To present the external audit plan 2014-15.

External Auditors Grant Thornton introduced the Plan which highlights the council’s significant challenges and the response from the auditors.  The Plan precedes the audit of the final accounts.

The significant risks of material misstatement are identified in the report as:

·           Fraud revenue, which is not significant for Herefordshire

·           Upgrade of ledger and data transfer, where Audit’s involvement is to ensure smooth transfer

·           Creditor payments, payroll and benefits

·           Value for money conclusion in terms of financial resilience and the medium term financial plan

It was confirmed that some risks are generic and are not unique to Herefordshire and that no material weaknesses have been found for Herefordshire.

In answer to a member’s question regarding the extent of the council’s say in determining the areas for audit in the context of potentially costly contracts disputes, Grant Thornton confirmed that it is possible to adapt or add to the audit plan. However the plan is designed and costed to allow for focus on major strategic risks.  Therefore there has to be a distinction between delivery compliance and working on specific activity outside of the audit plan as well as recognising the differing roles of external and internal audit.

Grant Thornton representatives gave an update on their work on an objection to the incinerator plant. Responses on Grant Thornton’s provisional views are awaited from both the council and the objector, which will then be reported to the Audit Commission. It is likely that this matter will not be concluded until May 2015 and in the meantime there is a limit to what can be disclosed about the investigation without the objector’s agreement.

RESOLVED:

that the plan be noted.