Agenda item

To receive and consider the Provisional Audit Planning report for the 2024/2025 Audit. The report provides the Governance, Risk and Audit Committee of North Norfolk District Council (the Council) with a basis to review the proposed audit approach and scope for the 2024/25 audit by the Council’s External Auditor, EY.

The External Auditor (EA) outlined the summary audit plan for the 2024/ 25 financial year. They summarised the context contained within pages 19 and 20 of the report which explained that whilst central government had introduced the local audit strategy, much of it was not yet implemented. Pages 21 and 22 detailed the high level audit risks where particular attention would be paid given the greater risk of error or mistake. The EA drew particular attention to page 22 where two less familiar risks were identified -the general ledger system change and IFS 16 accounting standard which was now implemented for local government.

The Committee was asked to note the timeline for this audit as detailed on page 47 with the statutory back stop date when a set of accounts had to be signed off being 27th February 2026. The Committee's attention was also brought to Appendix B which laid out the relevant scale fees.

The External Audit Manager (EAM) updated the Committee with actions completed to date, including the planning phase to determine risks and the scope and strategy of the audit. No further areas of risk were identified during that work. Other work included activity around the significant class of transactions brackets (for example accounts receivable/ payable) and the Value for Money (VFM) assessment.

Cllr Fletcher requested more information regarding the audit ‘system leader’ referred to on page 19. The EA replied that currently there were numerous stakeholders involved and that moving forward, the Government’s plan was that a local audit office would be established which would assist in simplifying matters.

Cllr Cushing asked for clarification, as he believed that given the information provided, the audit opinion 2024/ 25 would not be disclaimed. The EA stated that the opinion would still be disclaimed. It was explained to the Committee that it would take three to four years to unwind the disclaimer on the accounts and rebuild assurance. The disclaimer would refer to historic opening balances where full assurance had not been obtained.

The Independent Person (IP), Mr V Platten, ask for confirmation that there were sufficient resources in place to support the audit process. The Assistant Director for Finance & Assets (ADFA) confirmed that there were experienced staff in place, and he was confident that they could support the audit.

Cllr Holliday asked whether treasury management was included within this plan and if not, where this process was audited. The EA confirmed that treasury management was not directly audited by them but the VFM analysis would look at it on a high-level basis to look for any significant weakness in process. The CE explained that a treasury management report was part of the next cycle of meetings and particularly the July Cabinet meeting.

Cllr Holliday asked for an explanation as to how it had been assessed [on page 21] that there was no change in risks or focus for the audit, given that the audit work had not been undertaken. The EA confirmed that this assessment was made and informed by the scope and strategy work that had been undertaken at this stage.

The Chair asked for clarification on the materiality detailed at Page 23 of the report.  The EA explained the three levels to the Committee, with planning materiality being the highest level which would impact on the audit report, performance materiality would be the threshold by which all testing was directed and the audit materiality being the level where the issue would be reported.

The Chair asked questions relating to climate change and pension values and assets given the impact of LGR and the long-term position of NNDC. The EA acknowledged the concern but confirmed that the National Audit Office (NAO) governed the approach they took. In response to a further question regarding the large increase in fees (page 54) the EA replied that they reflected the start of a new contract for a 5 year period.

Following a question from the Chair, the EA explained to the Committee that the required timeline meant that they would issue the Value for Money (VFM) assessment prior to the completion of the full financial audit.

The Committee noted the Report.