To consider the external auditors audit finding report for the year ended 31 March 2020.

The committee considered the external audit findings report for the year ended 31 March 2020.

Jon Roberts, engagement lead for Grant Thornton, presented the report and made the following key points: the report was being received later than usual due to issues around value for money; an initial external audit findings report had been provided to the committee in September 2020 and ‘The Audit Findings for Herefordshire’ document attached at appendix A to the report indicated original text in black font and new text in red font; it was reported that the council had proper arrangements in place in all areas considered, except for in relation to the governance over the capital programme and children’s services and a qualified conclusion was issued in respect of the value for money assessment; attention was drawn to the value for money sections and the significant risks identified which would be reflected in the external auditors annual plan 2020/21; a matter which had resulted in certificates of completion being withheld for a number of years had been addressed; and an overview was provided of the reasons for the proposed audit fee variations.

Questions and comments were invited from committee members and responses were provided, the principal points included:

1.           The additional explanations provided since the previous iteration were welcomed and it was suggested that a separate glossary would be helpful going forward.

2.           With reference made to the finding in the ‘Value for Money’ money section (agenda page 42) - ‘The Cabinet member for infrastructure and transport proposed that a progress review be brought back to Cabinet after six months.  Whilst the Council is working on implementing these recommendations, the six-month review suggested by Cabinet has not been achieved.’ - it was commented that the ‘Major contract performance update’ report had been considered by Cabinet on 29 July 2021 (minute 32 of 2021/22 refers), so the finding did not reflect the current situation.  The chairperson noted the position with reporting post balance sheet events and suggested that such reports needed to be specific about the date of publication, so that it was clear that subsequent events would not be reflected in the report.  Jon Roberts confirmed that the report commented on the adequacy of the arrangements for the financial year ended 31 March 2020.

3.           In response to a question about journal authorisation (agenda page 48), Jon Roberts explained the significance of journals and that the risk of management override of internal controls was included in every audit plan.  The chief finance officer confirmed that he was assured about the systems and processes in place but had undertaken to explore local amendments to Business World.  It was confirmed that this situation was encountered within other authorities who shared concern about customising financial software packages and the subsequent risk that that entailed.

4.           With reference made to the comment ‘We have continued our review of relevant documents up to the date of giving our report, and have identified one further significant risk where we needed  ...  view the full minutes text for item 16