The Audit Results Report will be presented to Members of the Audit & Governance Committee by representatives from Ernst & Young LLP.
The Chair invited the Associate Partner, Kevin Suter and the Audit Manager, James Stuttaford, from Ernst & Young LLP to present the Audit Results Report. Following the completion of the audit, they were proposing to give an unqualified audit opinion, and there were no matters to report by exception within their reports covering their value for money responsibilities. They provided an overall summary of the report and highlighted some areas that had changed since the report had been written.
Page 11 gave a scope update compared to audit planning that they provided last year. There was a change in materiality, made following receipt of the draft financial statements. Additional work had been done around pensions, and the pension specialists had no issues to raise. There was also some additional work regarding Covid-19, which did not impact the overall work. Page 12 showed the status of the audit, all the outstanding items had since been closed down, and all that was required was the signed version of the accounts, and the signed management letter of representation. Currently, they were unable to certify the audit as were waiting on the Whole of Government Accounts Group audit instruction. Page 13 summarised the value for money, for which they would provide a detailed report at the Auditors Annual Report, however there were no risks to report. Page 14 showed the areas of audit focus, there were no matters to report on the first and second fraud risks. Following conclusion of the work after the report had been written they had identified a difference in the valuation for The Arcade, Bognor Regis, which they considered to be an overstatement of £316,000. This value was not material overall to the statement, so they had not requested an adjustment to the accounts. Another area of audit focus was the pension liability valuation, for which they had noted a difference of £662,000 between estimated gross asset value compared to their estimate. This was again immaterial to the overall accounts, so they had not requested adjustment. New for this year was the Accounting for Covid-19 Related Grant Income, for which there were no matters to report, however the Summary of Audit Differences on Page 29 did show a corrected difference. This was due to the consideration of what was classed as a principal or an agent grant. They found to be £2.3 million worth of grants that were principal grants rather than agent grants and had asked this to be brought into the accounts.
The fees area on Page 38, provided a table of their final fees from 2019/20, which was approved by PSAA and had now been paid. They had also given an update to the final fee for 2020/21, they were unable to provide a final fee at this stage, as they did not yet have a total that would relate to scale fee rebasing. They were hoping that this would be provided with the Auditors Annual Report.
The Associate Partner highlighted that they had received correspondence from a member of the public regarding the redevelopment of Bognor Regis and the Levelling Up Fund. After making some enquiries they had concluded this had no impact on the current year’s audit, however as this was a major project, they would be looking into this in relation to Value for Money Risk Assessment.
A discussion then took place, and the following points were raised:
· Tribute was paid to the work of the auditors and the financial team. It was thought this was an excellent report.
· Clarification was requested regarding the differences identified on page 14, which was provided.
· Clarification was requested on the overstatement on the Arcade valuation, which was provided.
This was an item for information only.