Agenda item

To consider Ernst and Young’s Provisional Audit Planning Report for Year Ending 31 March 2021.

RECOMMENDATION

1.     That the Provisional Audit Planning Report for Year Ending 31 March 2021 be received and noted.

2.     That the Audit Committee scheduled for 23 November 2021 be replaced with a meeting on 14 December 2021 to allow the Statement of Accounts to be signed by the end of the calendar year.

The Committee considered the Provisional Audit Planning Report for the year ended 31 March 2021 which was included as Enclosure 8 to the agenda.  The report set out the proposed audit approach and scope for the 2020/21 audit and summarised the external Auditors’ (Ernst and Young LLP) initial assessment of the key risks driving the development of an effective audit from the Council as well as the planned audit strategy in response to those risks.  The Associate Partner of Ernst and Young highlighted that the planning procedures were ongoing, specifically in relation to the new requirements for the value for money conclusion.

The Associate Partner of Ernst and Young gave the Committee an overview of the Provisional Audit Planning Report and explained that it would not be possible to complete its audit of the Council’s financial statements by the 30 September 2021, as previously intended, due to the increased level of work and scoping involved.  It was therefore suggested that the Audit Committee scheduled for 23 November 2021 be replaced with a meeting on 14 December 2021 to allow the Statement of Accounts to be signed by the end of the calendar year.

The Committee considered matters raised, and in doing so:

•          Was informed that Public Sector Audit Appointments Ltd (PSAA) had not yet approved the fee scale for 2019/20, the Committee would be provided with a further update at its next scheduled meeting.

•          Acknowledged that the report before it was provisional and, as such, an updated addendum on any new risks would be brought to a future Committee meeting.  The Committee was being requested to receive and note the Audit Planning Report as it stood.

•          The audit risks and areas of focus (set out on pages 53-55 of the Agenda Pack) were those which Ernst and Young were aware of or had identified as a potential risk.  The Committee’s attention was drawn to the two “fraud risks” and the “significant risk” detailed on page 53 of the Agenda Pack) and that Ernst and Young did not feel able to provide an audit opinion on those issues at the present time.

•          The Committee continued to express its concern at the revised proposed fee scale.  The Associate Partner for Ernst and Young explained that the professional and regulatory requirements had changed significantly from previous years which had increased the level of work which needed to be undertaken by them.

•          The Chair informed the Committee that they would again be writing to Ernst and Young and the PSAA to echo the Committee’s dismay at the significant increase in fees and to request specific information be provided which justified the fee increase.

•          Noted that the Head of Corporate Finance and the Associate Partner for Ernst and Young would be working together to complete the audit as efficiently as possible.

RESOLVED

1.       The Provisional Audit Planning Report for Year Ending 31 March 2021 be received and noted.

2.       The Audit Committee scheduled for 23 November 2021 be replaced with a meeting on 14 December 2021 to allow the Statement of Accounts to be signed by the end of the calendar year.