 October 2024
Back to Moray Council — 22 October 2024 and its agenda
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Moray Council Tuesday, 22 October 2024 SUPPLEMENTARY AGENDA The undernoted reports have been added to the Agenda for the meeting of the Moray Council to be held at Council Chambers, Council Office, High Street, Elgin, IV30 1BX on Tuesday, 22 October 2024 at 14:00. BUSINESS 5a. External Audit - Annual Report to Members on 2023-24 Audit Report by Depute Chief Executive (Economy, Environment and Finance) 3 - 114 Page 1
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REPORT TO: SPECIAL MORAY COUNCIL ON 22 OCTOBER 2024 SUBJECT: EXTERNAL AUDIT – ANNUAL REPORT TO MEMBERS ON 2023/24 AUDIT BY: DEPUTE CHIEF EXECUTIVE (ECONOMY, ENVIRONMENT AND FINANCE) 1. REASON FOR REPORT 1.1 To provide Council with a copy of the External Auditor’s Annual Audit Report to Council on the 2023/24 accounts. 1.2 This report is submitted to the Council for consideration as part of a suite of reports on the Annual Audit and Accounts for 2023/24. 2. RECOMMENDATION 2.1 It is recommended that the Council consider and note the contents of the Annual Audit Report 2023/24. 3. BACKGROUND 3.1 The Council’s External Auditor, Grant Thornton, provides an Annual Report to those in charge of governance who are the Council and the Controller of Audit. This report is a significant document and covers: The audit of the 2023/24 annual accounts Wider Scope and Best Value Action Plan recommendations from the External Auditor and management’s response 3.2 A copy of the External Auditor’s Annual Audit is attached as APPENDIX 1. A representative of the Council’s External Auditor will present the report at the meeting. 3.3 The report coincides with the completion of the Annual Audit of the Council’s Annual Accounts, item 6 on the agenda. The Council has received an unqualified Audit Opinion for 2023/24 on the council’s annual accounts. Item 5a. Page 3
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4. ANNUAL AUDIT REPORT Audit of the Accounts 4.1 The main amendments to the final accounts from the draft accounts are explained in the covering report to the audited Annual Accounts, which is another item on the agenda for this meeting. 4.2 Audit planning identified three key risks: management over-ride of controls (a presumed risk in all audits), valuation of land and buildings and defined benefit pension scheme valuation. The auditor’s assessment of key judgements and estimates used in preparing the accounts was appropriate and balanced on three of the four areas considered and appropriate and cautious on the fourth. Other areas of audit focus arise from audit compliance requirements or from areas of complexity or importance to the users of the accounts. 4.3 Wider Scope Audit work included consideration of financial sustainability; financial management; vision, leadership and governance, and use of resources to improve outcomes. 4.4 The report concludes that significant challenges face the Council in achieving financial sustainability and makes recommendations for improvement for this and for financial management regarding reporting. The report notes improvement in governance and that further work is being monitored through the Best Value Action Plan. Best Value 4.5 Best Value is reported in the Thematic Review and the Best Value Thematic report is the subject of another report to this meeting of Council. In addition to this the Annual Audit Report includes consideration of the following Best Value considerations: service performance improvement and performance reporting. The report concludes that the Council has an appropriate performance management framework and makes recommendations regarding the Annual Performance Report. Audit recommendations 4.6 Nine recommendations relating to the Council’s accounts preparation and financial controls are made in the Action Plan. These relate to improvement to working papers, including trial balance and revaluation reserve; finance team capacity; client response time; presentation of the management commentary; preparation for IFRS 16 (relating to accounting for leases); and infrastructure assets accounting records. 4.7 Four recommendations relate to Wider Scope work: financial monitoring reports; use of reserves to balance the budget; internal audit capacity; content of the Annual Performance Report. 4.8 Six recommendations are made regarding Best Value covering: linkage of key policies impacting on workforce planning; reporting of workforce data; Page 4
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improved performance reporting; property asset management; and staff survey. 4.9 Progress against prior recommendations is also reported on with most actions currently still on-going. 5. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) This is referred to in Appendix 1 to the report. (b) Policy and Legal The audit is conducted in terms of statutory powers afforded to Grant Thornton, the appointed External Auditor for the Council. (c) Financial Implications There are no issues arising directly from this report. The report notes that the current level of service provision is not financially sustainable. (d) Risk Implications The work undertaken by External Audit provides assurance to Members on the Council’s performance management, financial statements and the actions taken by the Council to address significant matters arising out of the audit process. (e) Staffing Implications Preparation of the Council’s annual financial statements requires significant resource input as part of the scheduled work of the accountancy team within Financial Services and from other services across the Council. (f) Property There are no property issues arising directly from this report. (g) Equalities/Socio Economic Impact There are no equalities issues arising directly from this report. (h) Climate Change and Biodiversity Impacts There are no climate change and biodiversity issues arising directly from this report. (i) Consultations The content of the APPENDIX 1 to this report has been discussed with CMT and relevant officers of the Council. 6. CONCLUSION 6.1 The annual audit by External Audit gives members assurance that the Council’s Financial Statements give a true and fair view of its financial position at 31 March 2024 and that appropriate internal control systems are in place. The Report to those in charge of governance details the Page 5
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External Auditor’s findings and conclusions arising from the audit and the planned management actions to address matters which have been highlighted. Author of Report: Lorraine Paisey, Chief Financial Officer – Ext 3213 Background Papers: Attached Ref: LP/LJC/SPMAN-1293228629-1160 Page 6
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Grant Thornton Annual Audit Report for Moray Council Financial tJear ended 31 March 2024 Pre pa red for those Charged with Govern a nee and the Controller of Audit 16 October 2024 - Final APPENDIX 1 Item 5a. Page 7
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Commercial in confidence 16 ✓ ✓ ✓ Not considered likely to result in material adjustment or change to disclosures within the financial statements Potential to result in material adjustment or significant change to disclosures within the financial statements Likely to result in material adjustment or significant change to disclosures within the financial statements Assessed risk consistent with Audit Plan Assessed risk decrease since Audit Plan Assessed risk increase since Audit Plan Page 22
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© 2024 Grant Thornton UK LLP Commercial in confidence 25 • • • • • • • • Page 31
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© 2024 Grant Thornton UK LLP Commercial in confidence 38 Assessment Significant deficiencies identified in IT controls relevant to the audit of financial statements Non-significant deficiencies identified in IT controls relevant to the audit of financial statements/significant deficiencies identified but with sufficient mitigation of relevant risk IT controls relevant to the audit of financial statements judged to be effective at the level of testing in scope Not in scope for testing Page 44
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Commercial in confidence 0 10 20 30 40 50 60 Q1 Budget Q2 Budget Q3 Budget Q4 Budget Actual Spend £m Capital Plan 2023-24 Budget Movement Land and buildings Infrastructure Vehicles, Plant and Equipment Moray Growth Deal Page 54
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Commercial in confidence 107 International Standard on Auditing ISA (UK) 260, as well as other ISAs, prescribe matters which we are required to communicate with those charged with governance. These are set out in the table below. Our communication plan Audit Plan Annual Report (our ISA 260 Report) Page 113
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