To consider the briefing note on the Redmond Review.
Adele Taylor explained that the briefing on the Redmond Review would probably be the first of many as it was important to keep the Committee up to date. Tony Redmond had undertaken a review of external audit arrangements and his report with recommendations had been published in September 2020. External audits had been late across the country for numerous reasons but good audit was part of good governance. Adele Taylor had waited until now to bring the review to the Committee to see what the response was from the Ministry of Housing, Communities and Local Government (MHCLG). A summary of the recommendations was provided in the report and it was clear that there were weaknesses across the whole system. Without prompt action, there would be significant risk. MHCLG accepted most of the findings but currently there was uncertainty about what that would look like going forward for local authorities. There had been an extended deadline for all authorities to submit their accounts, with Adele Taylor confirming that RBWM was working towards meeting the earlier deadline wherever possible. The pension fund had an impact across Berkshire, with RBWM administering the fund on behalf of the other five Berkshire local authorities. MHCLG were not keen on having an overall body which would have oversight of external audit. There was no timeline for when any further updates on the review would be received by the Committee but Adele Taylor said that officers wanted to get the 2020/21 accounts signed off smoothly over the coming months.
Councillor Sharpe asked what outcomes MHCLG wanted from the review.
Adele Taylor said that audits were generally late which was not good for transparency. Simplification of audit statements was something that could be improved. It was hoped that through better transparency it would encourage more people to take an interest in local authority accounting.
The Chairman asked if all local authorities were on the same financial year and therefore had to meet the same deadlines. She noted in the report that up to 40% of audits had failed to meet the required deadline.
Adele Taylor confirmed that all local authorities and the public sector, including Health, needed to abide by the same deadlines. Resources needed to be balanced across all areas, some authorities which covered a significant district would have limited resources as a result.
Councillor L Jones said that expectation and consistency were mentioned a lot and asked if the new framework would look to incorporate this.
Adele Taylor said that it was too early to say but she hoped it would. There was a balance between the resources of the auditors and those of the finance team. The finance team had seen a significant increase in workload and it was important to have a good relationship with the external auditors.
Councillor Bond said that simplification would allow more people to understand the accounts. He suggested that the accounts should be presented line by line. The amount of detail currently was extensive, local authority accounts were often longer in length than central government.
Adele Taylor said that simplification was something that had been discussed in the sector. The authority needed to provide compliant accounts but detail and explanations would be provided by the finance team where possible under the regulation framework.
Councillor Bhangra noted that MHCLG had accepted most of the findings in the report and asked which areas they had not agreed with.
Adele Taylor said the main thing was the overall governing body recommendation but MHCLG had committed to considering an alternative.
Councillor Hilton, Cabinet Member for Finance and Ascot, said that work had been done to make the accounts more accessible to the public. More narrative had been added which helped explain the figures and findings being presented.
Jonathan Gooding said that it would be beneficial for the accounts to be simplified, as long as they still complied with the accounting standards. Particularly in the legal aspects and the complexity of the accounts, narrative would prove to be useful. However, narrative reports could be lengthy and therefore balance was needed.
Adele Taylor informed Members that she would bring further updates to the Committee once they were available.
RESOLVED UNANIMOUSLY: That the Audit and Governance Committee noted the report.