Agenda item

To be presented by Iain Murray from Grant Thornton.

 

·             Audit Plan

·             Fee letter

·             Pension Fund Audit Plan

Minutes:

Members received the external audit plan for 2020/ 21 (main accounts and pension fund) and fees. Iain Murray, key audit partner (Grant Thornton), was in attendance to speak to the reports. Appendices 1 – 3 contained the Buckinghamshire Council audit plan, auditor’s fee letter and Buckinghamshire Council pension fund audit plan respectively. The following key points were highlighted:

·       The auditor had identified seven significant risks standard to local authorities, which included but was not limited to, revenue and expenditure recognition.

·       The auditors look at various matters to do with the council’s accounts including but not limited to, key judgements made by management, key estimates and assumptions for example, relating to land and property, to assess whether these are reasonable estimates and assumptions. 

·       Work needed to be done around the opening position as this was the first year of the unitary authority.

·       In response to a question as to how confident the auditors were in achieving the September audit deadline next year, members were advised that there was the desire to move back to a ‘normal’ timetable but there were uncertainties given the pandemic.

·       It was asked that, when looking at the valuation of investment properties risk, were underlying political risks relating to the environment bill and agricultural bill considered. It was reported that this could be considered, although from an inherent risk perspective there was more uncertainty around the commercial and industrial element than the agricultural element at present.

·       In response to a question on comparing materiality with other local authorities, it was noted that this was one of the initial considerations as a starting point. The auditors assessed the council’s individual circumstances. It was noted that there was a degree of the unknown, as the auditor was familiar with the former Buckinghamshire County Council (BCC) accounts but not the former legacy district council accounts. It was also noted that materiality was not fixed.

·       In response to a question as to how the auditors tested how management made accounting estimates, members were advised that key questions were asked of management and their responses were assessed. Mr Murray confirmed that an Audit Findings Report would be brought back to committee in November.

·       Pension fund audit plan risks were identified similar to the Buckinghamshire Council audit plan risks, for similar reasons.

·       This pension fund audit had started and progressed well. It was hoped that this audit would be complete in a few weeks’ time.

·       It was reported that local authorities were reviewing their investment strategies, and asked what impact did that have on the pension fund audit. It was noted that this had no impact, as investment decisions were not reviewed.

·       It was noted that the Pension Fund Committee was specifically dedicated to looking closely at pension fund matters, and that Audit and Governance Committee members could review minutes of the Pension Fund Committee meetings, and feedback any comments to this committee.

·       In relation to the fee letter received, it was noted that the estimated scale fee for Buckinghamshire Council’s 2020/ 20121 audit was £300,000. This fee would need to be approved by the PSAA. The Section 151 Officer reported that this fee reflected the proposed fees to other local authorities of a similar size, and took into account the new government requirements placed on auditors. Additional funding was expected from government to help with value for money requirements, and for the auditors to produce an annual report.

Resolved to note:

(i)                  the Audit plan for the main accounts (appendix 1) summarised in paragraphs 1.3 to 1.5.

(ii)                the Auditors fees letter (appendix 2) and Proposed fees for both the Council and Pension Fund accounts as summarised in paragraphs 1.8 to 1.10.

(iii)              the Audit plan for the Pension Fund accounts (appendix 3) summarised in paragraphs 1.6 to 1.7.

Supporting documents: