Agenda item

To consider the external auditors’ fee letter in relation to the audit work to be undertaken during 2017/18. 

9.1             Attention was drawn to Grant Thornton’s fee letter, circulated at Pages No. 33-36, which set out the proposed fee for 2017/18, together with the scope and timing, for the work.  Members were asked to consider the fee letter.

9.2             The Audit Manager from Grant Thornton explained that the scale fee for 2017/18 was £44,921 - the same as the previous year and a reduction on the 2015/16 fee.  The fee covered audit of the Council’s financial statements; the value for money conclusion; and work on the whole government accounts return.  The timetable had changed, with reporting dates being brought forward, and this was outlined at Page No. 35.  It was noted that the key members of the audit team for 2017/18 were due to stay the same at this stage.  Particular attention was drawn to the fact that the housing benefit certification fee was to be confirmed pending formal notification of the Public Sector Audit Appointments (PSAA) established grant fee for 2017/18 and an update would be provided at the September Audit Committee meeting.

9.3             A Member raised concern that there should be some consistency in terms of the audit team and he questioned whether it was possible to ensure that at least one team member remained the same.  The Audit Manager from Grant Thornton provided assurance that every effort was made to keep the same team together as this helped with continuity and, as far as he was aware, there were no plans to change the team for the forthcoming year.  In response to a query as to whether there was any scope to reduce the external audit fee, the Head of Finance and Asset Management indicated that a report had previously been brought to the Committee regarding the appointment of external auditors for the forthcoming financial year.  At that time, the Audit Committee had considered three broad options and had recommended to Council that it opt-in to PSAA - the Sector Led Body for the independent appointment of auditors for principal authorities in England - from 2018/19.  This option had been approved by the Council in January and the tender process had now been completed with auditors appointed via lots.  Grant Thornton had won the biggest lot and had been awarded 40% of the work, followed by Ernst and Young with 30%.  Tewkesbury Borough Council would find out who had been appointed as its external auditor in the autumn.  It was noted that the fee would be reduced by around 18% under the new contract.  A Member sought more information as to how the external auditors were appointed and the Head of Finance and Asset Management clarified that the Council could have opted to make its own appointment; however, Officers believed that the most cost effective and efficient route was to opt-in to the Sector Led Body arrangement which 97% of local authorities had done.  PSAA took into account any feedback from local authorities or particular circumstances, e.g. where there were shared arrangements with other local authorities, and appointed individual audit contracts for each authority.  The lots were put together by PSAA and, following the tender process, Grant Thornton had been awarded 40% of the work.  A report would be brought to the Audit Committee to appoint the recommended external auditor for the current financial year (2017/18), with the change coming into effect in 2018/19.

9.4             Having considered the information provided, it was

RESOLVED          That the Grant Thornton Fees Letter 2017/18 be NOTED.