Agenda item

Colleagues from Grant Thornton were at the meeting to present the External Audit Plan.  Beth Bowers introduced David Johnson who was the Audit Manager for the Council and George Amos who was the Audit Manager for the Pension Fund. 

David Johnson gave an overview of the plan for the Council briefly highlighting the ongoing auditing delays for local authorities.  He went on to outline the significant risk areas and stated that they had determined materiality for the Council at £7.7m for the Council and £7.8m for the group.  They liaised with Aequus to form their opinion.  In respect of significant weaknesses they would have a planning meeting and there would be a progress report to the next meeting.  It was envisaged that the sign off would be at the September or November Committee.  He highlighted the increase in fees due to the new PSAA (Public Sector Audit Appointments) contract and IFRS 16 leases which resulted in a large amount of work and preparation.  He referred to the escalation policy which included steps to ensure that there were no delays with sign-off in the future so that the audit was delivered in the time frame.

Beth Bowers reminded members of her previous disclosure of a close family member being part of the Pension Fund.

The following questions were answered:

·  Noting the increase in fees, over the last 15 years the costs of audits had not increased in line with inflation and the PSAA contract would redress the balance and support Grant Thornton in catching up with the backlog;

·  page 23 the management override of controls, this was a mandated risk (Councillor Toby Simon);

·  there would be a meeting with the Chair of the Corporate Audit Committee in September after the main audit work was under way in June – July;

·  the terms rebuttable and non-rebuttable were explained and it was noted that there were different forms of revenue in the public sector and revenue was not the main driver (Councillor David Biddleston);

·  Grant Thornton delved into the details and explained examples of high-risk items.  With the Roman Baths the risk and materiality were analysed and only high-risk items were reported on (Councillor Toby Simon);

·  significant risks were often similar year-on-year (Councillor David Biddleston);

·  reference was made to IT audit and regard to the Horizon Post Office scandal.  There was a Grant Thornton team of IT experts who did detailed work on systems on a risk-based frequency, plus testing year-year but if there was a new Council system then further work would be done as it could be seen as a significant risk (John Barker);

·  a glossary of terms might be useful for new members, however, it was difficult to know what some people didn’t know (Councillor David Biddleston);

·  with changes to the structure or functionality it would be useful to have more networking between members (John Barker);

·  the suggestion was made that all members be invited to the Chair’s briefing before a Committee (Councillor Malcolm Treby) and this would be trialled.

George Amos presented the audit plan for the Pension Fund and stated that materiality was £62.9m.  The revenue and expenditure risks were rebutted and there was work on the journals and level 3 investments.  In the IT audit there was work on Altair which was specific to the Pension Fund.  Other systems were common to both the Council and the Pension Fund.  Both audits were running at the same time and were envisaged to be considered at the September Committee.

The following questions were answered:

·  Altair was a Pensions specific system supplied by Heyward;

·  there was a focus on work where materiality was mis-stated and the External Auditors had been made aware of the financial value near the materiality threshold (Councillor Toby Simon).

On a motion from Councillor Malcolm Treby, seconded by Councillor Toby Simon it was

RESOLVED

1)  That the 2023/23 External Audit Plan for the Council (Appendix 1) and External Audit Plan for the Avon Pension Fund (Appendix 2) be endorsed; and

2)  that all members of the Committee be invited to the virtual Chair’s briefing before a Committee.