Issue - meetings

The Committee considered the External Auditor’s Annual Audit Letter summarising the main findings from the work undertaken by the External Auditor for the year ended 31 March 2017.  It was noted that:

·  The External Auditor had given an unqualified opinion on the Council's accounts on 28 September 2017, in advance of the 30 September 2017 national deadline.

·  The External Auditor was satisfied that in all significant respects the Council had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2017.

In response to questions, the Director of Finance and Business Improvement/representative of the External Auditor explained that:

·  The level of materiality used in planning and performing the audit of the Council’s accounts was 2% of the Council’s gross revenue expenditure (£1.79m).  The concept of materiality to provide a level of assurance was well established and 2% represented the lowest level of risk that the External Auditor operated at.  A lower level of specific materiality for Cash of £500k had been set by the External Auditor.

·  The aim of External Audit work was to give a true and fair opinion on the Council’s Financial Statements and these Statements were at a higher level than day to day transactions.  They were not the figures used for day to day operational purposes; for that Management relied more on Internal Audit which tended to go into more detail.  This approach was appropriate for the Financial Statements, but for internal purposes, management accounts and operations, a different standard was required.

·  With regard to the findings and conclusions of the work undertaken by the External Auditor in response to the risk identified in relation to the valuation of the Council’s Pension Fund net liability, the Council was part of the Kent Pension Fund.  The County Council used an Actuary to value the Fund at a point in time (31 March 2017).  One of the rates used by the Actuary was 0.1% outside the range used by the External Auditor’s expert who had reviewed the Actuary’s assumptions, so it was very minor.  Looking at the impact of all assumptions holistically, the External Auditor had obtained sufficient assurance that the Pension Fund liability was not materially misstated.

RESOLVED:  That the External Auditor’s Annual Audit Letter for the year ended 31 March 2017, attached as Appendix 1 to the report of the Director of Finance and Business Improvement, be noted.