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Agenda item

External Auditor's Audit Plan

To consider the external auditor’s Audit Plan 2021/22.

Minutes:

8.1            Attention was drawn to the external auditor’s audit plan for the year ending 31 March 2022, circulated at Pages No. 22-46.  Members were asked to consider the information provided.

8.2            The representative from Grant Thornton advised that most things within the report would be familiar to Members.  It had been intended for the year end audit to be undertaken in July; however, due to issues with resourcing and a change in staff structure at Grant Thornton, this would now move to September.  He went on to advise that the significant risks identified were revenue fraud and expenditure fraud – both of which had been rebutted - management override of controls - this was a presumed risk every year – valuation of land and buildings assets and valuation of the pension fund net liability.  Page No. 39 of the report set out that two risks of significant weaknesses in the Council’s value for money arrangements had been identified; the first related to the Council’s arrangements for securing financial sustainability in the medium term.  Whilst the Council set a balanced budget in-year, there would be challenges going forward and, although it was recognised there was a lack of uncertainty with regard to financial settlements and funding, there was no updated Medium Term Financial Strategy covering the year 2026/27 as would normally be expected – this played into the risk of significant weakness.  The second risk related to pervasive and significant weaknesses in internal controls and the representative from Grant Thornton explained that, in 2020/21, the Internal Audit function had been redeployed to support other Council functions which had led to a limitation of scope resulting from non-completion of internal audit work and a lack of assurance over the operation of the Council’s internal controls.  The work of Internal Audit during 2021/22 would be reviewed to establish how the position had changed and how the “catch-up” on the intended programme of work for 2020/21 was progressing.  Page No. 40 of the report provided an overview of the external audit team and reflected that the year end audit would now take place during the autumn with the statutory deadline in November.  The audit fee for 2021/22 was set out at Page No. 41 of the report with the proposed fee being £62,565 and a breakdown of that figure was included at Page No. 42.

8.3            With regard to the audit fee breakdown, a Member questioned why £5,000 was included for remote working.  The representative from Grant Thornton advised that, over the last two years during the COVID pandemic, remote working had generally caused the audit to be slower and, in 2021, there were still audits outstanding from the prior year – CIPFA had reported around 9% of audits had been completed by the end of September 2021.  It was anticipated that the team would still be working remotely going forward and there would be an element of things taking longer than they had in previous years, so additional expenditure had been included upfront to account for that.  The Member felt it appeared that the Council would be paying additional costs because Grant Thornton chose to work remotely.  In response, the representative from Grant Thornton explained that this would be a decision made in connection with the individual authority; if arrangements could be made for external auditors to be on site, a discussion could take place around whether that charge should apply.  The Head of Finance and Asset Management advised that, once the timing of the audit was known, consideration would be given as to whether Grant Thornton could be accommodated on site – the key factor was ensuring Tewkesbury Borough Council staff were available.  If it could be accommodated, that element of the fee could be eliminated for the Council.

8.4            It was

RESOLVED           That the External Auditor’s Audit Plan be NOTED.

Supporting documents: