The Council’s External Auditor, Grant Thornton, will submit a letter presenting an updated Audit Plan for 2019/20 providing an update of the scope of audit work planned including additional work being undertaken, detailing in particular the addition of a significant audit risk in respect of Covid 19, giving details of the Value for Money and Financial Standing position as well as various Regulatory Changes and the potential impact on Fees charged.
The Council’s External Auditor, Grant Thornton, submitted a letter presenting an updated Action Plan for 2019/20 providing an update of the scope of audit work planned, including additional work being undertake, detailing in particular the addition of a significant audit risk in respect of Covid 19, giving details of the Value for Money and Financial Standing position as well as various Regulatory Changes and potential impact of Fees Charged.
Mr G Mills, representing the External Auditor, referred to the following:
· The liaison arrangements in place with the Service Director Finance and his Team particularly in the light of the implications of Covid 19. He commented that the Authority had entered the Covid period in a relatively strong position compared to some other Councils. Discussions were, however, progressing in terms of the action being taken to address the potential deficit and ongoing financial implications. Work was taking longer than normal largely because of social distancing and remote working arrangements
· There were changes to the timetable for the accounts. These had to be submitted to External Audit by 31st August, 2020 although the Finance Team were working to an earlier deadline of 27th June. In addition, the audit of accounts was required to be complete by 31st November but Grant Thornton were working to a mid October deadline
· Reference was made to challenges in respect of property valuation, as mentioned earlier in the meeting and at the previous meeting. Discussions were progressing with the Director of Finance and his Team
· Other things to consider were the recoverability of debtors or receivables and discussions had taken place with the Finance Team who were currently undertaking work in this area
· The audit regulators had been very clear that lockdown was not to be seen as an excuse to have a let up in the drive to continually increase audit quality
· The rationale for the increase in audit fees was outlined
In the ensuing discussion particular reference was made to the following:
· The items included in the Audit Plan, supplemented by the additional work now being undertaken, had been stress tested as a result of the Covid 19 pandemic and the Committee could take some reassurance from this
· With regard to the Pension Assets/Deficit, given the volatility around certain markets (aviation and hospitality for example) questions were asked about the possible diminution in equities. The Service Director Finance did not feel that there would be any impact on the value of the Pension Fund deficit reported in the 2019/20 accounts. His concern would be for the current year and beyond, however, in relation to the South Yorkshire Pension Fund, an equity protection scheme was in place which, in essence, was an insurance policy to protect against shocks in the equities market. He was, however, in ongoing dialogue with the Pensions Authority regarding overall funding levels and the impact on deficit recovery moving forward. From an External Audit perspective, the Pension Fund accounting entries were previously a significant risk and this was a key area of focus for the audit. The External Auditor then outlined the way in which this audit work was being undertaken. He made reference to the use of an auditor expert, PWC, who audited all Pension Funds and Deloitte who were the auditors of the South Yorkshire Pension fund. The outcome of reviews/investigations would be discussed as part of the Barnsley External Audit work with the Service Director Finance and any findings would be included within the ISO 260 report submitted in late September/early October
· The Service Director would follow up queries as to whether or not the Equities Insurance Policy included a force majeure clause enabling the insurance company to decline to pay out any claims. It was felt that this was unlikely
RESOLVED that the letter and report be received and the action being taken and the increase in fees be noted.