The Committee considered the report of the Head of Finance and Customer Services setting out details of the proposed reduction in external audit fees for the 2012/13 audit.  It was noted that the Audit Commission no longer carried out public sector external audits and, following a tender process, Grant Thornton had been appointed as the Council’s external auditors for the next five years.  The Council’s scale audit fee for 2012/13 had been set at £66,400 which, compared to the audit fee of £110,666 for 2011/12, represented a reduction of 40%.  The composite indicative fee for grant certification work had been set at £17,600.

In response to questions by Members, the representatives of Grant Thornton confirmed that the firm was committed to providing the Council with a high quality external audit service.  The reduction in the scale audit fee was mainly due to the reduction in Audit Commission overheads.  The Officers acknowledged that there was a risk of additional fees being incurred should the external audit process identify any extra work that needed to be done.  It was accepted that it was necessary to take a more robust approach to improving the quality of the draft financial statements and supporting working papers if the Council was to avoid the possibility of incurring additional fees, and, in this connection, action was being taken to ensure that the Finance Team has the necessary professional skills and an up to date knowledge of developments in financial reporting arrangements to carry out the work.  In addition, the offer made by Grant Thornton to meet with the Team to explain their expectations of what was required had been accepted.

RESOLVED:  That the proposed reduction in audit fees for the 2012/13 audit and the action being taken to mitigate the risk of additional fees being incurred be noted.