URL: https://democracy.runnymede.gov.uk/ieDecisionDetails.aspx?ID=879

Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Purpose:

Content: The Committee was appraised of the current position with completion of the external audit of the Council’s Statement of Accounts for 2019/20 through to 2022/23.   Regrettably, BDO were not able to sign off the 2019/20 audit owing to two factors. The first was that work was incomplete with regard to employee costs.  Insufficient testing had been undertaken and the backstop date meant no further testing could be done to satisfy BDO.  Therefore, BDO intended to issue an ‘except for’ qualified audit opinion.    The second issue was in respect of the ‘value for money’ arrangements in 2019/20, owing to one particular acquisition of property outside the borough which had taken place in 2019/20.  BDO had questioned the legality of borrowing from the Public Works Loan Board for the purposes of acquiring commercial property for the generation of income or capital appreciation.  BDO were awaiting an external legal opinion.    Some Members referred to the ‘general power of competence’ given to local authorities under the Localism Act 2011, and questioned why, when that was in place prior to 2019/20, when similar acquisitions had been made, the landscape had changed the following year.  BDO clarified that they had sought external legal advice on this point, as subsequently there were different legal opinions on how those powers could be applied.   BDO stated that a significant amount of work had been undertaken.  However, owing to the issues described above they were unable to complete and would also be issuing a ‘disclaimer of opinion’ for the years 2020/21 to 2022/23.   The Committee expressed unanimous displeasure with the continued delay and in particular the reputational damage for the Council, which was legally obliged to issue a notice, advising of its failure to have signed off the Statement of Accounts, nor meet the statutory backstop date of 13 December 2024.  Members stressed that the circumstances were beyond the Council’s control, and that responsibility rested with BDO.   Officers were asked to seek advice on the possibility of seeking recompense for the delays in completion of the 2019/20 audit and subsequent external audits, although Officers cautioned that there were no financial penalties imposed on either party for non-completion.    It was also acknowledged, with reference to the ‘Local Audit Backlog Rebuilding Assurance’, published by the Financial Reporting Council, that it would take a significant amount of time for local authorities and audit companies to move to the recovery period once the reset measures were taken, as set out by the Government’s written ministerial statement.   The Committee did not rule out issuing a vote of no confidence in BDO.  However, before re-consideration of this, Officers from BDO were asked to present an update to the Committee in January 2025.   Resolved that –   i)          the Standards and Audit Committee expresses dissatisfaction in BDO for failing to submit the 2019/20 ISA260 and Value for Money reports ahead of the revised backstop date that was set by the Minister of State for Local Government;   ii)         the Assistant Chief Executive (S151 Officer), in consultation with the Chair of the Committee be authorised to write a letter to the Public Sector Audit Appointments (PSAA) setting out the committee’s concern with BDO’s performance. This letter will be published on the Council website; and   iii)        the Assistant Chief Executive (S151 Officer), in consultation with the Chair of the Committee be authorised to submit a formal complaint to BDO

Date of Decision: November 28, 2024