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MAIDSTONE BOROUGH COUNCIL

AUDIT COMMITTEE

7 JUNE 2010

REPORT OF THE CHIEF EXECUTIVE

Report prepared by David Edwards 

1.           AUDIT COMMISSION’S AUDIT AND INSPECTION FEE LETTER

1.1        Issue for Decision

1.1.1   To consider and note the Audit Commission’s Fee Letter for 2010/11.

1.2        Recommendation of the Chief Executive

1.2.1   That the Audit Committee considers and notes the Audit Commission’s Fee Letter for 2010/11.

1.3        Reasons for Recommendation

1.3.1 The Audit Commission has reviewed the approach to their audit work and attached at Appendix A is the Fee Letter for 2010/11 as submitted by the Council’s External Auditors.  This includes the Annual Audit and Inspection work for 2010/11.  The Letter includes details of the work that the auditors will be carrying out during the year.  The work plan has been the subject of informal discussions with Senior Officers and the Leader.  The work includes a continuation of the auditor’s assessments of Use of Resources and Value for Money, the financial statements and the accounts for which a separate plan will be published later.

1.3.2 The Letter details the outputs to be provided from the work of the External Auditors and the audit and inspection fee required for the provision of work.  The proposed fee required for the provision of this work can be accommodated within the Council’s budget.  Members will note that although the total audit and inspection fee has increased by 6.9%, this will be offset by a one-off payment from the Commission in 2010/11, as some of their balances are being returned to authorities. The actual fee will therefore only increase by approximately £2k, a 1.5% increase.

1.3.3 In 2010/11 the fee will include additional work on the International Financial Reporting Standard (IFRS) and assessing the Council’s partnership working arrangements.

1.3.4 It is anticipated that the External Auditors will present their Letter to the Audit Committee and be available to answer questions and receive comments from Members.

1.3.4 The proposed work plan Letter will also be considered by Cabinet at its meeting on 14 July 2010.

1.4        Alternative Action and why not Recommended

1.4.1   The Fee Letter is produced under the statutory requirements governing External Audit and no alternatives are considered.  Members may request further work to be done by the External Auditors, at a cost, but this is considered unnecessary and is not recommended for 2010/11.

1.5        Impact on Corporate Objectives

1.5.1   The Fee Letter covers the corporate wellbeing of the council and is an integral part of the Corporate Governance arrangements of the council.

1.6        Risk Management

1.6.1   The work of the External Auditors is an essential element of the Corporate Governance arrangement of the council.  The elements of the arrangements audited are subject to individual risk assessments.

1.7        Other Implications

1.7.1    

1.7.2   The financial implications are in the body of the report.

1.8        Background Documents

IS THIS A KEY DECISION REPORT? X     Yes                                               No     If yes, when did it first appear in the Forward Plan?   ..     This is a Key Decision because: ..   .       Wards/Parishes affected: ..   ..

1.8.1  None