Bleadon councillors have ‘noted’ that they will not answer residents’ finance and governance questions, and instead has decided to engage the External Auditor at a cost of £355 per/hour!
UPDATE 21JUN23: External Audit invoices totalling over £10,307.10K Not including additional AGAR specific hours relating to the Clerk and Responsible Financial Officer (RFO) e.g "That up to an additional 20 hours work for the 2021/22 financial audit be authorised. Any additional time needed will be required to go back to the full council." 13FEB23 (Min 361.13)
UPDATE 12JUN23: External Audit Final Reports 2021/22, 2020/21 and BPC External Audit Action Plan
UPDATES: in blog below . So far, of 24 challege questions 15 were upheld or partially upheld, 2 BPC non-compliance with regulatiions, 3 recognised as not best practice by BPC, 3 needed more information submitted and 1 answered by the locum clerk. More updates also here
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Bleadon Parish Council approved its October minutes last week, which stated that it has received the External Auditors interim AGAR Report (Min 356.7.14) that states:
“We are unable to complete our review work on the AGAR and supporting documentation as a result of correspondence received in relation to 2021/22 and/or prior years. Once we have finalised our review and completed any additional work arising from that correspondence, a final report will be provided with the certificated of completion detailing any qualifications and ‘other’ matters. Our fee note for the limited assurance review will be issued when we certify completion” (last page)
It has also ‘noted’, but not discusseed, that BPC will not answer any outstanding AGAR questions raised by residents, until they hear from the External Auditor (Min 356.4.13) – but there was no full council agenda item and no resolution to this effect? On front of each Agenda it states:"N.B Councils cannot lawfully decide items of business that is not specified in the summons/agenda…”. The only public BPC discussion was NOT to discuss the AGAR situation at all, even though a councillor was trying yet again to express her continued concern over perceived lack of due process that may be raised with the External Auditor in the future (Hear Audio from 6 minutes). The question remains as to why BPC has been unwilling or unable to clearly answer seemingly simple finance and governance related questions to date, especially when they relate to regular non-confidential monitoring of budgets, contracts, trusts, grants, etc., information that should already be readily available to councillors?
However, BPC hasn’t minuted that its AGAR responses/lack of responses have resulted in the External Auditor being engaged at cost of £355 per/hour. Nor has it minuted that the External Auditor asked BPC to restart the whole 6 week AGAR process as the required information had not been published to residents. Nor has it minuted the fact that BPC posted the notice 4 times before doing so correctly! The associated correspondence also hasn’t been noted in the related agenda or minutes?
Regardless of the External Auditor outcome, why are BPC not striving to be open and transparent, and exercise general good practice? Why does it not want residents to know what they are doing and spending in a timely, accurate and transparent manner?
Some collated questions, summarised and accepted as eligible AGAR objections by the External Auditor in September 2022, include the following, which “are all linked to governance assertions (Assertions) or items of account (Boxes) in the 2021/22 AGAR and therefore would be considered to be eligible in that respect“ NB: Governance ‘Assertions’ relate to Section 1 of the AGAR and Items of Account ‘Boxes’ relate to Section 2 General AGAR Overview.
1. the Council’s failure to publish the past 5 years’ AGARs and associated external auditor reports (Assertion 3); [NB: Original Audit Q3] See below Objection 3
2. the Council’s governance and controls around the trust funds and assets that it has responsibility for (Assertion 9 and Boxes 9 & 11); [NB: Original Audit Q5] Audit's conculsion #7 & #8 - 30MAR23 - "We partially uphold these objections and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter. We note the Council’s planned improvements regarding governance and control in respect of trust funds and assets."
3. the inclusion in the AGAR figures of the Bleadon Children’s Play Area income and expenditure during the year (Boxes 1, 3, 6, 7 & 8); [NB: Original Audit Q6] Audit's conculsion #7 & #8 - 30MAR23- "We partially uphold these objections and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter. We note the Council’s planned improvements regarding governance and control in respect of trust funds and assets."
4. the Council’s failure to make the grant awarding process transparent (Assertion 2); [NB: Original Audit Q8] Audit's conculsion #3 & #9 - 30MAR23- "We partially uphold these objections and are minded to raise reporting matters in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of the issues that have been brought to our attention."
5. application by the Council for grant funding without Council approval (Assertion 2); [NB: Original Audit Q9] Auditor's conclusion #10 - 30MAR23- "We note that the examples that you have provided all relate to grant applications during 2022/23. We have confirmed with the Council that it did not make an application for grant funding during 2021/22. Conclusion: We do not uphold this objection."
6. lack of due process in respect of tendering (Assertion 2 and Box 6); [NB: Original Audit Q11] See below Objection 11
7. payment of some invoices in advance of Council approval (Assertion 2); [NB: Original Audit Q12] Auditor's conclusion #11 - 30MAR23- "We uphold this objection and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter"
8. poor management of the various contracts that the Council is party to, as well as the lack of transparency of these contracts (Assertion 2); NB: Original Audit Q13] Audit's conclusion #12 - 30MAR23- "We partially uphold this objection and are minded to raise reporting matters in our external auditor report on the 2021/22 AGAR in respect of this matter."
9. the Box 9 figure which is based on an incomplete asset register (Box 9); [NB: Original Audit Q14] Audit's conclusion #5 & #13 - 30MAR23 - "We uphold these objections and are minded to raise a reporting matter in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of this matter."
10. the Council’s failure to manage its earmarked reserves adequately (Assertion 1); [NB: Original Audit Q15] Audit's conclusion 6 - 30MAR23- "We uphold this objection and are minded to raise a reporting matter in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of this matter."
11. the Council’s budget setting and budget monitoring processes (Assertion 1); [NB: Original Audit Q16] =Audit's conclusion #14, 15 & 16 - 30MAR23"We partially uphold these objections and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter. We note the Council’s planned improvements regarding financial management."
12. the lack of transparency of the Council’s income, expenditure and reserves (Assertions 1 and 2); [NB: Original Audit Q17] Audit's conclusion #14, 15 & 16 - 30MAR23"We partially uphold these objections and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter. We note the Council’s planned improvements regarding financial management."
13. the powers under which the Council makes expenditure (Assertion 3). [NB: Original Audit Q18] See Clerk's explanation MAR23
14. the response given to Assertion 2 of the 2021/22 AGAR (internal control); (See Feb update)
15. the approval process for the Clerk/RFO’s salary and overtime, increased hours, salary level and additional part-time jobs, as well as questioning the existence of any job specification, job description, signed contract, job evaluation documents (Assertion 2 and Box 4); (See Feb update)
16. payments in respect of the Clerk/RFO’s professional subscriptions and training during the year, which you assert should be split proportionately with his other councils (Box 6); (See Feb update)
17. poor management of the various contracts that the Council is party to, as well as the lack of transparency of these contracts, in particular the magazine editor contract and the toilet cleaning contract (Assertion 2). (See Feb update)
The External Auditor assessed the following collated objections as “ineligible since they do not relate to a governance assertion or item of account on the 2021/22 AGAR,” however, has made specific comments in response to the resident’s noted question/objection:
1. the Council’s provision for the exercise of public rights in relation to the 2021/22 AGAR, during 2022 (Assertion 4 of the 2022/23 AGAR);- we are minded to raise an ‘other’ matter in our external auditor report in relation to non-compliance with the Regulations [NB: Original Audit Q1]
2. the fact that the objections that you raised in relation to the 2021/21 AGAR have not been addressed; - We have assessed objection 2 as ineligible since the facts and grounds on which the objection relies have not been specified. The objection is too general, although we note that these issues are already being considered by us in relation to the 2020/21 AGAR [see below] [NB: Original Audit Q2]
3. the Council’s failure to publish the past 5 years’ internal auditor reports; this is not a statutory requirement although it is considered to be best practice and we are minded to raise an ‘other’ matter in our external auditor report in relation to this issue [NB: Original Audit Q4]
4. the Council’s use of informal working groups instead of committees which you assert has led to a loss of accountability and transparency to the public; - this is not a statutory requirement although it is not considered to be best practice for a local council to use working parties INSTEAD of committees and we are minded to raise an ‘other’ matter in our external auditor report suggesting that the Council seeks appropriate advice in relation to this governance issue [BOB Note: E.g. undocumented Jubilee and Playground working group decisions and prior agreed budgets and expenditure] [NB: Original Audit Q7]
5. the Council’s failure to publish agenda papers/reports with the minutes;- this is not a statutory requirement although it is considered to be best practice, and we are minded to raise an ‘other’ matter in our external auditor report in relation to this issue. Transparency is an underlying principle of local government. In our view, consistent with the principles of transparency and accountability, there would be advantages in publishing agenda papers and we recommend that the Council routinely publishes agenda papers on its website. [NB: Original Audit Q10]
6. the response given to Assertion 3 of the 2021/22 AGAR (compliance with laws and regulations); - ineligible since the facts and grounds on which the objection relies have not been specified.
7. the recruitment process for the Clerk/RFO in 2019/20 - ineligible since it does not relate to a governance assertion (Assertion) or item of account (Box) on the 2021/22 AGAR.
Previous questions accepted as eligible AGAR objections by the External Auditor for AGAR 2020-21 (17 Aug 2021)
All six objections were eligible and accepted for further consideration.
1. The BPC AGAR process - seems to contradict its published notices, e.g. no access to related doc-umentation, which I find needlessly restrictive and obstructive, especially if BPC state they are transparent in their actions.
Objection 1: You object to the Council’s provision for the exercise of public rights. Comments: We note that, in relation to the provision during 2020 only, this objection relates to the response giv-en in Assertion 4 of the Annual Governance Statement. Audit's conclusion #1 - 30MAR23- "We uphold this objection and are minded to raise a reporting matter in our external auditor report on the 2020/21 AGAR in respect of this matter."
2. Contracts - Paid positions and posts tend not to be widely advertised (despite full council resolu-tion), and appear to have no published job description or Terms of Reference. When they do ex-ist BPC refuse to release them to the public, or are created after the post has been filled.
Objection 2: You object to the Council’s tendering processes and have provided some specific ex-amples during 2020/21. Comments: We note that this objection relates to the response given in Assertion 2 of the Annual Governance Statement as well as items of account in the Accounting Statements (employment contracts within 2019/20 will not be considered). Audit's conclusion #2 - 30MAR23"We partially uphold this objection and are minded to raise a reporting matter in our external auditor report on the 2020/21 AGAR in respect of this matter."
3. Grants - appear to be given without application or going through full council process, despite there being a Grants Policy. Also, BPC VAT connected queries.
Objection 3: You object to the Council’s grant awarding procedures. Comments: We note that this objection relate to the response given in Assertion 2 of the Annual Governance Statement as well as items of account in the Accounting Statements Audit's conclusion #3 - 30MAR23"We partially uphold these objections and are minded to raise reporting matters in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of the issues that have been brought to our attention"
4. Lack of published financial information (including for some councillors) - or information being re-moved from the website, with an increase in undocumented working groups obscuring any po-tential need for declarations of interest.
Objection 4: You object to the lack of transparency including failure to publish required infor-mation and use of working groups. Comments: We note that this objection relates to the re-sponses given in Assertion 2 and 3 of the Annual Governance Statement Audit's conclusion #4 - 30MAR23- "We uphold this objection and are minded to raise a reporting matter in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of these matters."
5. Asset Register - Lack of clarity over council ownership vs 'custodial trusteeship', anomalies and omissions.
Objection 5: You object to the asset register that supports Box 9. Comments:
We note that this objection relates to an item of account in the Accounting Statements Audit's conclusion #5 & #13 - 30MAR23- "We uphold these objections and are minded to raise a reporting matter in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of this matter."
6. Reserves - Lack of transparency and clarity over what reserves are held, why they are held, their expenditure and balances.
Objection 6: You object to the Council’s reserves. Comments: We note that this objection relate to the response given in Assertion 1 of the Annual Governance Statement as well as items of ac-count in the Accounting Statements Audit's conclusion #6 - 30MAR23"We uphold this objection and are minded to raise a reporting matter in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of this matter."
External Audit’s further guidance on eligibility of objections. “Our decision regarding the eligibility of your objections constitutes Step 1 of the auditor guidance referred to below:
Requirements for an eligible objection
Section 27 of the Local Audit and Accountability Act 2014 (‘the 2014 Act’) provides that local government electors for an area may object to the Council’s accounts concerning a matter in respect of which the auditor could:
•make a public interest report under paragraph 1 of Schedule 7 of the 2014 Act. Paragraph 1 of Schedule 7 of the 2014 Act provides that auditor must consider whether, in the public interest, they should make a report on any matter coming to their notice during the audit and relating to the Council or an entity connected with the Council, so it can be considered in accordance with Schedule 7 of the 2014 Act or brought to the public’s attention; and/or
•make an application to the court for a declaration that an item of account is contrary to law under section 28 of the 2014 Act.
Section 27 requires that objections must be made in writing and copied to the Council. Regulation 14 of the Accounts and Audit Regulations 2015 (‘the 2015 Regulations’) provides that objections may only be made in a single 30-day period of which notice has been given under Regulation 15 of the 2015 Regulations.
Regulation 17 of the 2015 Regulations provides that a notice of objection under Section 27 of the 2014 Act must specify:
•the facts on which the local government elector relies;
•the grounds on which the objection is being made; and
•so far as is possible, particulars of any item of account which is alleged to be contrary to law; and any matter in respect of which it is proposed that the auditor could make a public interest report under section 24 of and paragraph 1 of Schedule 7 to the 2014 Act.
Furthermore in February 2018, in exercise of the power in paragraph 9 of Schedule 6 of the 2014 Act, the National Audit Office, on behalf of the Comptroller and Auditor General, issued Auditor Guidance Note 4: Auditors’ Additional Powers and Duties (‘AGN 04’). Paragraphs 20 to 28 of AGN 04 provide guidance on determining whether an objection is eligible. We must have regard to that guidance. [See also AGN 07 - Auditor Reporting]
UPDATE 12JUN23 (See BPC 12JUN23 Agenda 11MAY23 Min 364.13 & 12JUN23 365.17)
- External Audit Final Reports
- BPC External Audit Action Plan
UPDATE 30MAR23: External Audit's conclusions and findings Part 1 (extract)
UPDATE 14MAR23: BPC submit responses to External Audit 2020/21 and 2021/22
UPDATE 08MAR23: BPC AGAR 13 Mar 23 Agenda items especially items 14 - AGAR 20/21,15 - AGAR 21/22,16 - Internal Audit, & 18 - Reserves.
UPDATE 01MAR23: (Along with the six 2020-21) Ten of the 2021-22 eligible objections have been accepted for further consideration: (See Mar23 Agenda)
- Objections 5 and 6: You object to Council’s governance and controls around the trust funds and assets that it has responsibility for and the inclusion in the AGAR figures of the Bleadon Children’s Play Area income and expenditure during the year. Comments: We note that these objections relate to the response given in Assertion 9 of the Annual Governance Statement as well as items of account in the Accounting Statements. Conclusion: We accept these objections for further consideration. Audit's conculsion #7 & #8 - 30MAR23- "We partially uphold these objections and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter. We note the Council’s planned improvements regarding governance and control in respect of trust funds and assets."
- Objection 8: You object to the Council’s failure to make the grant awarding process transparent. Comments: We note that this objection relates to the response given in Assertion 2 of the Annual Governance Statement as well as items of account in the Accounting Statements. Conclusion: We accept this objection for further consideration. Audit's conculsion #3 & #9 - 30MAR23- "We partially uphold these objections and are minded to raise reporting matters in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of the issues that have been brought to our attention."
- Objection 9: You object to an application by the Council for grant funding without Council approval. Comments: We note that this objection relates to the response given in Assertion 2 of the Annual Governance Statement as well as items of account in the Accounting Statements. Conclusion: We accept this objection for further consideration. Auditor's conclusion #10 - 30MAR23- "We note that the examples that you have provided all relate to grant applications during 2022/23. We have confirmed with the Council that it did not make an application for grant funding during 2021/22. Conclusion: We do not uphold this objection."
- Objection 12: You object to payment of some invoices in advance of Council approval. Comments: We note that this objection relates to the response given in Assertion 2 of the Annual Governance Statement as well as items of account in the Accounting Statements. Conclusion: We accept this objection for further consideration. Auditor's conclusion #11 - 30MAR23- "We uphold this objection and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter"
- Objection 13: You object to the poor management of the various contracts that the Council is party to, as well as the lack of transparency of these contracts. Comments: We note that this objection relates to the response given in Assertion 2 of the Annual Governance Statement as well as items of account in the Accounting Statements. Conclusion: We accept this objection for further consideration
Audit's conclusion #12 - 30MAR23- "We partially uphold this objection and are minded to raise reporting matters in our external auditor report on the 2021/22 AGAR in respect of this matter."
- Objection 14: You object to the Box 9 figure which you assert is based on an incomplete asset register Comments: We note that this objection relates to items of account in the Accounting Statements. Conclusion: We accept this objection for further consideration. Audit's conclusion #5 & #13 - 30MAR23- "We uphold these objections and are minded to raise a reporting matter in our external auditor reports on the 2020/21 and 2021/22 AGARs in respect of this matter."
- Objections 15, 16 and 17: You object to the Council’s failure to manage its earmarked reserves adequately; the Council’s budget setting and budget monitoring processes; and the lack of transparency of the Council’s income, expenditure and reserves. Comments: We note that these objections relate to the responses given in Assertions 1 and 2 of the Annual Governance Statement as well as items of account in the Accounting Statements. Conclusion: We accept these objections for further consideration. Audit's conclusion #14, 15 & 16 - 30MAR23"We partially uphold these objections and are minded to raise a reporting matter in our external auditor report on the 2021/22 AGAR in respect of this matter. We note the Council’s planned improvements regarding financial management."
Two of the objections raised have been accepted as eligible; however, they have not been accepted under Step 2 of AGN 04 for the reasons set out below:
- Objection 3: You object to the Council’s failure to publish the past 5 years’ AGARs and associated external auditor reports (Assertion 3). Findings: It is a requirement of the 2014 Act and its associated Regulations that the past 5 years’ AGARs and associated external auditor reports are publicly available. We note that the Council had refused to publish these on its website and had not responded to your requests for copies of them. We are minded to include this as a reporting matter in on external auditor report on the 2021/22 AGAR. Conclusion: We do not accept this objection for further consideration.
- Objection 11: You object to the lack of due process in respect of tendering. Findings: Having reviewed your objections and the additional information provided by you, we are not in receipt of adequate facts or grounds for this objection. Conclusion: We do not accept this objection for further consideration.
UPDATE 13FEB23: BPC part response to ojections 14-17 above
Min 361.7. "To ratify the responses provided to the questions raised in relation to the 2021/22 AGAR (pages 20 & 21 second response to follow). The Council were informed that only one of the responses to the two set of questions raised in relation to the 2021/22 AGAR had been completed so they would only be considering the response contained within the agenda papers. Resolved: To ratify the response contained within the agenda papers with the insertion of 21 in the subtitle of the letter and a check on the length of time the previous Clerk spent as a locum. The resolution was correctly proposed and seconded (For: Cllrs Davies, Getty, Hemingway and Williams. Against: Cllrs Clarke & Sheppard, Abstention Cllr Garrett)"
UPDATE 16JAN23 - listen to the AGAR discussion (listen to the 7min Audio file)
UPDATE 30JAN23 - listen to the AGAR discussion (listen to the 5min Audio file)
DEC23 - 60 not 2 plaques as stated in the approved DEC22 Min 358.8.129? and £1K grant to BIB/BPC? (listen to the 5min Audio file)
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