Agenda item

External Audit Plan 2021-22


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.


The report outlined factors impacting the Audit and the Audit Plan and particularly reference was made to financial developments, the significant impact on the Council of the Covid 19 pandemic, the overall economic environment as well as the projects in place to tackle climate change.


It was noted that the Council was required to prepare group financial statements that consolidated the financial information for both the Council, Bernesali Homes and Penistone Grammar School 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 net Pension Fund Liability (as well as other significant matters arising from the audit) in their Audit Findings Report.


The planning materiality had been determined to be £8.805m for the Group and £8.721m for the Council which equated to 1.5% of the gross expenditure on the cost of services in the previous year.  The External Auditor would also continue to report uncorrected omissions and misstatements other than those that were ‘clearly trivial’ – the ‘clearly trivial’ threshold had been set at £430,000.  Following the publication of the 2021/22 draft accounts, and prior to starting the detailed audit work, the auditors would revisit the materiality calculation and update as necessary.  Any changes to the materiality levels would be detailed within the ISA 260 report submitted later in the year.


The risk assessments regarding the arrangements to secure Value for Money had identified one possible significant weakness in the council’s arrangements relating to the Ofsted Inspection of November 2021 on implementing Special Educational Needs and Disabilities reforms.  The External Auditors had also identified this as a key recommendation issue in their 2020/21 Value for Money work and this was included within their Annual Report.  As this inspection was carried out and reported in 2021/22 they considered this a continuing issue in the Value for Money arrangements for 2021/22 and as part of the review for 2021/22, they would follow up the Council’s actions in relation to the Ofsted findings.  In relation to the arrangements to secure Value for Money, no other risks of significant weakness had been identified at this stage, but this would be kept under review as the audit progressed.


Interim visits had taken place in March and April and the bulk of the final visit would take place from late July to September.  The finalisation and completion work was targeted to take place in accordance with the national deadline for audited accounts of 30th November, 2022.  The key deliverables were outlined in the Audit Plan and the Audit Findings report was due to be presented to this Committee on the 16th November, 2022 and the Annual Report on the VFM work would be presented in January 2023. 


The audit fee had been set at £180,468 (an increase from £180,218 in the previous year) but was subject to the Council meeting their requirements. 


Reference was also made to the requirement for the External Auditor to obtain an understanding of the Information Systems relevant to financial reporting in order to identify and assess any risks of material misstatement.    The report then outlined the areas currently identified to be within the scope of the audit.


The report also detailed other matters within the External Auditor’s responsibilities together with the progress made against prior year audit recommendations and the risk assessment against each item. 


In the ensuing discussion, the following matters were highlighted:


·         It was anticipated that from 2023 the previous timetable for the External Audit work would be reintroduced

·         The tender process for External Audit Work for the next five-year period had now commenced

·         Reference was made to the valuation of land and buildings, to the way in which such valuations were made and to the impact this could have on the accounts, the likelihood of a material financial statement error and why the valuation of land and buildings this was considered to be a significant risk.  It was noted that reference to this had also been made within the training/awareness session held prior to this meeting

·         In response to specific questioning, the External Auditor gave a brief outline of the progress being made with regard to the Financial Reporting Council inspection of the audit work and Value for Money Work for Barnsley Council.  He was hopeful, based on other similar inspections/audits in which he was involved, that the inspection findings would be positive and a report on should hopefully be available by September


RESOLVED that the External Audit Plan 2021/22 be noted and, insofar as this Committee is concerned, the action to be taken be supported.

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