Agenda item

Sophie Morgan-Bower (Grant Thornton) introduced the External Audit Annual Report and drew attention to the following:

1. The main audit of the Council’s financial statements was due to start on 19 September and the audit of the Avon Pension Fund’s financial statements had already begun.
2. The initial planning work had been finalised
3. The certification of claims and returns work had been completed.
4. There had been no significant issues highlighted as a result of the interim audit work, but this work was ongoing.
5. Walkthrough testing had been completed for Avon Pension Fund but not for the Local Authority.
6. The Local Authority’s journal entry policies and procedures had been reviewed and nothing had been identified that would impact on the financial statements.

Peter Barber (Grant Thornton) addressed the issue of the indicative fees and responded to questions from the Committee as follows:

1. The audit plans were presented at the previous meeting and at that stage the indicative fee was to be confirmed.  This information was now available and the increase in the baseline scale fee from Public Sector Audit Appointments (PSAA) was £6k, making a total of £101,351k with additional fees being forecast as £67,313k based on the increments that had happened over previous years and new issues for 2021/22. 
2. External and Internal Quality Review: the time taken to respond to reviews would be shared across the audits and the proposed £1.5K was a share of this cost.  The audit work on Bath and North East Somerset Council had been subject to review in 2021 and the outcome was positive score 2 (1 being the highest).
3. Extraction of IT data by IT Team: This was a proposed £4K to bring in IT colleagues to source baseline data.  This was for specialist technical IT officers required to extract data and did not relate to journals work and this would be clarified in the next iteration of the document,
4. Infrastructure Assets: This had arisen as a result of Finance Reporting Council (FRC) comments in relation to another company and was driven by accountancy and audit standards.  The release of Chartered Institute of Public Finance and Accountancy (CIPFA) guidance on the issue had been delayed, but there was an expectation for more work to provide evidence of the capital value of infrastructure.  In relation to Council owned infrastructure such as roads and bridges, this was challenging to quantify. 
5. Remote working:  There was a proposed uplift of £10k to cover the costs of Council finance officers working remotely.  It was difficult to give a daily cost as this depended on the experience of individual auditors.  The opinion of the External Auditors was that a review could be carried out more efficiently in the office with the Council’s Finance Officers present and there would be an additional cost involved in a remote review as well as a likely delay in completion.  This issue was the subject of further negotiations with Bath and North East Somerset Council.  Members expressed concern about the impact of remote working on the delivery and cost of the audit.

RESOLVED that the update report be noted.