External Audit Fee Letter 2016-17

Audit, Governance & Standards

11 July 2016

Is the final decision on the recommendations in this report to be made at this meeting?

Yes

 

External Audit Fee Letter 2016-17

 

Final Decision-Maker

Audit, Governance & Standards Committee

Lead Director or Head of Service

Mark Green, Director of Finance & Business Improvement

Lead Officer and Report Author

Ellie Dunnet, Chief Accountant

Classification

Non-exempt

Wards affected

N/A

 

 

This report makes the following recommendations to the final decision-maker:

1.    That the committee notes the proposed audit fee of £61,893 for 2016-17 audit work to be undertaken by Grant Thornton.

 

 

This report relates to the following corporate priorities:

         Keeping Maidstone Borough an attractive place for all

         Securing a successful economy for Maidstone Borough

The council has a statutory obligation to have its accounts externally audited, and this process underpins the councilís ability to demonstrate accountability to taxpayers.

 

 

Timetable

Meeting

Date

Audit, Governance & Standards Committee

11 July 2016



External Audit Fee Letter 2016-17

 

 

1.                        PURPOSE OF REPORT AND EXECUTIVE SUMMARY

 

1.1      This report communicates the proposed external audit fee for 2016-17, as set by Public Sector Audit Appointments Ltd under transitional arrangements arising from the introduction of the Local Audit and Accountability Act 2014.

 

 

 

2.                        INTRODUCTION AND BACKGROUND

 

2.1      The councilís external auditors for 2016-17 are Grant Thornton as in previous years.† Following the closure of the Audit Commission, responsibility for overseeing the current audit contract and setting fees from 2016-17 onwards has been passed to Public Sector Audit Appointments Ltd.

 

2.2      The letter from Grant Thornton attached at Appendix I sets out the details of the 2016-17 fee including the scope and timing of planned audit work for the forthcoming year.

 

 

3.                        AVAILABLE OPTIONS

 

3.1         The committee are asked to note this report.† There are no alternative options as the council has a statutory obligation to have its accounts externally audited.

 

 

 

4.         PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

4.1         As stated elsewhere in this report, the committee are asked to note the proposed audit fee for 2016-17.

 

4.2      The main audit fee for the financial statements audit and value for money conclusion for 2016-17 is £50,475, and the indicative fee for grant claim certification work has been set at £11,418 for the certification of the housing benefits subsidy claim.

 

4.3      Scale fees for 2016/17 have been set at the same level as the fees applicable for 2015/16, which were set by the Audit Commission before it closed. Audit fees were reduced in 2015/16 by 25 per cent based on the fees applicable for the previous year, in addition to the 40 per cent reduction in fees from 2012/13. It is currently anticipated that fees will remain at the same level for the remainder of the audit contract, providing there are no significant changes to auditorsí work, and subject to annual review.

 

 

5.        CROSS-CUTTING ISSUES AND IMPLICATIONS

 

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

The council has a statutory obligation to have its accounts externally audited, and this process underpins the councilís ability to demonstrate accountability to taxpayers.

Section 151 Officer

Risk Management

There is risk that the council could incur additional fees if the external auditor identifies significant issues which give rise to additional audit work needing to be undertaken.

Officers will work closely with Grant Thornton throughout the year in order to minimise this risk.

Section 151 Officer & Finance Team

Financial

The proposed 2016-17 audit and grant claim certification fees of £50,475 and £11,418 respectively represent no change from the 2015-16 fees.

Section 151 Officer & Finance Team

Staffing

Not applicable

 

Legal

Not applicable

 

Equality Impact Needs Assessment

Not applicable

 

Environmental/Sustainable Development

Not applicable

 

Community Safety

Not applicable

 

Human Rights Act

Not applicable

 

Procurement

Not applicable

 

Asset Management

Not applicable

 

 

6.         REPORT APPENDICES

 

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

               Appendix I: External Audit Fee Letter 2016-17

 

 

7.         BACKGROUND PAPERS

 

None