Agenda item

M Hodgson, Associate Partner, Ernst and Young presented the update to the Audit Plan which was presented to the Committee on 11 March 2019.

Members were advised of the details of the risks and provided with an outline of the audit strategy in response to those risks.

M Hodgson highlighted that there would be additional audit fees for the work performed to address these risks which would be discussed and agreed with the Deputy Chief Executive/Executive Director – Finance Services (S151 Officer) and the Public Sector Audit Appointments Ltd.

The Committee was advised that the additional risk and the increased audit work to address it would also impact on the previously agreed audit timetable.  To ensure that the Borough Council received the best quality audit from Ernst Young, it is proposed that an alternative timetable is issued for the audit of the 2018/2019 accounts.

In response to questions regarding other loans which the Borough Council had taken out, M Hodgson explained that it was a question for the officers to answer.  However, he advised that loans were reported in the Borough Council’s Financial Statements and that Ernst and Young could only audit the evidence provided by the Council.

The Deputy Chief Executive advised that all treasury practices were part of the Treasury Management Strategy.  It was highlighted that the treasury activity, including details of all loans was monitored and that Monthly Monitoring Reports were circulated to Members.  The Committee was advised that the Council used treasury advisers to supplement the Council’s in-house team.  It was noted that as far as possible the Council ensured that loans were safe and secure.

Following further questions on the due diligence checks undertaken when the Council took out loans, the Chairman explained that within the Treasury Strategy there was clear criteria from which the Council was required to operate from.  All loans would also be included in the Council’s accounts.  The Deputy Chief Executive explained that the treasury practices could be picked up as part of the Audit Committee training which could be provided in-house or by an external trainer.  Members were informed that they could request monitoring reports be presented to the Committee.

In response to questions on the timetable for the Cross Party Working Group, the Chairman explained that a specific timetable would be set out and recommendations made to Cabinet.  Once the work of the Cross Party Working Group had concluded, the LGA would undertake the external review.  M Hodgson explained that Ernst and Young would issue an opinion on the Financial Statements during August/September and advised that following the completion of both internal and external investigations, the evidence would then be audited and a value for money opinion issued later in the year.

The Deputy Chief Executive provided an explanation as to why the Borough Council would not meet the required deadline and there would therefore be a delay in the publication of its accounts which had been discussed with Ernst and Young.  However, a statement would be published on the Borough Council’s website on 7 June, the link to the website would be included within the minutes of this evening’s meeting.

Councillor Pope commented on the KLIC and software entries on the Corporate Risk Register.  M Hodgson advised that Ernst and Young were not in a position to respond to the comment, but explained that the Risk Register was part of the Council’s Risk Management Policy to which the external auditors had no input.

RESOLVED:  The Committee received the revised Annual Audit Plan.