Agenda item

Natalia Govourkhina, Head of Corporate Finance, and Michael Green, on behalf of Grant Thornton, presented the Audited Final Statement of Accounts and the ISA 260 report.

The Committee noted that under the Accounts and Audit (amendment) Regulations 2022, local authorities were required to publish their unaudited accounts no later than 30^th June, 2025, for the financial year 2024/25, accompanied by a Narrative Report and draft Annual Governance Statement.  The deadline for the publication of final audited accounts was 27^th February, 2026.

The draft unaudited accounts had been presented to the Audit Committee on 17^th June 2025 (Minute No. 6 refers) and published before the 30^th June 2025 deadline.

Michael Green, External Auditor (Grant Thornton), acknowledged the early publication of the draft unaudited accounts ahead of the deadline which was earlier than the majority of their other clients and reflective of the excellent performance of the Finance Team particularly given the introduction of IFRS16 which was challenging across the sector.

The audit was substantially complete and Grant Thornton were expected to issue an unqualified opinion on the statements by 5^th December, 2025.  Some adjustments had been identified, largely of a technical and classification nature.  The audit had also identified some unadjusted misstatements which were again very technical in nature around IFRS16, however, management had decided not to adjust.

The ISA260 set out Grant Thornton’s overall conclusions from the 2024/25 audit in relation to their statutory objectives to give an opinion on the Council’s financial statements.  A number of changes had been recommended by Grant Thornton and accepted by the Council with adjustments made to the Council’s accounts.  The key points were set out in detail as part of Appendix 4 with attention drawn to the following:-

-        Impairment of newly purchased Council dwellings down to their existing use value – social house, the valuation methodology as prescribed by the CIPFA Code

-        Understatement of fees and charges income

-        Accounting for re-valuation losses identified on subsequent recognition of IFRS16 leases accounting standard (new standard implemented in 2023-24)

There were 2 recommendations both of which were “green” i.e. low priority:-

-        Presentation of short-term debtors in the notes to the accounts

Management response – the Council will update the presentation of the short-term debtors note in 2025-26 financial statements to ensure the note is disaggregated and presented on the nature of the short-term debtors

-        Calculation of accumulate absences accrual

Management response – the Council will consider options on how to better demonstrate the basis for the accumulated absences accrual in the financial statements in 2025-26

The Value for Money work had also been concluded; findings and recommendations were contained within the Auditor’s Annual Report (Minute No. 51 refers). 

Discussion ensued with the following issues raised/clarified:-

·        Valuation of new social housing – the adjustment did not reflect any change in what the dwellings could sell for on the open market but reflected the impact of adopting the Code-prescribed valuation methodology for Council dwellings

·        The Local Government Financial Settlement for 2025/26 was only a one year allocation making it challenging to plan longer term.  In terms of the Fair Funding Review 2.0 for 2026/27 the current assumption was a projected £20M increase over 3 years

Resolved:-  That, having taken due regard of the external audit findings detailed within the ISA 260 report, the 2024/25 Statement of Accounts, attached as Appendix 1, be approved for publication as final together with the 2024/25 Narrative Report attached as Appendix 2.