Agenda item

Audit Planning Report

The Audit Planning Report – update for the year ended 31 March 2021, which will be presented by a representative from the Council’s external auditors Ernst and Young LLP, is attached to this report.

Minutes:

            The Chair invited the Associate Partner, Kevin Suter and the Audit Manager, James Stuttaford, from Ernst & Young LLP to present the Audit Planning Report.

 

            The Associate Partner explained that the plan was being presented to the Committee later than normal, and it usually would have been presented in March. This was due to a backlog that had been created by the Coronavirus pandemic. Changes to last years timetable had occurred and the deadlines had all moved backwards. They had also had difficulties auditing in the current environment. They had a large backlog, an issue that was affecting all public sector auditors. He advised Members may be interested in the Public Accounts Committee’s recent summary of the issues and challenges facing public sector audit. They had to take a very difficult decision, which he recognised would be unpopular, to prioritise audits and schedule those according to when they had resources available. They had decided to schedule their major local audits first, which maximised their contribution to the National Audit Office. They would then schedule the smaller audits afterwards. He explained they had moved the audit back to November this year.

 

            The Audit Manager drew attention to page 29, the Audit Strategy for the year. He noted that most risks on file remained the same as in previous years. One of significant risks in the previous year was the valuation of land and buildings, due to Covid-19 and lockdown, which led to the expert valuer recording a material valuation of uncertainty in the report. This year the risk has been reduced, it was maintained at an inherent risk due to property plant and equipment valuation still representing a significant balance in the Council’s accounts, and there was an inherent estimation of uncertainty involved. The pension liability valuation remained an inherent risk. A new area of focus was around the accounting for Covid-19 relating to grant income. This was because it was a significant amount of money that had been passed down to the Council, and was a new area of accounting for this year. He also highlighted Value for Money arrangements which had changed slightly for this year. On page 41 it noted there was a new 2020 Code of Audit Practice, which had resulted to a change in Value for Money arrangements. Instead of giving a Value for Money conclusion, there would now be a Value for Money commentary. They would be supplying this in the Auditors Annual Report instead of the Annual Audit Letter.

 

            The Chair invited questions from Members. It was asked what the delay in auditing would mean for the Group Head for Corporate Support and the finance team. The Group Head for Corporate Support explained that the rescheduling of the Audit would use more financial resources at a time when they would be very busy. However, she trusted their working papers would be up to standard and the audit would be completed as soon as possible.

 

            The Chair was disappointed with the delay, however he understood these were difficult times. He noted the additional demands on the Group Head for Corporate Support’s department and said she should inform the Committee if there was anything that could be done to assist.

 

            The Committee noted the delay in the scheduled external audit to November 2021, and the remainder of the Audit Planning Report.

 

Supporting documents: