Agenda item

(External Auditor) To consider the attached reports (AGC-019-2016/17).

Audit Plan for 2016/17

The External Auditor presented the Audit Plan for 2016/17, which summarised the significant risks that could impact on the audit as well as the key outputs. There were detailed sections outlining the scope of the audit, a risk assessment and the proposed audit fee.

The External Auditor reported that it was intended to examine the process used to establish a valuation, as there was a risk with valuations based on assumptions that were uncertain and subjective by nature. It was also highlighted that the presentation of some of the financial statements would change, which would also require a restatement of the Comprehensive Income and Expenditure Statement for 2015/16.

Planning Letter for 2017/18

The second report presented by the External Auditor was the Planning Letter for 2017/18, which summarised the proposed fee and audit arrangements for the 2016/17 financial year.

The External Auditor reported that the proposed core audit fee would remain at £64,672 whilst the proposed Certification Fee had yet to be set; this was currently expected to be £18,533 for 2016/17. The focus of the planned work would again be on the audit of the financial statements, the value for money conclusion and the Whole of Government Accounts return.

The External Auditor stated that the planned outputs for 2017/18 were as follows:

·        a detailed Audit Plan in March 2018;

·        a report on any significant deficiencies in internal controls arising from the interim audit in June 2018;

·        the Audit Completion report in July 2018;

·        the opinion on the financial statements, the use of resources conclusion and certificate of audit closure in July 2018;

·        the consistency opinion on the summarisation schedules in July 2018;

·        the Annual Audit Letter in August 2018; and

·        the Grant Claims and Returns Certification report in December 2018.

The Committee noted that the Audit Schedule had been brought forward by about two months in comparison to previous years, and the External Auditor emphasised that Councils should have been preparing for the new Schedule. The Director of Resources explained that the Department of Communities & Local Government had deemed there was a demand for the Whole of Government Accounts to be prepared quicker than in previous years. The Council could cope with the deadlines being brought forward by two months, and the Director was not expecting any material errors to be forthcoming in the Accounts, but highlighted there was always a balance between speed and accuracy; i.e. more speed, less accuracy.

Grant Claims & Returns Certification Report

The final report presented by the External Auditor was the Grant Claims and Certification Report for 2015/16, which detailed the key findings from the External Auditor’s certification work.

The External Auditor highlighted the key issues arising from the work, along with recommendations for the future and an Action Plan. The first item on the Action Plan was to provide refresher training to all Benefit Assessors to ensure that they were aware of how earned income should be calculated in respect of Housing Benefit, as some errors had been identified in this calculation. For the Pooled Housing Capital Receipts Return, an issue was identified relating to the recording of quarterly amounts arising from the disposal of dwellings which took place before 1 April 2012 under the Right-to-Buy scheme. Therefore, the second and final item on the Action Plan was to review the quarterly amounts submitted for the pooling of capital receipts prior to the final submission to ensure the return was consistent with supporting documentation held by the Council.

The Committee noted that the final fee charged for this work was £19,691; this was slightly less than the original planned fee of £20,533.

Resolved:

(1)        That the following reports from the External Auditor be noted:

            (a)        the Audit Plan for the audit of the 2016/17 financial year;

            (b)        the Planning Letter outlining the proposed fees and programme of   work for the 2017/18 financial year; and

            (c)        the Grants Claim & Returns Certification for the year ended  31 March             2016.