To review and agree the external auditor’s audit plan for 2019/20.

Grant Thornton presented the report.

As part of the discussion on this item, the following points were raised: 

·         The value for money statement criteria would not change for this year’s audit.

·         Where Grant Thornton identify key significant risk there is tailored audit work undertaken.   

·         The main areas where there is a likelihood of a material financial statement error were the same presumed risk for all Grant Thornton clients and are:

o   Valuation of land and buildings

o   The valuation of the net pension funding liability

o   The management override of controls.

·         Grant Thornton operate on a materiality basis and would expect accounts to be correct to a factor of millions.

·         The materiality definition two years ago was based on gross expenditure.   Last year as a pilot the materiality definition was based on council assets.     This change in materiality definition made little difference to the testing and as such for this year’s audit would revert back to gross expenditure.

·         The materiality definition was set at a value of £6.7m and any materiality issues over this figure would be reported to the committee.

·         The key themes which form the value for money opinion were:

o   The wider economy and political uncertainty

o   Financial report and audit

o   Governance arrangements and the new political structure of the council

·         As part of the work on the value for money opinion, Grant Thornton would be looking at the forecast overspend due to an increase in looked after children, the management of the capital programme and the arrangements for policy change due to change of administration in May 2019.

·         The land and buildings were valued on a rolling 5 year basis and Grant Thornton would risk assess the process to ensure that the valuations were within the materiality level.  

·         Higher valued assets were valued more regularly than every five years.   It was noted that the council owned a complex range of assets and values them on a one-fifth basis every year. 

·         As part of the arrangements for policy change, one of the key things they would be looking at would be rationality of decision making and reasonable which included whether officer advice was being reasonably taken into account when developing and implementing new or amending policy.   This was not on the corporate risk register but it was noted that the risk would look at the risks arising rather than this contained point. 

RESOLVED

That the report be noted.