Agenda item

To review the Governance, Risk & Audit Committee Work Programme.

The DS&GOS informed Members that the EY Annual Audit Letter and Final Statement of Accounts for 2019/20 had been expected at the December meeting, though these had been delayed due to ongoing issues with the external auditors. The CTA stated that there were two outstanding issues with EY which related to the sign-off of the 2018/19 and 2019/20 accounts. It was reported that the 2018/19 accounts sign-off was imminent, and that the remaining issues had been resolved, which meant that the annual audit letter could be expected at the March meeting. On the 2019/20 accounts, the CTA stated that they should have been signed-off in November, which whilst later than normal, had still not been met due to resourcing issues with the external auditor. It was noted that up to 55% of Councils had missed this deadline, and the audit for the 2020/21 year was not scheduled to begin until the end of February 2021, which meant that the audit would not be completed in time for sign-off at the March meeting. This would create a clash of signing-off the 2019/20 accounts with the start of the 2021/22 accounts, though this was preferable to a conflict with the budget setting process that required greater resource.

Questions and Discussion

   i.          The Chairman noted that the issues raised were not unique to EY and expected that there would be justified reasons for the delays, but asked whether there was any break clause in the contract with the external auditor. The CTA replied that PSAA held the Council’s external audit contract and did so for 97% of Council’s, which was intended to secure economy of scale. She added that to her knowledge there was not a break-clause in the contract, and she understood that PSAA would not take action on delayed audits, so long as the quality of audit’s was maintained. It was noted that in future, external audit procurement through the PSAA was opt-in, though the current contract term was for five years.

  ii.          Cllr H Blathwayt stated that he was a representative of NNDC at a different authority, and whilst EY had completed the 2018/19 external audit, it was suggested that a prohibitive price increase had been presented for future audits. He asked whether it was possible that similar circumstances could be presented to the Council. The CTA replied that she had not yet seen the offer for future years, though as a general rule it was apparent that prices were rising above the expected threshold. She added that ultimately the quality of the audit was paramount, and if this meant an increase in audit costs then it would likely be considered acceptable.

iii.          Cllr P Butikofer asked whether the accounts remaining unsigned would have any negative impacts or drawbacks for the Council. The CTA replied that whilst this had been expected, it did not appear to be the case and there was no evident detriment to the Council at present.

iv.          The Chairman suggested that it could be useful for the Committee to see a register of the Council’s assets and asked whether it could be added to the Work Programme. The CTA replied that this would be possible, though it would be helpful to understand exactly what the Committee sought to achieve with the information. In reply to a question from Cllr H Blathwayt, the Chairman suggested that as a Member he was unsure of the current value of the Council’s assets, and suggested that it could be useful for the Committee to better understand this from an audit perspective. The CE stated that the Estates and Asset Strategy Manager complied a list of assets for insurance purposes on an annual basis, though this was a book value that may not be relative to market values. The CTA added that as part of the statement of accounts, all property assets were reviewed each year at fair value, which would be more relevant than a reinstatement value calculated for insurance purposes. It was noted that CIPFA’s requirement for Council’s to develop an annual capital strategy also required a plan for restoring changes in asset values. As a result, it was appropriate and reasonable for the Committee to review the asset register.

 v.          In response to a question from Cllr P Butikofer, it was confirmed that the register would cover all assets, as opposed to those over a certain value.

vi.          The request to add a review of the Council’s asset register to the Committee’s Work Programme was proposed by Cllr J Rest and seconded by Cllr C Cushing.

RESOLVED

To add a review of the Council’s asset register to the Committee’s Work Programme.