Issue - meetings

To receive a position statement from the Deputy Chief Executive and Director of Corporate Operations and an update from the external auditors, Ernst and Young, on the status of the audit of Hampshire County Council for the year ending 31 March 2022.

The Committee received two reports under this item, a position statement from the Deputy Chief Executive and Director of Corporate Operations and an update from the external auditors, Ernst and Young, on the status of the audit of Hampshire County Council for the year ending 31 March 2022.

The Deputy Chief Executive introduced the position statement, explaining that the national delay caused by the issues surrounding the valuation of infrastructure assets had meant that a reassessment of the pension valuation figures was required, due to the delay in completion of the audit. Asides that and a few minor technical items to be resolved the audit was nearing completion. The Deputy Chief Executive was clear that the position was not of the external auditors making, and had resulted from the national issues. Members heard that the external auditors were engaging with the actuaries and pensions administration teams to produce a final calculation of the pension valuation. Members heard that, after July, the auditors would focus their entire capacity on completing any outstanding local authority audits ready for sign off and would not allow any further drift within the remit of their control.

In response to members questions it was heard that:

·         This was a national issue and most other local authorities were in the same position, and Members heard that central government would be appointing a select committee to review this and Ernst and Young had been invited to contribute to this work.

·         The statutory instrument provided a short term solution, for the next three years, to the issue of valuing infrastructure assets, and would allow the necessary time for accounting bodies to determine a longer term solution.

·         It was anticipated that the valuation of the pension fund at the end of March 2023 would be below that in March 2022, as a result of a number of well understood and monitored issues. The auditors were required to consider what information was available to the actuary as at March 2022, and whether this could have made a material difference to their estimated value. Providing this work could be completed swiftly, and the testing outcome was clear, the auditors hoped to have the audit completed shortly after the end of July.

·         Due to the delays from the 2021/22 audit, progress on the 2022/23 audit was significantly delayed. At this point in the year approximately 30% of the audit would normally be completed. The auditors hoped to have the 2022/23 audit completed by the end of December, but Members heard this could be postponed up until March 2024.

·         The Deputy Chief Executive would provide a written update on progress against the 2021/22 audit, once the pension testing was completed.

Councillor Kemp-Gee left the meeting at this point.

RESOLVED:

·         That the Audit Committee notes the position statement provided by the Chief Financial Officer on progress with completion of the 2021/22 audit of the statement of accounts

·         That the Audit Committee received and notes the update from the external auditors.