Agenda item

Peter Barber (Grant Thornton external auditors) introduced the report and the three appendices.  In relation to the core audit 80-90% of the audit was complete, with a final findings report and accounts available for approval on schedule for January 2023.  There was a caveat with an ongoing national issue on infrastructure assets (pg 78 refers).  This affected all large councils like BANES due to the scale of the Property, Plant and Equipment.  Grant Thornton are expecting a statutory override instrument to be approved on Christmas Day followed by detailed guidance.  Once received Grant Thornton would assess the scale of additional work required. For information the Avon Pension Fund accounts sign-off were also indirectly affected as they are included with the Council’s accounts.

With regard to the VFM work, this significantly changed last year and was more complex and will follow the main audit work being finalised and was expected to be completed by the end of February 2023.  Finally housing benefit work had started.  In relation to emerging findings some deficiencies had been found in IT controls with a list of recommendations relating to Agresso and two best practice points in respect of journal entry controls had been identified.

During discussion the following points were clarified:-

·  The system currently allows journals to be posted without descriptions

·  There was a need to review whether appropriate asset lives were being used for depreciation charges.

·  The majority of issues on asset lives were related to Council vehicles which were used as long as possible. 

·  It was explained that this was a best practice recommendation

Avon Pension Fund (APF)

Beth Bowers (Grant Thornton) gave a summary as regards the Avon Pension Fund and the draft findings report.  She explained the materiality threshold had not changed and the importance to note it had to be reported to the Committee.  The audit reviewed areas where the financial statements are at risk of material misstatement, this included many areas including the standards associated with journals and the valuation of level 3 assets.  She went on to explain the different levels of asset classification from complex where information was not readily available to those assets where asset prices were readily available on the open market.

During questions the following issues were clarified:-

·  The levels were based on the nature of the asset.

·  There was a lot more work and complexity with level 3 assets – triangulation, audit opinions, method of valuation, assessment of the integrity of the information.

Beth Bowers went onto explain that the APF did not have significant non-investment income but did have significant investments where key judgements and estimates were made.  These investments were listed on page 99 and included level 2 and 3 assets and highlighted some estimation differences.  Sometimes the estimation difference was due to timing and is not an indication of errors.  Some additional testing and review work was required during the audit and page 117 highlights the additional fees for this work which would be subject to PSAA approval.  Therefore, in summary due to the national infrastructure issue, they would need to publish the audit of the APF in draft format pending approval of the Council’s accounts.

The Chair noted that Grant Thornton would continue to be the Council’s external auditors for 2023-24.  Peter Barber commented that there was a need to attract more people to do the audit work as there were not enough to do it in a timely manner.

RESOLVED to note the update report and current position with regards to the Council’s audit of its Accounts for 2021/22.