To consider the external auditor’s Audit Plan 2022/23. 

8.1            Attention was drawn Grant Thornton’s audit plan 2022/23, circulated at Pages No. 20-29, which provided an overview of the planned scope and timing of the statutory audit of Tewkesbury Borough Council.  Members were asked to consider the report.

8.2            The representative from Grant Thornton advised that this was the last year of Grant Thornton’s contract as external auditor for Tewkesbury Borough Council; as previously reported to the Audit and Governance Committee, Bishop Fleming would take over as the external auditor next year.  The report set out the programme for the 2022/23 financial audit with the planning work having been completed in February/March 2023 and the final audit stage taking place now with a view to reporting back to the Committee in September.  The significant risks identified were outlined at Pages No. 26-28 of the report and, as set out at Page No. 30 of the report, materiality at the planning stage equated to 2% of the Council’s gross expenditure but the assessment would be kept under review throughout the audit process.  It was noted that the risk assessment regarding arrangements to secure value for money in 2022/23 was not finished as Grant Thornton was yet to complete the auditor’s annual report for 2021/22 and Members were informed it was planned to report on both 2021/22 and 2022/23 years following its publication.  It was anticipated this would be brought to the Audit and Governance Committee in December 2023 but, assurance was provided that, if it could be done sooner, it may be possible to bring it to the meeting in September.  The audit fees were set out at Pages No. 35-36 of the report and it was noted that the fee for the housing benefit audit was currently being quoted by the central grants team and would be discussed with the Council’s Section 151 Officer shortly.

8.3            A Member drew attention to ISA240 and the presumed risk that revenue may be misstated due to the improper recognition of revenue and asked for a comment as to what extent that would impact on this years audit in comparison to previous years in terms of the scope of work.  In response, the representative from Grant Thornton advised that the scale fee had been set a number of years ago by the Public Sector Audit Appointments and the breakdown at Page No. 36 of the report set out the scale fee and the various changes over the last few years which had resulted in the current fee.  Whilst ISA240 had impacted in terms of the requirements and responsibilities of Grant Thornton, there was no specific impact in terms of the 2022/23 fee.  The Member noted that £3,000 was allocated to increased audit requirements of revised ISA315/240 and he asked what difference there would be in terms of the work performed in order to understand why it cost more, for instance, was there more testing.  The representative from Grant Thornton explained that the most significant impact was ISA315 in relation to IT general controls which required a much more detailed assessment; IT had been more prominent over the last few years but ISA315 was a step change.  ISA240 dealt with the auditor’s responsibilities relating to fraud in an audit of financial statements and the standard gave more prominence to the risk of fraud in the planning process.  It was anticipated that £3,000 would capture all of the work required regarding both ISA315 and ISA240; however, as set out in the note at Page No. 34 of the report, the Council would be notified should any additional work be required in relation to ISA240 which would impact on the fee.

8.4            It was

RESOLVED           That the external auditor’s Audit Plan 2022/23 be NOTED.