Agenda item

The Committee is requested to consider and note Ernst & Young LLP’s Audit

Planning Report for the year ending 31 March 2021.

The Chairman invited Mr Suter from Ernst and Young (E&Y) to introduce the report.

Mr Suter explained the purpose of the annual audit letter was to provide a summary which was less technical, and therefore offered greater accessibility, bringing into the public domain, areas and findings previously reported following the approval of the results report and statements of accounts.

Mr Suter drew Members’ attention to key aspects within the summary:

·         The impact of Covid-19 pandemic and response to this situation.

·         Provision of an unqualified audit opinion on the Councils’ financial statement and value for money conclusion.

·         Confirmation of certifying completeness of the audit and that it had been closed for 2019/2020.

·         Audit fees as part of the closing procedures and after the presentation the fees being proposed would be submitted to the Public Sector Audit Appointments (PSAA) for their final confirmation and review.

In response to questions, the following was advised:

On the question of whether the wording in the report implied the Council were withholding information, when the issue had in fact been due to Ministry for Housing, Communities and Local Government not providing the details of forthcoming rebates with regards to Covid-19, Mr Suter responded that ‘going-concern’ as testament could be made by management dependent upon the available information and not that there was a deliberate withholding.  Mr Suter added that the previous year had been unusual, and disclosures would be required to be more extensive.

With regards to the 2018/19 comparator figures of £32,955k in relation to Note 25 Grant Income - Mr Suter advised that in previous year’s accounts, the Council had not included elements of the housing benefit subsidy in the notes.  EY has asked for its inclusion this year, and to restate the prior year comparison, to provide a year on year comparison.

On the matter of the resolution of the difference of opinion in relation to the fees, Mr Suter explained that all fees whether or not they had been agreed had to be submitted to PSAA, the body which appointed E&Y, when the Council opted into the contract a few years previously.  The PSAA would have the final decision and will be in contact with both E&Y and the Council to gather information.  Mr Suter confirmed that the figures were included within the report, the additional work undertaken and revised scale of fees proposed.  Mr Suter also confirmed the full report was available via agendas, minutes and the Council’s website. 

On the question of the Council as a ‘going concern’, Mr Suter advised whilst the values within the accounts require the ‘going concern’ basis of accounting in order that they are complied, E&Y had questioned whether the Council would be able to maintain the current level of services within the audit report, as this information was considered important for members of the public.

Mr Suter explained that the scale fee rebasing element was E&Y’s response to PSAA and discussion of changes within audit fees and to ensure the fees were representative of the amount of work undertaken and the level of risk within local authority’s accounts and related work year on year.  The Committee had previously raised questions when E&Y had presented their audit plans, as to whether the work could be completed for the audit scale fee which, although agreed, Mr Suter confirmed that E&Y would prefer to be paid for the work undertaken.  In 2020 PSAA had asked EY to calculate the amount of additional work undertaken over time due to the changes in regulations and standards, for which E&Y wished to be paid for the conduct of the audit.

Mr Ward advised that the audit process this year was more difficult for the Council’s officers and the external audit team, and assured Members that the additional audit fees had been examined in detail with Mr Suter and challenged, and whilst above the original proposed fee one element was removed following Mr Ward’s review.

The Chairman thanked Mr Suter for the work completed.

Resolved

That the report be noted.