Agenda item

To receive the minutes of the meeting held on the 28^th October, 2020.

The minutes of the meeting held on the 28^th October, 2020 were taken as read and signed by the Chair as a correct record.

Written responses to questions arising from the Minutes by Members of the Committee were provided as follows:

·         In response to questioning it was reported that Grant Thornton were subject to 6 Financial Reporting Council (FRC) reviews across their NHS and Local Government client base in 2018/19.  Of those, 5 had been rated at ‘2b’.  It should be noted that these 6 audits only represented a small proportion of their NHS and Local Government client base (where they had 33% and 45% of the external market respectively) and by the FRC’s admission, they selected the higher risk audits.  None of the 6 files reviewed were in Yorkshire. 

Clearly the results of these reviews were not the outcomes that Grant Thornton were looking for.  The FRC’s principal finding with the files was in relation to the level of audit work performed and challenge to clients and their valuers in respect of the valuation of PPE (Property, Plant and Equipment) (fixed assets).  Grant Thornton had discussed at previous Committee meetings the FRC’s focus on this area of public sector accounts. 

In response to the findings, for the 2019/20 audits they had engaged their own ‘auditor’s expert’ (Wilks Head Eve LLP) to enhance and augment their work on the valuation of PPE, using them to consider assumptions and judgements used by their clients and their valuers.

In relation to the Council an assurance was given that Grant Thornton had performed a comprehensive and robust review of the PPE balance as part of the 2019/20 audit.  They had performed extensive testing of PPE valuations, vigorously challenging both the Finance Team and the Council’s valuer to justify their valuations of PPE.

It was hoped that the actions taken in their 2019/20 audits were acknowledged by the FRC in their review of the 2019/20 audit files which would take place in 2021.

·         It was noted that Grant Thornton had singed their opinion on Monday 30^th November, 2020, which followed their presentation to full Council on the 26^th November, 2020.  The opinion was an unqualified ‘clean’ opinion on the accounts with emphasis of matter paragraphs on the valuation of PPE and the Council’s share of the Pension Fund assets – both as a result of Covic-19.  The Value for Money conclusion had also been unqualified

·         The National Audit Office revised audit code for Value for Money work was to be effective from the 2020/21 audits.  There would be a minimum level of work to be performed across 3 areas (financial position, governance and agreements to secure Efficiency, Economy and Effectiveness).  There would be a separate report produced by the auditors summarising the VFM work.  It proposed that the External Auditors would summarise the new approach to the Audit and Governance Committee in the New Year

·         It was also proposed that Grant Thornton would contribute to a future Audit and Governance Workshop on the findings form their public interest report findings at both Nottingham City Council and the London Borough or Croydon in terms of the lessons to learn/red flags that resulted in the circumstances at these two councils

·         It was noted that the contract with NPS Barnsley Ltd would terminate on the 31^st March, 2021.  The contract with NORSE would terminate on the 31^st July, 2021