The Director of Finance, Resources and Business Improvement introduced the report setting out the External Auditor’s Annual Report for 2021/22 and 2022/23.  It was noted that alongside the audit of the financial statements, Grant Thornton, the External Auditor, was required to report on the Council’s arrangements to secure economy, efficiency, and effectiveness in its use of resources.  Grant Thornton’s work on the 2021/22 audit was delayed, so the opportunity had been taken, in accordance with NAO guidance, to combine reports for 2021/22 and 2022/23.  The report had identified no significant weaknesses, but recommendations had been made which were being addressed.

Ms Sophia Brown of Grant Thornton drew the Committee’s attention to the improvement recommendations made in relation to financial sustainability, governance and improving economy, efficiency and effectiveness, and the management responses.

In response to comments regarding the need for more analysis of the full life cost of the current Capital Programme to ensure it is reasonable and affordable, the Director of Finance, Resources and Business Improvement advised the Committee that as set out in the Budget Strategy Risk Assessment Update, the Capital Programme was a very significant risk area for the Council.  It was a major undertaking to deliver a Capital Programme of this size and it was important to report on it, monitor the risks and ensure it was affordable.  At present the Council did not have significant levels of borrowing, but the Officers were aware of the need to increase the visibility of the costs of borrowing and further details would be added to future Committee reports.  Care was taken to ensure that there was a valid business case for all capital expenditure, including the cost of borrowing, as it was necessary as part of the assessment to demonstrate that a sufficient rate of return would be achieved to meet the capital financing costs.

During the discussion, the Finance team and the Internal and External Auditors were thanked for their work.

RESOLVED:  That the External Auditors Annual Report for 2021/22 and 2022/23, attached as Appendix A to the report of the Head of Finance, be noted.