7.1             Attention was drawn to Grant Thornton’s progress report, circulated at Pages No. 9-23, which set out the progress which had been made in relation to the audit plan, together with any emerging national issues and developments that might be relevant to the Borough Council.  Members were asked to consider the report.

7.2             Members were informed that Grant Thornton had completed the interim work in relation to the accounts audit and had identified the detailed work for its visit to the Borough Council which would take place once the accounts had been finalised.  In terms of emerging issues, Grant Thornton had published guidance to assist local authority Audit Committee Members in understanding the authority’s financial statements so that they could make a judgement as to whether the accounts should be approved.  Based on the queries received from practitioners and auditors, Grant Thornton had also compiled a list of the top issues to consider during the closure of the 2013/14 accounts, set out at Pages No. 16-17 of the report.  Page No. 18 referred to a bulletin which had been issued by CIPFA’s Local Authority Accounting Panel in relation to the accounts which raised a number of issues.  Reference was also made to the Audit Commission briefing, based on date from its value for money profile, which talked about the cost of waste in terms of collection and disposal, as well as Government guidance on the costs and benefits of local Government partnerships.  Grant Thornton published an annual report in each of the health, local government and police sectors and in 2014 it had issued a publication on local governance entitled ‘Working in Tandem’, a copy of which had been sent to the Chief Executive and the Finance and Asset Management Group Manager.  Grant Thornton was also involve in organising and supporting events for local government clients and the final page of the report set out examples of such events.

7.3             A Member indicated, and it was noted, that there was a typographical error at Page No. 16, bullet point 3, as follows: ‘Is your programme of revaluations is sufficiently up to date…’  A Member went on to raise concern that no explanation had been provided for the changes to the Borough Council external audit team.  The Audit Manager explained that a former Grant Thornton employee was now working for Tewkesbury Borough Council in the Finance department and, as such, there was a requirement under ethical and independent guidance to consider whether the rest of the audit team had a conflict of interest.  He explained that himself and the Engagement Lead, Peter Barber, had worked with that particular employee for over 10 years and the guidance recommended that the audit team should be changed in order to ensure that there was no perceived conflict.  Alex Walling had replaced Peter Barber as the Engagement Lead and Peter Smith would also be replaced as Audit Manager, however, as his replacement did not take up her post until the end of the month, he was able to represent Grant Thornton at the current meeting on the basis that he would have no continuing involvement with the detail of the audit and he had not been involved for the past few weeks.  The Member went on to indicate that this had raised a potential issue about the approach taken in relation to the management of the engagement process between Grant Thornton and the Council and he sought clarification as to how interaction took place and Grant Thornton’s approach to dealing with Members and the authority.  The Borough Solicitor indicated that it was her understanding that the representatives from Grant Thornton met regularly with the S151 Officer and the Chief Executive.  She agreed that the Audit Committee should have been notified of the changes in representation but felt that it should be borne in mind that it was right and proper for the Chairman of the Audit Committee to have a direct relationship with Grant Thornton and an entitlement to meet with representatives without Officers present, although she stressed that this was not what had happened in this instance.  The Audit Manager provided assurance that Grant Thornton met with Officers on a quarterly basis as had been considered appropriate when Grant Thornton had first been appointed as external auditors; Grant Thornton would be willing to meet more, or less, regularly to suit the needs of the Council.  Grant Thornton also met with Audit Committees outside of the formal Committee setting, as they did with other clients, and he indicated that the representatives would be happy to do whatever was best for the Council.  The Member recognised that this was the case, however, he felt that actually reaching an appropriate level of respect and interaction with Members was a different thing entirely and nobody should feel as though they were being bypassed in any way.  A Member noted that the report on the Review of Effectiveness of Internal Audit, due to be considered later on the Agenda, provided further information about how the relationship worked and communication included monthly Lead Member updates.  In addition the previous Audit Committee Chairman had met regularly with Grant Thornton and the Policy and Performance Group Manager for personal briefings and he had relayed any important messages to the Committee prior to its next meeting.  The Member who had raised the concern indicated that he had made a general comment so that steps were put in place to ensure that the relationship was not a ‘de facto’ one and that Members were shown an appropriate level of respect.  He was keen to stress that, just because high level meetings were held on a regular basis, it should not be taken as read that Members understood, or that they would be happy with the communication about a decision.

7.4             Having considered the information provided and views expressed it was

RESOLVED          That the Grant Thornton progress report be NOTED.