Agenda item

Report No: PAS/WS/20/007

The Committees received Report No: PAS/WS/20/007, from EY, the Council’s appointed external auditors, who were required to provide an audit plan, attached at Appendix A, which covered the work they planned to perform in order to provide the Council with:

-      An opinion on whether the financial statements of the Council gave a true and fair view of the financial position as at 31 March 2020 and of the income and expenditure for the year then ended; and

-      A conclusion on the Council’s arrangements to secure economy, efficiency and effectiveness (value for money).

Mark Hodgson, Associate Partner from EY presented the report, which summarised EY’s assessment of the key risks which drive the development of an effective audit for the Council and outlined their planned audit strategy in response to those risks.  Officers would be working with EY over the coming months to ensure that these risks were managed and where possible to come to an agreement over their treatment prior to issuing of the Annual Results Report, and Audit Opinion.    

He drew Members’ attention to the summary of audit risks set out on pages 5 – 6; risks relating to property, plant and equipment and pensions, set out on page 15; value for money risk over the term of the Council’s medium-term financial strategy and the financial impact of Covid-19; and the planned and scale fees set by the Public Sector Audit Appointments Ltd for carrying out the work for 2019/2020, as set out on page 37 of the Audit Plan (Appendix A).  EY were currently in discussions with management to agree the planned fee for the year end.

It was reported that the Accounts and Audit Regulations 2015 had introduced revised statutory deadlines, with draft accounts needing to be prepared by 31 May and the publication of the accounts by 31 July.  However, these deadlines had been relaxed for the 2019-2020 accounts due to the impact of the Covid-19 pandemic, with draft accounts now needing to be completed by 31 August, and audited accounts to be published by 30 November.

Due to the resourcing issues throughout the sector as well as the increased complexity around local authority accounts work, EY would not be in a position to issue the Audit Results Report by the end of July, as in previous years.  Instead, EY had set out a provisional phasing plan to ensure that they were able to deliver both the 2019-2020 statement of accounts work and the housing benefits subsidy work which EY were responsible for.  That phasing plan would take audit work for the 2019-2020 statement of accounts right up to September/October 2020, and it was expected that the Audit Results Report would be presented to the Performance and Audit Scrutiny Committee in September 2020.

The Committee considered the report in detail and asked questions to which responses were provided.  Discussions were held on the valuation of the solar farm; the procedure around setting and negotiating audit fees and whether these would go down in 2020-2021 following the creation of West Suffolk Council; and the pensions deficit and where monies were invested.

In response to a question raised regarding the pensions deficit Mark Hodgson explained the pension liability sat within the West Suffolk Council balance sheet.  The pension scheme was 99% funded, with a 1% shortfall. Suffolk County Council managed the pensions fund, which had a Pensions Committee.  Each District/Borough Council was represented on the Committee and a Pensions Strategy was in place.

In response to a questions raised as to when the revised new valuation on the solar farm would be made available, officers explained that the council was still working through the draft accounts for 2019-2020, which would be published next month and would include the solar farm valuation.

There being no decision required, the Committee noted the External Audit Plan and Fees for 2019-2020, attached at Appendix A to Report No: PAS/WS/20/007