To receive a report from Grant Thornton.
Chair introduced Julie Macsi (Key Audit Partner) who went on to highlight some of the changes to the Code of Audit Practice, which means the Value for Money assessment isn’t included in this report, though there is some commentary. She went on to explain to members how the Value for Money work has changed in scope.
It was confirmed that the Value for Money work has started, and that Grant Thornton are now required to provide an Auditors Annual Report which captures the Value for Money assessment. Additionally, it was stated that the National Audit Office have granted another 3 months for the Value for Money work to be completed – Value for Money conclusions are now required within 3 months of issuing the opinion.
It was confirmed that the report will come to the Committee once completed.
A progress update on the Audit Opinion was provided for members and the Key Audit Partner explained the issues that needed to be resolved. It was explained these issues may impact on the wording of the opinion but it would still remain as an unqualified audit opinion. The Key Audit Partner went on to summarise the position in relation to the financial statements and thanked the Section 151 Officer and his team for their work stating that the audit had gone very well.
Andrew Davies (Engagement Manager, Grant Thornton) then ran through the Audit Findings Report with members and explained the outstanding items. It was confirmed that the letter of assurance from the Devon Pension Fund auditors should be available by mid-October.
Chair queried the delay and asked if there would be similar issues in future audits. Julie Macsi explained she is the Engagement Lead for the Devon Pension Fund and provided an updated in relation to the delays. She assured the Committee that there are plans to review how the pension work is delivered in future to improve the position next year.
The Engagement Manager confirmed the other outstanding item was in relation to Property Plant and Equipment and confirmed that existence checks were now completed and a response from the valuer had now been received, so work is progressing. It was mentioned there is an area of follow regarding Material Uncertainty, and Grant Thornton would be speaking to the Valuer this week to try and resolve this.
The Engagement Manager provided a summary of Grant Thornton’s findings and conclusions and highlighted the key findings for members.
Chair asked members for any questions.
Members queried whether Audit and Governance Committee will have a role in relation to the Trading Company. The Head of Legal and Governance (Monitoring Officer) stated that Full Council have appointed the Board and the Board would run the Trading Company. Audit and Governance may have a role in relation to financing the LATC and internal controls, but day to day decisions would be for the Board.
The Key Audit Partner from Grant Thornton mentioned that the the Committee would have a role in seeking some assurance around the adequacy of the Governance. Chair requested an example in relation to how this would be achieved. She explained some other Local Authorities who have set up Trading Companies used internal audit around specific governance arrangements. She stated the Local Authority would have a responsibility, as a commissioner of services, to ensure there are adequate governance arrangements in place – she talked about using monitoring to hold the Trading Company to account on service delivery and to seek assurance as a commissioner.
There was some discussion around the Trading Company, responsibilities of TDC as the parent company and potential risks. It was explained that this would need to be addressed within the contract and by also by having the appropriate monitoring process in place. The Head of Legal & Democratic Services (Monitoring Officer) provided an overview on the work already taking place and highlighted the workshop members attended, where the specification was discussed.
Member’s queried the audit fee in relation to the certification of housing benefits subsidy and this was explained by the Key Audit Partner, she explained he testing requirements set by the DWP and the required checks they are required to undertake depending on error rates. There was a further discussion regarding the commissioning of this piece of work and how and when non-audit fees / additional charges are disclosed.
Member’s queried the assessment key on page 64 and the Key Audit Partner and Section 151 Officer explained the assessment outcome and the provided some more context.
Following a query from members the Section 151 Officer explained the tendering process for External Auditors and how this is coordinated nationally and the process for going out to tender individually. There was a further question to Grant Thornton regarding a lack of Audit staff, which has been highlighted by the PSSA, and how this is being addressed. The Key Audit Partner provided an update to members on how they are building their capacity to support the delivery of contracts.
Member’s duly noted the report.