Agenda item

Recommendation: The Committee to note the External Audit Plan 2024/2025.

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The External Auditor presented the External Audit Plan 2024/2025

The Chair thanked Officers and invited questions and comments from the Committee.

Councillor de Winton referred to page 23, and sought clarification on the context in which leases were being referred to. He questioned the effect of leases on the balance sheet.

The External Auditor confirmed this would impact the balance sheet and largely affect operating leases. He explained to the Committee previously finance leases were on the balance sheet however operating leases were not. He highlighted these were external leases where the Council benefits from the use of assets.

In response to a further question from Councillor de Winton, the External Auditor confirmed the accounting standard in local government was implemented the 2024//25 year.

The Committee commented on the importance of Climate Change being recognised in the report and it was explained that this was included in the Risk Register.

Councillor Devulapalli questioned the risk in relation to West Norfolk Housing Company, West Norfolk Property Limited and Alive West Norfolk.

The External Auditor explained the risk applied to all components being consolidated into the Council’s financial statements. The risk would apply to the consolidation of Alive West Norfolk in 2024/25 until the final year of full account had been done.

In response to the Chair, Councillor Ryves, the External Auditor provided further clarification on leases and added this referred to any lease where the Council is receiving a right of use asset. He identified the exceptions which included short term leases under 12 months and the asset value of the lease under £10,000.

The Assistant Director for Finance responded to a question from Councillor Ryves and explained Alive West Norfolk came back into the Council from the 1^st April 2025. He provided assurance, the External Auditors previously spoke to the External Auditors as part of their diligence work also liaised with the External Auditors of Alive West Norfolk.

Following the Committee discussing the definition of materiality, the External Auditor provided further context. He explained materiality was planning materiality, performance materiality, component performance materiality and audit difference threshold.

The Chair, Councillor Ryves, sought clarification on the risk in relation to Local Government Reorganisation and it was explained that this was currently a limited risk until timescales had been confirmed.

Councillor de Winton, referred to page 33 and sought clarification on the risk column on the financial statements and it was explained this was included in the report in accordance with standards to possibility of miss-posted transactions.

In response to the Chair, the External Auditor explained a disclaimed opinion for 2024/2025 would be expected as the auditor does not have assurance over opening balances or the comparatives reported in the 2024/25 financial statements. The Council had not published the 2024/25 financial statements by the 30 June, it would be important for the Council to produce accurate financial statements to support the rebuild of assurance.

The Vice-Chair, Councillor Nash referred to page 22, the  valuation of land and difference in value of asset and sought clarification on the significance and questioned if there was a national framework.

The External Auditor advised any valuer’s needed to comply with the RICS standards and the national framework. He added there was differences in interpretation and approaches in how assets were valued. In response to a further question from Councillor Nash, the External Auditor explained there was different assumptions as part of the valuations and each valuer has different understanding of the assets. 

The Assistant Director for Finance explained as a result of appointing a new valuer there was a difference in assumption from previous years and provided assurance that a working paper has been compiled on the valuation of assets and discussions which are being had in relation to this.

RESOLVED:  The Audit Committee are recommended to note the External Audit Plan 2024/2025.