Agenda item

The Chair welcomed new County Councillor Matthew Salter to his first Audit Committee meeting.

Jacquie Meadows, Head of Finance, introduced new members of the Finance Team Adam Latham, Financial Accountant, and Emma Hardman, Management Accountant, who were in attendance to observe the meeting.

Georgia Jones, Key Audit Partner, Grant Thornton presented the report for the Addendum to the Audit Plan to the meeting.

It was noted that the external auditors had identified an additional risk to the audit plan which had been agreed by the Audit Committee on 25 July 2023. The additional risk related to incomplete or inaccurate information transferred to the new general ledger hosted by Lancashire County Council (LCC) which would require additional work in order to respond to the risk.

In January 2023, Lancashire Fire and Rescue Service moved from using Oracle E-Business Suite (EBS) ledger system to Oracle Fusion, which was a cloud-based system. Lancashire County Council hosted the Oracle Fusion system on behalf of LFRS and processed employee, supplier, and customer personal and financial data.

It was important when implementing a new significant accounting system that sufficient controls were in place to ensure the integrity of the data. There was also a risk over the completeness and accuracy of the data transfer from the previous ledger system and potential challenges in producing robust control account reconciliations and detailed transaction reports.

LCC experienced problems with the data migration from the Oracle EBS to the Fusion system and there were also instances of data breaches. Therefore, it had been identified that the completeness and accuracy of the transfer of financial information to the new general ledger was a significant risk which was one of the most significant assessed risks of material misstatement.

The additional work to respond to the risk included: -

-        completing an Information Technology (IT) environment review by IT specialists to document and evaluate the design and implementation of controls within the new general ledger system; and

-        map the closing balances from the previous ledger to ensure accuracy and completeness of the financial information.

In response to a query from County Councillor Salter regarding the reason that migration to Oracle Fusion had not been identified as a significant concern at the Audit meeting in July, Georgia Jones explained that external audit were unaware of significant concerns in July and it was only when system controls were investigated that the concerns were found by IT on the control issues on the implementation of the new system. At the July meeting, the planning had been carried out and the reports had been drafted and so the November meeting had been the first opportunity for external audit to bring the update.

County Councillor Singleton asked if additional costs relating to the addendum were included in the agenda. Georgia Jones advised that the item was related to the following year 2023/24 audit work, therefore once the current audit work had been completed, potential costs could be assessed, discussed with the Director of Corporate Services, and brought to the Committee for approval.

Resolved: That the Committee noted and endorsed the report.