Agenda and minutes
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Venue: Civic Centre, Windmill Street, Gravesend, Kent
Contact: Committee Section
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Apologies for absence Minutes: An apology for absence was received from Paul Grady – the External Auditor, Grant Thornton.
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To sign the minutes of the previous meeting. Minutes: The minutes of the meeting on Monday, 17 February 2020 were signed by the Chair.
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Declarations of Interest Minutes: Cllr Gow, Cllr Rice and the Assistant Director (Corporate Services) declared an Other Significant Interest for agenda item 8 as appointed Directors of Rosherville Limited, the Council’s Local Authority Trading Company.
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Order of Agenda Minutes: The Committee agreed that agenda item 10 & 11 be brought forward as the External Auditor, Grant Thornton had to leave the meeting early.
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2019-20 External Audit Plan Minutes: Liulu Chen introduced herself to the Committee as the new Audit Manager from Grant Thornton and presented Members with the External Audit Plan for the year ending 31 March 2020.
The External Auditor, Grant Thornton advised Members that the three significant risks identified were the same as in the External Audit Plan for 2018-19. Those risks requiring special audit consideration and procedures to address the likelihood of a material financial statement error were identified as:
The External Auditor, Grant Thornton further directed Members attention to page 5 of the report which explained the findings for the below headlines:
In response to Members questions, the Assistant Director (Corporate Services) and the External Auditor, Grant Thornton explained that:
Following a question, regarding if it was a mandatory requirement or a choice by Grant Thornton to have their findings verified externally, the External Auditor, Grant Thornton advised that she would consult with the Engagement Lead for Gravesham and circulate an answer after the meeting.
The Chair thanked the External Auditor, Grant Thornton for her presentation.
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Interim Progress Report Minutes: This item was dealt with under item 11 – 2019-20 External Audit Plan.
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Review of Accounting Policies 2019-20 Additional documents: Minutes: The Committees endorsement was sought for the Accounting Policies to be used in formulating the Financial Statements for the authority for the financial year 2019-20.
The Principal Accountant (General Fund) advised that they identified no major changes to The Code that will influence the Council’s accounting policies for 2019-20. Therefore, the accounting policies will broadly remain in line with those used to prepare the 2018-19 statement of accounts, although the wording of accounting policies has been updated where necessary to provide greater clarification.
The Principal Accountant (General Fund) drew Members attention to paragraph 2.3, as with the agreement of the Council’s Engagement Lead from Grant Thornton following a discussion in autumn 2019, the de-minimis level when considering accruals will be increased from £750 to £2,000 for preparation of the 2019-20 accounts. An accrual relates to adjustment for income or expenditure which hasn’t been recorded yet such as expenses not paid or income not yet received.
The Council has been required to undertake an assessment to see what the impact of the new accounting standard listed at paragraph 2.4, IFRS 16 – Leases, will have on the Councils accounts as all qualifying leases will now be recorded on the Council balance sheet as assets and what’s owed on that asset will become its liability. Officers from the Finance Team have already identified steps for existing leases and have ensured arrangements are in place to comply with the new standard. The new accounting standard has not directly affected the preparation of the financial statements for 2019-20.
The Principal Accountant (General Fund) concluded that the accounting policies have been shared with the external auditors and may therefore be subject to any comments / feedback from the Council’s external auditors.
The Assistant Director (Corporate Services) and the Principal Accountant (General Fund) fielded questions from the Committee, explaining that:
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Audit & Counter Fraud Quality Assurance & Improvement Program Additional documents:
Minutes: The Audit & Counter Fraud Shared Service Quality Assurance & Improvement Programme for 2020-21 was presented for approval to the Committee.
The Audit & Counter Fraud Team Leader advised that the QAIP had been reviewed and was considered to continue to meet the necessary requirements and will therefore continue to be in place for the coming financial year, subject to the proposed amendments from 2.2.1 to 2.2.4 of the report.
Following questions and comments from Members, the Audit & Counter Fraud Team Leader advised that:
Resolved that Members approved the QAIP presented at Appendix 3 for use in 2020-21.
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Audit & Counter Fraud Strategy 2020-24 Additional documents: Minutes: The Audit & Counter Fraud Shared Service Strategy for 2020-2024 was presented to the Committee for approval.
The Audit & Counter Fraud Team Leader stated that the document attached at appendix two was the updated Audit & Counter Fraud Strategy designed for the next four years up until 2024, but the three main objectives remained the same. The team will continue to build on the success achieved by the shared service since 01 March 2016.
The Committee asked for clarification on any changes to the Strategy compared to the previous one.
The Audit & Counter Team Leader advised that there had been a minor amendment to Objective Three – Positive Impact; the below wording was added to the Objective
Resolved that Members approved the Audit & Counter Fraud Shared Service Strategy 2020-24 presented at Appendix 2.
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Audit & Counter Fraud Plan 2020-21 Additional documents: Minutes: The Audit & Counter Fraud Plan 2020-21 for Gravesham, attached at appendix two to the report, was presented to the Committee for approval.
The Audit & Counter Fraud Team Leader stated that the Audit & Counter Fraud Plan has been prepared based on the cyclical programme of core financial and governance activities listed on page 8 of the Plan and a risk assessment to ensure that the team’s resources are directed to the highest area of risk. Senior management have also been consulted on the draft plan to corroborate this risk assessment.
The Audit & Counter Fraud Team Leader fielded questions from the Committee, explaining that:
- James Larkin as the Head of Audit & Counter Fraud Shared Service - Helen Thaqi, Nikki Ashby and Mark Cayzer as Audit & Counter Fraud Team leaders - Eight Audit & Counter Fraud Officers - An Intelligence Analyst and an Assistant
Resolved that Members approved the Audit & Counter Fraud Plan 2020-21 for Gravesham presented at Appendix 2.
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Minutes: The Committee was provided with a copy of a letter received from the Council’s External Auditor, Grant Thornton UK LLP, setting out proposed additional fees relating to the 2019/20 audit of the Council’s financial statements.
The Assistant Director (Corporate Services) summarised the background of the letter and informed Members of the Councils decision in 2016 to unanimously accept the invitation to opt into the appointing persons arrangements made by PSAA for the appointment of external auditors.
The Assistant Director (Corporate Services) advised that the additional fee of £7,500 in addition to the scale fee of £41,036 was set out as being necessary for Grant Thornton to meet their requirements for the Councils 2019/20 accounts.
The Assistant Director (Corporate Services) outlined key points from the report to the Committee regarding the below four key areas that Grant Thornton explained were directly related to the need for the additional fee:
The Letter set out the intention to approach the PSAA for the additional fee; the Section 151 Officer attended a meeting of the Kent Finance Officer Group and it has been recognised that the current level of audit fee was not sustainable to deliver a quality and compliant audit service.. There is a government review currently being undertaken to consider the scope and role of external audit, the Redmond review; the initial findings from the review are expected later on this month with formal reporting currently scheduled for June..
The Assistant Director (Corporate Services) fielded questions from Members and explained that:
The Chair echoed the Assistant Director (Corporate ... view the full minutes text for item 54. |