Agenda item
Minutes:
The Committee was informed that audit plans for all the districts had been presented to the respective Audit Committees or circulated via email to the Chairman and Vice Chairman of the Audit Committee if there had been no scheduled meetings during March 2020 before the lockdown.
Since the original audit plans, there had been two significant events : the outbreak of Covid-19 and creation of the new Buckinghamshire Council and the Audit & Governance Committee. The Audit plan update attached at Appendix 1 to the agenda provided an update on impact of Covid-19 and audit risks resulting from these events.
In the original plans, the auditor had also outlined the impact the changing risk and regulatory environment was having on audits and the discussions that were ongoing with the Public Sector Audit Appointments (PSAA) regarding the scale fee setting process. The Audit Plan update included an update on how those issues were impacting the scale fees of the District Councils that were subject to approval by the Public Sector Audit Appointments (PSAA).
Due to significant increase in fees across all the District Councils, these had been challenged but at the same time it was recognised the changes to the regulatory environment was having an impact on the audit work and ultimately the fees would need to be approved by PSAA.
Members were informed that the total consolidated budget for the District Councils’ Main audit fees and Housing Benefit Fees was £277K, the total revised fees (which would have to be approved by PSAA) which included an estimated cost of extended testing for Housing Benefit forecast at £343K that would result in a forecast overspend of £66K. The Finance Service would endeavour to manage this forecast overspend within its overall budget, however ultimately this might have an impact on Council’s overall General Fund position.
Members considered the Appendix 1 report from the external auditors on update of audit risks, other areas of audit focus, and update on audit fees, and in response to questions were informed as follows:-
(i) that the increase in fees was due to a number of factors including significant changes in the regulatory environment, increased risks due to the current Covid pandemic and there had been an increase in the focus on areas of the financial statements where judgemental estimates were made, e.g. valuation of land and buildings (such as Consilio) and pension assets and liabilities. This also meant that some work was taking slight longer to complete than had been anticipated.
(ii) that the increase in fees for the area ‘Changes in expectations on delivery’ was due to Councils’ systems not being as advanced as had been predicted.
(iii) that the total revised fee for the auditing of the County Council’s 2019/20 financial statements of £92,828 had been reported to the Audit and Governance Committee on 10 June 2020. Again, this fee would need to be approved by the PSAA.
Members expressed concerns with the larger than expected increase in the fees for auditing of the 2019/20 District Councils’ financial statements, with the increases seemingly larger than those for audits of similar Councils. The external auditors were asked to report back in due course with a breakdown of the work that had been undertaken and the fees charged for that work.
RESOLVED –
That the update on District Councils’ audit plans including the increase in audit fees be noted.
Supporting documents:
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