Agenda item


To provide the Audit & Governance Committee with an update on the process for undertaking the external audit of the 2022/23 Statement of Accounts. 





Barry Stratfull - Chief Accountant

Ciaran McLaughlin - Grant Thornton

Nikki O’Connor - Strategic Finance Business Partner


Key points raised during the discussion:

1.    The Chief Accountant introduced the report which provided an update on the external audit process underway by Grant Thornton. He highlighted that actions were being taken to ensure improvements and learn from the 2021/22 process, acknowledging the national issues and the Council had tried to build in better quality reviews and working papers, providing training across the organisation to make the audit process smoother for Grant Thornton.

2.    The Grant Thornton representative noted that the external audit plan was indicative as the planning work was underway. He noted that it was his seventh year in producing the plan. He noted that the four significant audit risks were: Management over-ride of controls, Valuation of land and buildings, Valuation of investment properties, Valuation of pension fund net liability; the presumed risk of fraud in income recognition was not considered to be a significant risk. Two other risks were identified: Fraud in expenditure recognition and the Accuracy and presentation of the Private Finance Initiative schemes. The Group audit was also reviewed and had a higher materiality than had been applied to the Council, reliance was placed on the work undertaken by the auditors of Halsey Garton. There were no areas of concern regarding the update on progress against prior year audit recommendations. He explained the three types of materiality, regarding trivial matters any trend with minor errors such as around senior officer remuneration or the audit fee would be reported to the Committee.

3.    The Grant Thornton representative noted the IT audit strategy. He explained that the planning work to date regarding the Value for Money (VfM) arrangements had not identified any significant weaknesses; a separate report to be provided to the Committee following the completion of the audit. Regarding the Audit logistics and team, there was an additional person in the team to strengthen the work and meet the completion date. He referred to the calculation of the proposed audit fees. He confirmed Grant Thornton’s independence from the authority, that had been approved by Public Sector Audit Appointments (PSAA).

4.    A Committee member highlighted the misspelling of indicative, the report was titled ‘indictive’. He welcomed the audit plan as the Committee had been waiting since March for it. He asked whether the Committee would receive a final audit plan in due course, he noted he had never seen an indicative audit plan before. The Grant Thornton representative noted that he would only provide the Committee with a revised plan if their audit planning work found anything that changes the current approach. He noted that the audit planning work would conclude within the month, to be followed by sample selection and testing. He confirmed that there was a team in place on site until the completion of the audit scheduled for the end of September. The External Audit Update Report was scheduled for November which would include a separate report on VfM arrangements.

5.    Regarding the audit fees the Committee member welcomed the detailed calculation of the proposed fee, however he noted that the fee that the Council was paying for 2021/22 was significantly higher than that. He noted that the original proposed fee last year was around £200,000 so there had been a 50% overspend, he asked who had the responsibility for agreeing that overspend and he asked who the contract was with. The Grant Thornton representative noted that the contract was with PSAA, it had the ultimate approval of any audit fee following agreement by the Council’s Section 151 Officer. The Committee member asked whether PSAA had approved the proposed audit fee for 2022/23, the Grant Thornton representative would follow that up and he clarified that the Council was party that contract as it signed up to being part of the PSAA arrangements. The Strategic Finance Business Partner noted that if the Council was to appeal the fee that would be done through PSAA.

6.    The Committee member asked whether Grant Thornton was satisfied that it had the capacity to deliver the audit in accordance with the timescale set out in the audit plan. The Grant Thornton representative confirmed that there was sufficient capacity in his audit team to complete the work on time, providing that they receive the right working papers and do not find any error or issues; the 2021/22 accounts would be signed by then too.

7.    The Vice-Chairman sought assurance on the team that would deliver the work. The Grant Thornton representative explained that as well as the four people listed in the report, there were four additional team members working on the audit. There was sufficient resource and work had been scheduled to be completed promptly. He noted the national discussions around potential changes to the level of work required around Property, Plant and Equipment and net pensions liabilities.

8.    The Cabinet Member for Finance and Resources referred to the transition from Grant Thornton to Ernst Young. He asked whether any transition arrangements were built into the audit plan going forward or was there a clean stop at the end of Grant Thornton’s contractual period. The Grant Thornton representative noted that at the end of the audit there was a handover process built in. He explained that the contract between Grant Thornton and PSAA included provisions for supplying information to the incoming auditor, Ernst Young would receive copies of the latest audit findings report, have access to review Grant Thornton’s files to look at the work undertaken and could ask the team questions during their planning process.

9.    The Chairman noted the fluidity of the audit plan based on what happened last year.



Approved the 2022/23 Audit Plan.

Actions/further information to be provided:

1.    A15/23 - The External Audit Update Report scheduled for November will include a separate report on the Value for Money (VfM) arrangements.

2.    A16/23 - The Grant Thornton representative will confirm whether PSAA has approved the proposed audit fee for 2022/23.


Supporting documents: