Agenda item

2018-19 External Audit Plan

Minutes:

Members were informed of the planned work of the external auditor in conducting their audit of the Council’s Statement of Accounts 2018-19.

 

The External Auditor, Grant Thornton advised that the auditors had completed their interim fieldwork visit and provided a short report on their conclusions which was attached at Appendix Three for Members information.

 

The External Auditor, Grant Thornton, outlined to Members that three significant risks requiring special audit consideration and procedures to address the likelihood of a material financial statement error had been identified. The reasons for their risk identification were explained on page 22 of the report: 

 

• Management override of controls

 

• Valuation of property, plant and equipment

 

• Valuation of pension fund net liability

 

The External Auditor, Grant Thornton, further explained that:

 

  • The level of materiality for the council was slightly lower than in previous years due to decreased expenditure by the council. In giving the audit opinion, it must be determined if the accounts are true so materiality had to be calculated; Grant Thornton determined Gravesham’s planning materiality to be £1.50m (PY £1.59m), which equated to 2% of the prior year’s gross expenditure for the year. Grant Thornton were obliged to report uncorrected omissions or misstatements other than those which were ‘clearly trivial’ to those charged with governance. For Gravesham Borough Council, the ‘clearly trivial’ figure was set at £75K (PY £85K)
  • The risk assessment regarding Council arrangements to secure value for money has identified Brexit as a VFM risk; all local authorities in Kent have Brexit as a risk as Grant Thornton have to recognise the potential risks Kent faces depending on the outcome of the Brexit vote. Grant Thornton will review GBC's arrangements and plans in place to mitigate any risks relating to Brexit. The review will focus on areas such as workforce planning, supply chain analysis, regulatory impact and impacts on finances including investments

 

  • With regards to the Audit Logistics a timetable has been agreed that the final visit will take place between June and July 2019 in order to meet the Finance & Audit Committee report deadlines. The total fee for the external auditing has decreased by 25% due to the procurement exercise undertaken by PSAA

 

The Committee raised concern over the technical jargon used throughout the report; Members felt that Councillors that were new to the Committee after the May elections would have trouble understanding it. It was understood that legally some of the technical terms had to be used but the Committee asked that a ‘laymen’s terms’ explanation also be included so that it could be universally understood by both Members and the public.

 

The External Auditor, Grant Thornton advised that she would feed that comment back to her team for future reporting.

 

The Assistant Director (Corporate Services) agreed with the Members sentiment to assist new Members, adding that officers of the council will provide training on financial areas of the Committee. The Committee handbook will also be updated to make sure all Members are well equipped in their role.

 

Resolved that Members noted the information contained within the report.

 

Supporting documents: