Barking and Dagenham Council's audit is expected to continue facing disclaimed opinions for several more years, with a full unqualified opinion unlikely before the 2028/29 financial year. This projection was outlined during the Audit and Risk Committee meeting on Wednesday, March 25, 2026.
Grant Thornton, the Council's external auditors, reported that while the 2023/24 and 2024/25 financial statements for both the Council and the Pension Fund received disclaimed audit opinions due to national backstop arrangements, planning for the 2025/26 audit is underway. The primary focus for the upcoming audit will be on rebuilding assurance over opening balances, in-year income and expenditure, and closing balances.
The disclaimed audit opinions for Barking and Dagenham Council's financial statements over the last few years stem from national backstop arrangements which are in place.
A significant challenge highlighted is the difficulty in obtaining assurance over opening balances for the Council's accounts due to several years of disclaimed opinions.
This lack of assurance, particularly over key areas such as usable and unusable reserves, property, plant and equipment, and other brought-forward balances, fundamentally constrains the ability to issue an unmodified audit opinion for 2025/26.
To address these challenges and 'rebuild assurance', the Council and Grant Thornton are implementing several key steps and strategies. For the Council's accounts, the firm's approach to opening balances is complicated by the extended period of disclaimed opinions. However, a priority is to deliver the INE [in-year income and expenditure] and closing balances this year
to establish a foundation for future audits. Measures include lessons learned sessions with the finance team and Grant Thornton, quarterly balance sheet reviews, early liaison with subsidiaries, and enhanced training for finance staff and service managers.
Specialist support has also been secured for the Collection Fund and IFRS 16 adoption, alongside additional interim staff. Regular meetings between the finance team and auditors are in place to ensure smooth progress, and an audit risk register and issues log are being maintained by the Corporate Finance Team to prevent delays. The Head of Corporate Finance, alongside the Head of Pensions, Treasury and Capital and the Director of Financial Services, has conducted a joint assessment of accounts and audit preparedness. This identified resourcing as a major risk, which the Council is mitigating by commissioning external technical support and securing additional interim staff.
For the Pension Fund, there is more optimism. The issue of opening balances is less complex for the Pension Fund, as it did not have the issue of opening balances to contend with which made it easier to gain assurances on the previous years' audits.
Consequently, there is a possibility of moving from a disclaimed to a qualified opinion for the 2025/26 financial year. Fund officers are collaborating with the Fund custodian and investment managers to address issues raised by Grant Thornton regarding Level 3 investments. Looking ahead, and subject to satisfactory evidence being available to support the opening balances for 2025/26, we anticipate being able to issue an 'Except for' audit opinion for the 2025/26 financial statements.
The scale fee set by Public Sector Audit Appointments (PSAA) for the 2025/26 audit is £501,208 for the Council audit and £91,182 for the Pension Fund. This represents an increase of £13,650 (2.8%) compared with the 2024/25 fee. While the report mentions commissioning external technical support and recruiting additional interim staff to mitigate resourcing risks, a specific total cost or resource allocation for these efforts is not provided.
Further details on the audit plan and accounting policies for 2025-26 can be found in the 2025-26 Audit Plan and Accounting Policies. Information on the Audit and Risk Committee meeting can be accessed via the Agenda frontsheet and the Public reports pack.