Alison Broom

Chief Executive

Maidstone Borough Council

Maidstone House

King Street

Maidstone

Kent  ME15 6JQ

9 November 2012

Dear Alison

Planned audit fee for 2012/13

We are delighted to have been appointed by the Audit Commission as auditors to the Council and look forward to providing you with a high quality external audit service for at least the next five years. We look forward to developing our relationship with you over the coming months, ensuring that you receive the quality of external audit you expect and have access to a broad range of specialist skills where you would like our support.

The Audit Commission has set its proposed work programme and scales of fees for 2012/13. In this letter we set out details of the audit fee for the Council along with the scope and timing of our work and details of our team.

Scale fee

The Audit Commission defines the scale audit fee as “the fee required by auditors to carry out the work necessary to meet their statutory responsibilities in accordance with the Code of Audit Practice. It represents the best estimate of the fee required to complete an audit where the audited body has no significant audit risks and it has in place a sound control environment that ensures the auditor is provided with complete and materially accurate financial statements with supporting working papers within agreed timeframes.”

For 2012/13, the Commission has independently set the scale fee for all bodies. The Council's scale fee for 2012/13 is £66,400 which compares to the audit fee of £110,666 for 2011/12, a reduction of 40%.

Further details of the work programme and individual scale fees for all audited bodies are set out on the Audit Commission’s website at:  www.audit-commission.gov.uk/scaleoffees1213. 

The audit planning process for 2012/13, including the risk assessment, will continue as the year progresses and fees will be reviewed and updated as necessary as our work progresses.

Scope of the audit fee

Our fee is based on the risk based approach to audit planning as set out in the Code of Audit Practice and work mandated by the Audit Commission for 2012/13. It covers:

·     our audit of your financial statements

·     our work to reach a conclusion on the economy, efficiency and effectiveness in your use of resources (the value for money conclusion)

·     our work on your whole of government accounts return.

Value for money conclusion

Under the Audit Commission Act, we must be satisfied that the Council has adequate  arrangements in place to secure economy, efficiency and effectiveness in its use of resources, focusing on the arrangements for:

·     securing financial resilience; and

·     prioritising resources within tighter budgets.

We undertake a risk assessment to identify any significant risks which we will need to address before reaching our value for money conclusion. We will assess the Council's financial resilience as part of our work on the VFM conclusion and a separate report of our findings will be provided.

Our planning to date has not identified any additional work which we are required to undertake to support our VFM conclusion. We will continue to assess the Council's arrangements and discuss any additional work required during the year.

Certification of grant claims and returns

The Audit Commission has replaced the previous schedule of hourly rates for certification work with a composite indicative fee. This composite fee, which is set by the Audit Commission,  is based on actual 2010/11 fees adjusted to reflect a reduction in the number of schemes which require auditor certification and incorporating a 40% fee reduction.  The composite indicative fee for grant certification for the Council is £17,600. This assumes that no additional testing will be required.

Billing schedule

Our fees are billed quarterly in advance. Given the timing of our appointment  we will raise a bill for two quarter's in December 2012 with normal quarterly billing thereafter. Our fees will be billed as follows:

Outline audit timetable

We will undertake our audit planning and interim audit procedures in January – February 2013. Upon completion of this phase of our work we will issue our detailed audit plan setting out our findings and details of our audit approach. Our final accounts audit and work on the VFM conclusion will be completed in September 2013 at the same time as our work on the whole of government accounts return.

Our team

The key members of the audit team for 2012/13 remain unchanged:

Additional work

The scale fee excludes any work requested by the Council that we may agree to undertake outside of our Code audit.  Each additional piece of work will be separately agreed and a detailed project specification and fee agreed with the Council.

Quality assurance

We are committed to providing you with a high quality service.  If you are in any way dissatisfied, or would like to discuss how we can improve our service, please contact me in the first instance. Alternatively you may wish to contact Paul Dossett, our Public Sector Assurance regional lead partner  paul.dossett@uk.gt.com

Yours sincerely

Darren Wells

Director

For  Grant Thornton UK LLP

cc

Zena Cooke, Director of Regeneration & Communities

David Edwards, Director of Change, Planning & the Environment

Paul Riley, Head of Finance & Customer Services