Agenda item

1.     The item was presented by Sarah Ironmonger and Lucy Nutley from the external auditors, Grant Thornton. The following key points were highlighted:

        a)     Following the sign-off from the 2024/25 accounts in November, the audit team were engaged with backstop clients due for completion by the end of February. Planning work for the 2025–26 audit had commenced and Grant Thornton were working with the Finance Team to bring forward substantive testing to support a more efficient final audit period.

        b)     With respect to the Kent Pension Fund, the auditors confirmed that the Fund was also at the planning stage, with initial work scheduled for the coming weeks. The valuation at March 202 required additional audit activity. The auditors also highlighted sector?wide developments, including Backstop processes and Chief Accountant workshops being attended by Finance officers.

2.     In answer to some Member comments and questions, the following was

        said:

        a)     Oracle EBS to Oracle Fusion Migration - Ms Ironmonger confirmed that Grant Thornton’s specialist IT audit team had begun work on assessing both the data migration and user access controls. She advised that the work was at an early stage and the findings were yet available. She noted that, based on experience elsewhere, issues tended to relate to user profiles rather than significant system failures.

        b)     Complex Financial Reporting Issues - Ms Ironmonger advised that the commentary originated from a sectorwide webinar and was not specific to Kent. She confirmed that she was not aware of any issues relating to financial instruments within the Council’s accounts at this stage.

        c)     Dedicated Schools Grant (DSG), SEND Pressures, and Safety Valve Scheme - Ms Ironmonger confirmed that the auditors had already issued a statutory recommendation in relation to SEND and DSG, which had been presented in the Annual Auditor’s Report in November. Grant Thornton continued to engage with officers on arrangements to manage the deficit.

        d)     Fair Funding Review and Local Government Reorganisation (LGR) -

Ms Ironmonger noted that the Council would receive advice from the Section 151 Officer as part of the forthcoming budget process. She confirmed that Grant Thornton was aware of the risks associated with LGR, including financial, structural and operational challenges. The auditors would continue to discuss preparation, risk management and financial implications with officers once Government decisions were known.

        e)     Home?to?School Transport Costs - Ms Ironmonger reiterated that SEND?related cost pressures formed part of the significant weakness already reported, and audit engagement with officers on this matter was ongoing.

    f)      Whole of Government Accounts (WGA) - Ms Nutley explained that Whole of Government Accounts procedures were still being finalised nationally. Once completed and reviewed by the National Audit Office, Grant Thornton would issue the completion certificate, formally closing the year’s audit.

        g)     Teachers’ Pension Scheme Certification - Ms Nutley reported that the delays arose from a change in the Teachers’ Pensions payroll system and difficulties retrieving evidence from the legacy system. Grant Thornton had re-engaged with Teachers’ Pensions and the Council to progress the outstanding returns.

        h)     Local Government Reorganisation Reserves - Ms Ironmonger stated that in areas where LGR had been confirmed, such as Cumbria, authorities had created reserves once the Government’s direction was clear. She advised that KCC would need to consider future costs and risks as the position developed. Ms Nutley confirmed that if the Government timetable remained unchanged, the auditors would expect the Council to have considered provision and would comment if none were made.

        i)      Mr Rayner formally noted that no provision for disaggregation costs existed in the current draft budget and requested that his comments be recorded.

3.     RESOLVED the Committee noted the External Auditor’s verbal update for Kent County Council and the Kent Pension Fund.