Agenda item
External Audit Plan 2019/20
The Committee will receive a report from the External Auditor providing an overview of the planned scope and timing of the statutory audit of the Council.
Minutes:
The Committee received a report from the External Auditor providing an overview of the planned scope and timing of the statutory audit of the Council.
It was noted that the Council was required to prepare group financial statements that consolidated the financial information for Bernesali Homes and Penistone Grammar Trust
In relation to significant risks, the External Auditor would communicate any significant findings in relation to Management override of controls, Valuation of Land and Buildings and Valuation of the Pension Fund Liability (as well as other significant matters arising from the audit) in their Audit Findings Report in July 2020.
The planning materiality had been determined to be £8.443m for the Group and £8.425m for the Council’s single entity statements which equated to 1.5% of the gross expenditure on the cost of services in the previous year. They would also continue to report uncorrected omissions and misstatements other than those that were ‘clearly trivial’ – the ‘clearly trivial’ threshold had been set at £422,000. Reference was also made to the way in which the materiality levels had been set.
Significant Value for Money risks had been identified and this was a key area of focus given the significant financial pressures facing the authority as well as the Glassworks development which was one of the largest projects undertaken by the Council.
The Interim visit would take place in February and March 2020 with the final accounts being presented in June and July. Initial meetings had already taken place with the Service Director Finance and with staff from the Finance Team. The key deliverables were outlined in the Audit Plan and the Audit Findings report and the fee had been set at £125,568 (and increase from £113,718 in the previous year) but was subject to the Council meeting their requirements. The increase in fees reflected the additional work which was required during 2019/20. Details of the additional work to be undertaken were provided within the report.
In the ensuing discussion particular reference was made to the following:
· Reference was made to the valuation of land and buildings which had been assessed as a significant risk and particular reference was made to the Glassworks project. It was noted that once a phase/project was brought into operation it was assessed at actual value rather than ‘at cost’. The rationale for such valuations was explained by representatives of the External Auditor and by the Head of Finance. It was noted that the work completed on the Metropolitan Centre , the Market, the Lightbox/Library and various public realm works would be brought into the accounts and valued appropriately once operational
· It was noted that in a new development for 2019/20, the External Auditor was to appoint its own valuer who would assess the instructions to the Authority’s Valuer, the Authority’s Valuer’s report and the assumptions that underpinned valuations. The reasons for this appointment were outlined
· There was a brief discussion of the potential implications of the new Code of Audit Practice which was anticipated shortly and arising out of this particular reference was made to the possible impact this could have on future audit arrangements, procedures and processes as well as the audit timetable given the current difficulties faced by all External Auditors in meeting the statutory deadlines for Local Authority audits.
RESOLVED that the External Audit Plan 2019/20 be noted and, insofar as this Committee is concerned, the action to be taken be supported.
Supporting documents: