To review and agree the external auditor’s plan for 2023/24.

The Key Audit Partner, Grant Thornton (KAPGT) introduced the report of which the following principal points were noted:

1.     The report outlines the significant risk areas and audit approach for both the financial statements and the value for money audit.

2.     Significant risks for the audit approach were outlined on page 9 of the report and are consistent with what the committee would have seen in prior years.

3.     A key risk has been identified for the value for money work and is within Children's Services. This is due to the findings that were found in a prior years report from GT and the key recommendations would be followed up.

4.     Attention was drawn to the audit logistics and team on page 23 of the report.

5.     It was hoped that the audit work would commence in late June with the aim of issuing their opinion by the end of September (the statutory deadline).

6.     It was highlighted that the current Audit Manager would be taking a leave of absence and that could cause potential challenges for GT. Assurances were given to the committee that GT were doing everything they could to resource the position to keep them on track to deliver their opinion by the end of September.

In response to committee questions, it was noted

      I.         The Audit Manager is a fundamental role and an audit cannot be completed without one. All of GT’s other Audit Managers currently have full portfolios, so in order to find a replacement GT are looking to other regions within the GT network and within the public sector to see if there is any capacity for support.

     II.         Internally GT are working to the end of March as a hard deadline for past audits to close down and any that are not completed will be backstopped in September which means that they will not have an impact on the 23/24 financial year audits.

   III.         Fees are driven from the psaa and as part of the new contract year 23/24 fees had increased.

   IV.         The audit manager, key audit partner and two other associates are tasked with completion of the audit. The number of contracted hours could be provided to the committee.

    V.         It was explained when an audit has not been completed by the statutory deadline, there is no financial penalty but a notice is required to be published online to state the reason(s) why it has failed to meet the deadline. 

   VI.         It was highlighted that for there had been no changes to the standards or the code of practice for 23/24 and GT were still required to include investment properties as part of their work.

 VII.         There is currently a consultation in place that is looking at the code and looking in general at the areas of focus and what is of value to public sector organisations.

VIII.         The valuation of council operational land and buildings is done on a rolling program and the valuation of investment properties is done annually which is a requirement. The information that is provided to the expert valuer “wilks head and eve” will include the income and expenditure accounts for Maylord Orchards and the Skylon. Supporting information with regards to this would be circulated to committee members.

   IX.         The DRA explained that Maylord Orchards In terms of accountancy it is treated strictly as an investment asset.

    X.         The process and costs for the hire of Maylord Orchards was discussed.

Resolved

That: a) The proposed external audit plan for 2023/24 in Appendix A was approved and;

b) the committee emphasised the value of the timely completion of the accounts by the statutory deadline and recommends the need for a more rational code of practice in relation to the proportionate approach to the value of assets which are in use by councils.

Action(s)

2023/24-024 GT to provide the committee with the allocated time/ hours for those conducting the Herefordshire Audit.

2023/24-025 Supporting information of the valuation of council operational land and buildings would be circulated to the committee.