The External Audit Plan prepared by Grant Thornton is submitted to the Audit and Risk Committee which provides an overview of the planned scope and timing of the statutory audit of the Council for those charged with governance.
The External Auditor Grant Thornton submitted for noting the External Audit Plan for year ending 31 March 2021, which provided an overview of the planned scope and timing of the statutory audit of the Council for those charged with governance.
The document was presented by Grant Patterson, External Auditor. Points highlighted in the document were:
· Key matters were highlighted where Covid-19 continued to feature heavily on the Council’s agenda and finances.
· The volume and nature of accounting for additional grants and packages had impacted on the Council’s work over the course of the pandemic and how they were reported.
· Significant risks as deemed by external auditors were listed in the report. There were two presumed risks: firstly, improper revenue recognition and secondly, management override of controls. For the latter, external auditors’ proposed response to address this would be to focus on subjective areas of the accounts, including estimates where management could circumvent normal controls to achieve a certain outcome.
· With regards to the first risk, external auditors had rebutted this risk, but would still undertake a significant level of work on the Council revenue streams.
· Valuation of net pension fund liability was listed as a significant risk and had previously been raised in the progress report at Audit & Risk Committee in March 2021.
· It was recognised that the risk of valuation of land and buildings had had significant work undertaken by both the external auditor and Council, and associated recommendations were kept open.
· The risk of Operating Expenses highlighted the focus on the need for completeness of non-pay expenses.
· Other matters provided a summary of the external auditor’s responsibilities, included the requirement for them to read the Council’s Narrative Report and Annual Governance Statement to check they were consistent with the financial statements, on which they would give an opinion.
· All external audit work was driven by materiality, levels of which were lower than the financial year ending 2020. Any changes on materiality would be reported back to the Audit & Risk Committee as part of the external auditor’s findings report.
· Whilst no longer giving a value for money conclusion as in previous years, external auditors were now required to ensure there were proper arrangements for improving economy, efficiency and effectiveness, financial sustainability and governance.
· There were risks of significant weakness in the funding levels beyond 2021/22, which were uncertain.
· The increase in audit fees for the year were set out for transparency in the report.
· The Council also commissioned the external auditor to undertake other work, and were standard pieces of work around housing benefits, teachers’ pensions and housing capital receipts returns.
· One matter brought to the attention of the Committee was a member of the audit team based at Birmingham had a close family member who worked at the Council, and the individual had not worked on any audit work for the Council, and independence had not been impacted.
In response to Members’ questions, the following responses were given:
· With regards to Council Dwellings valuation, the valuation needed to ... view the full minutes text for item 10