Agenda item

To consider any Part 1 business accepted by the Chair as urgent.

In accordance with Rule 37(a), the Chair had agreed that the following matters be deemed urgent and considered at the meeting:

a)     Audit Planning Report – Year Ended 31 March 2018

b)     External Audit Update Report – March 2018

c)      Local Government Audit Committee Briefing

It was noted that the External Audit Plan report should have been included within the original agenda despatched for the meeting but, given that notice and receipt of the report (and the other two listed above) by Constitutional Services was after the date of despatch of the original agenda, the Chair was contacted to seek her approval to consider the matters at this meeting..

Accordingly, the Chair agreed that the following matters be deemed as urgent as to not present the External Audit 17-18 Plan and progress report to this meeting, would result in its consideration being delayed until June 2018, at which point this would be  significantly late and beyond when the Council had to issue draft 17-18 accounts for audit.

a)     Audit Planning Report – Year Ended 31 March 2018

Neil Harris, the Council’s External Auditor (Ernst and Young LLP) (EY), introduced the report, which set out how EY intended to carry out its responsibilities as the Council’s Auditor and to provide the Committee with a basis to review EY’s proposed audit approach and scope for the 2017/18 audit, in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office’s 2015 Code of Audit Practice, the Statement of Responsibilities issued by Public Sector Audit Appointments (PSAA) Ltd., auditing standards and other professional requirements.  The attached Plan set out to ensure that EY’s audit was aligned with the Committee’s service expectations and summarised EY’s initial assessment of the key risks driving the development of an effective audit for the Council, and outlined EY’s planned audit strategy in response to those risks.

Mr Harris addressed a number of specific areas, including:

·         “Management override” – susceptibility where managers had to make estimations

·         Capitalisation of revenue spend

·         Inherent risks e.g. actuaries

·         Pension liabilities – any assumptions made in accounts

·         Changes in Audit Strategy this year – increase in commercialisation activity in the Council

Mr Harris responded to Members’ questions in relation to:

·         The accuracy of the statement under “details” in relation to achievement of savings needed over the medium-term, as detailed at Page 6 to the report;

·         “Performance materiality” – an important issue for Members to be aware of

·         Earlier deadline for production of financial statements

·         Better ways of holding each other to account

·         Publication of Annual Audit Letter in September 2018 – was this correct?

·         Total fees listed on Page 30 (£55,841) – was this correct?

·         Reference to Rochford District Council (should have referenced Stevenage Borough Council)

·         Commercialisation – was this an increasing area?

b)     External Audit Update Report – March 2018

With reference to Minute No.4 to the minutes of the Audit Committee held on 5 February 2018, Mr Harris introduced the report, which summarised the work EY had undertaken to date and their plans for the remainder of the 2017/18 year.  The purpose of the report was to provide the Committee with an overview of the stage EY had reached in its 2017/18 audit and ensure that EY’s audit was aligned with the Committee’s service expectations.

Mr Harris said that the report set out where EY was with the accounts and value for money and that there were no significant concerns.  It was noted that value for money considerations would be fluid as information was awaited on the Council’s SG1 redevelopment proposals.

c)      Local Government Audit Committee Briefing

The Committee considered the briefing, which covered issues that may have an impact on the Council, the local government sector and the audits that EY undertook.  It was noted that the briefings brought together not only technical issues relevant to the local government sector but wider matters of potential interest to the Council.

It was RESOLVED that all of the above reports, be noted.