External Auditor's Annual Audit Letter (Year Ended 31 March 2019)
Ms Elizabeth Jackson of Grant Thornton presented the External Auditor’s Annual Audit Letter summarising the key findings arising from the work undertaken by the External Auditor for the year ended 31 March 2019 and concluding the audit process for 2018/19. It was noted that:
· The External Auditor gave an unqualified opinion on the Council’s 2018/19 Statement of Accounts on 16 August 2019; and
· The External Auditor was 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 2019.
During her presentation, Ms Jackson made specific reference to the delay in issuing the audit opinion. She explained that:
· Grant Thornton alongside all other audit firms struggled to deliver the audit opinion on time this year and over 40% of local authority audits nationally were not signed off by the end of July which was the target date for auditors to give their opinions. Whilst the Borough Council had a statutory responsibility to publish its accounts whether they were audited or not by 31 July 2019, it was not a statutory requirement for external auditors to meet that deadline.
· Grant Thornton had resourcing issues due to staff shortages and sickness. The Director of Finance and Business Improvement was informed that the firm did not have a team to deliver the audit by the end of July and that other Kent audits were affected.
· When the External Audit team came on site in the middle of July to undertake the work, a number of amendments were required to the accounts. As the statutory auditor responsible for signing the audit opinion, she did not have all of the evidence required to enable her to sign off the accounts as true, fair and correct until 16 August 2019 when she issued the unqualified audit opinion. It would reflect on her professional reputation if she had signed off the accounts before completing all the work required.
· She understood that Members and Officers were very disappointed that the deadline was not met and arrangements had been put in place already for working differently next year.
· The new procurement process for local authority audit had resulted in a reduction in audit fees and with that a reduction in the number of days available for carrying out the audit. If there was a tendering exercise now, with the current regulations and workload, Grant Thornton would not be tendering for audits as they were not deliverable. She would not wish to sign off the audit without the right level of evidence.
In response to questions, Ms Jackson explained that:
· To an extent, the problems experienced were specific to the public sector and, particularly, local government where over 90% of audited bodies chose to follow the Public Sector Audit Appointments route for the procurement of audit services. Whether or not this had been successful had still to be determined.
· In terms of the additional resource required to sign off the accounts on time with an end result that the External Auditor was comfortable with, another person for ten days would have helped to deliver the audit. Discussions were taking place with the Finance Team about a different approach to the audit next year.
· The Financial Reporting Council, which regulates auditors, was also reviewing the overall audit environment.
· The External Auditor did not have staff with the appropriate experience and specialist knowledge available to complete the audit in July. They came in August when other audits had been completed.
RESOLVED: That the External Auditor’s Annual Audit Letter for the year ended 31 March 2019, attached as Appendix 1 to the report of the Interim Head of Finance, be noted.
- Annual Audit Letter (YE 31-03-19) Covering Report, item 54. PDF 58 KB View as HTML (54./1) 43 KB
- Maidstone BC 2018-19 Annual Audit Letter, item 54. PDF 481 KB