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Audit, Governance and Standards Committee

18 January 2021

 

External Auditorís Annual Audit Letter

 

Final Decision-Maker

Audit, Governance and Standards Committee

Lead Head of Service

Mark Green, Director of Finance and Business Improvement

Lead Officer and Report Author

Ellie Dunnet, Head of Finance

Classification

Public

Wards affected

All

 

Executive Summary

 

The Annual Audit Letter attached at Appendix 1 summarises the main findings from the work undertaken by the external auditor for the year ended 31 March 2020, and brings the audit process for 2019/20 to a close.

 

The Audit Findings Report attached at Appendix 2 is an updated version of the report detailing the auditorís key findings and conclusions in relation to the 2019/20 audit, which has been considered at previous meetings of this committee.

 

Officers from Grant Thornton will be in attendance to present their reports and respond to questions.

 

 

Purpose of Report

 

The committee is asked to note the report.

 

 

This report makes the following recommendations to this Committee:

1.   That the Annual Audit Letter, attached at Appendix 1 be noted.

2.   That the updated Audit Findings Report, attached at Appendix 2 be noted.

 

 

Timetable

Meeting

Date

Audit, Governance and Standards Committee

18 January 2021



External Auditorís Annual Audit Letter

 

1.       CROSS-CUTTING ISSUES AND IMPLICATIONS

 

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

We do not expect the recommendations will by themselves materially affect achievement of corporate priorities. However, they will support the Councilís overall achievement of its aims in demonstrating accountability and value for money.

Head of Finance

Cross Cutting Objectives

There is no specific implication, however sound financial management does support the delivery of the Councilís cross cutting objectives.

Head of Finance

Risk Management

This is detailed within section 5.

 

Head of Finance

Financial

As detailed in Appendices 1 & 2, the proposed audit fee for 2019/20 has increased to £53,316, which represents a 15% increase on the previously agreed fee of £46,366 and a 37% increase on the Public Sector Audit Appointments Ltd (PSAA) scale fee of £38,866.† This increase remains subject to discussion with Grant Thornton and PSAA approval.

 

Head of Finance

Staffing

None identified.

 

Head of Finance

Legal

Under section 151 of the Local Government Act (LGA 1972), the Section 151 Officer has

statutory duties in relation to the financial

administration and stewardship of the authority, including advising on the corporate financial position and providing financial information. It is a function of the Audit, Governance and Standards Committee to review and approve the annual statement of accounts and to consider if appropriate accounting policies have been followed and whether there are concerns arising from the financial statements or from the audit that need to be brought to the attention of the Policy and Resources Committee or Council.

MKLS

Privacy and Data Protection

There are no specific privacy or data protection issues to address.

MKLS

Equalities

No implications identified.

Head of Finance

Public Health

 

 

No implications identified.

Head of Finance

Crime and Disorder

No implications identified.

Head of Finance

Procurement

No implications identified.

Head of Finance

 

 

2.††††† INTRODUCTION AND BACKGROUND

 

2.1        The Annual Audit Letter attached at Appendix 1 summarises the main findings from the work undertaken by the external auditor for the year ended 31 March 2020.† The committee has previously considered the Audit Findings.† The updated and final version of this report is attached at Appendix 2.† Representatives from Grant Thornton will attend the meeting to present their reports and respond to any questions which committee members may have.

2.2        It is recommended that these documents are considered by the committee in accordance with the terms of reference detailed within the councilís Constitution.

2.3        The Annual Audit Letter represents the conclusion of the 2019/20 audit by confirming that:

 

-      The external auditor gave an unqualified opinion on the Council's accounts on 30 November 2020; and

-      The external auditor is satisfied that in all significant respects the Council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2020.

 

2.4        The opinion on the financial statements included an emphasis of matter paragraph in respect of the uncertainty over valuations of the Council's land and buildings and the property assets of its pension fund given the Coronavirus pandemic. This did not affect the auditorís opinion that the statements give a true and fair view of the Council's financial position and its income and expenditure for the year.

 

2.5        The reports detail a proposed increase in the fee for 2019/20 external audit work to £53,316.† Scale fees are set by Public Sector Audit Appointment Ltd (PSAA).† The scale fee for Maidstone Borough Council was set at £38,866 for 2019/20.† The committee was notified of an increase in the scale fee to £46,366 at its meeting on 16 March 2020.† The reasons for increasing the audit fee at this time were additional expectations being placed on audit firms by the Financial Reporting Council and the increased workload arising from the introduction of new accounting standards. A further increase of 15% is proposed at this time due to the additional burdens of Covid 19 and the work of the external auditor to investigate and resolve the prior period adjustment in the 2019/20 financial statements.† It should be noted that this remains subject to discussion with Grant Thornton and the agreement of PSAA.

 

 

3.           AVAILABLE OPTIONS

 

3.1         These reports are for information and the committee is asked to note their contents.

 

 

4.           PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

4.1        The committee is asked to note the external auditorís reports attached as appendices 1 and 2.

 

 

5.           RISK

5.1        This report is presented for information only and has no risk management implications.

 

 

6.           CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

 

6.1        No consultation has been undertaken in relation to this agenda item.

 

 

 

7.           REPORT APPENDICES

 

The following documents are to be published with this report and form part of the report:

         Appendix 1 - External Auditorís Annual Audit Letter 2019-20

         Appendix 2 - Updated Audit Findings Report 2019-20

 

 

8.           BACKGROUND PAPERS

 

None