Agenda item

Report number: PAS/WS/21/005

[Councillor Peter Thompson joined the meeting at 5.07pm during the consideration of this item].

The Committees received Report No: PAS/WS/21/005, 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 2021 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; pages 15 – 17 relating to new Covid-19 grant income, omission or understatement of NDR appeals provisions; group account consolidation; collection fund accounting and recoverability receivables (bad debt provision); page 18 relating to the materiality level which remained the same as last year at £1.991m and would be updated in July/August 2021 and pages 31 to 33 relating to value for money.  The main change to the value for money conclusion was that EY would only need to report by exception.  

It was reported that the Ministry of Housing, Communities and Local Government had put in place the Accounts and Audit (Amendments) Regulations 2021, that extend the statutory deadlines for the accounts relating to the financial years 2020 to 2021, and 2021 to 2022.  Draft accounts needed to be prepared by 31 July instead of 31 May and the publication of the audited accounts moved from 31 July to 30 September.

Due to 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 September.  Instead, they had set out a provision phasing plan to ensure that they were able to deliver both the 2020 to 2021 statement of accounts work and the housing benefits subsidy work they were responsible for.  It was expected that the Audit Results Report would be presented to the Performance and Audit Scrutiny Committee in November 2021.

The Committee considered the report and asked questions to which responses were provided.  In particular members sought clarification on the risks associated with “incorrect capitalisation of revenue expenditure” set out on page 15 of the report and “omission or understatement of NDR appeals provisions” on page 16 to which Mark Hodgson provided responses.

There being no decision required, the Committee noted the Provisional Audit Plan and Fees for 2020-2021, attached at Appendix A to Report No: PAS/WS/21/005.