Agenda item

8.1

Stephen Clark and Hayley Clark from Ernst and Young, the Council’s external auditors, attended the meeting and presented the report.

8.2

Stephen Clark informed the Committee that the external audit had been challenging this year.  Ernst and Young and the Council had had to adapt and continue to work together in a positive way and he extended his thanks to Dave Phillips and the team.

8.3

Key risks included property, plant and equipment value and commercial income which had been hit by the pandemic.  Pensions was also a challenging issue as the valuation was subject to market volatility.

8.4

There were also Value for Money (VFM) issues, which had been well managed to date.  These would continue to be scrutinised and there would be pressures on spending going forward.

8.5

Hayley Clark explained that for property, plant and equipment there had been a formula error in the spreadsheet and a further error, but both netted each other off.  There were still a number of other matters to close out.

8.6

Some additional work on pensions was taking place following the reports back from Deloittes (the external auditor of South Yorkshire Pensions Authority), as there was a query still outstanding.  There were also some queries on PFI schemes to close down.

8.7

Additional work on Going Concern has been carried out, the cash flow forecast had been looked at which required mandatory consultation.  This consultation was not expected to change the outcome.

8.8

Two risks had been identified under the VFM work.  West Bar regeneration and Heart of the City.  The 2019/20 arrangements were satisfactory, but they may need to be looked at again in the future.

8.9

Dave Phillips, Head of Strategic Finance, said that it had been a challenging year for everyone.  He thanked both the Council’s account team and the external audit team for working well and being no less thorough and providing professional challenge.  It was hoped to complete the audit by Christmas for sign off by the Chair of Audit and Standards Committee.

8.10

Councillor Simon Clement-Jones asked a question that although the Council was in a sound financial position at the moment, what did the Council need to look out for over the coming months?  Stephen Clark agreed that the Council was in a sound position currently, but even a large Council could tip quickly.  Poor decisions could include reckless, ill-informed decisions or no decisions.  However, Sheffield City Council had a history of trying to make good decisions and he encouraged the Committee to look out for poor decisions.

8.11

Councillor Angela Argenzio commented that it was important that the Council made decisions, but it should also try to build up reserves.  Stephen Clark explained that the Council would need to make choices.  It was important to take the advice of professional officers.  The reserves were not too bad currently and it would be important to make judicious use of reserves and examine decisions.  Be risk aware and have exit plans.

8.12

Councillor Mohammed Mahroof said that it was important to keep asking about West Bar and Heart of the City and thanked Ernst and Young for the reassurances.  Stephen Clark replied that it was right to look at city centre issues.  The high street had changed and the Council would need to be visionary in its approach.

8.13

RESOLVED: That the report be noted.