Agenda item

To consider the report of the Director of Resources, (copy enclosed).

TheCommitteeconsidered thereport ofthe Director ofResourcestogether with the External Audit Planning report to March 2021 fromDeloitte LLP, the Council’sExternal Auditor attached at Appendix 1.

TheChairmanintroduced the report and deferredto theAuditPartner from Deloitte LLP to present thedetail. The Audit Partner commenced by reminding Members that the work he carried out was in accordance with the Code of Audit Practice and supporting regulations which were published by the National Audit Office (NAO).  The scope of the work included the audit of the accounts along with being satisfied that the Council had made proper arrangements for securing Value For Money (VFM).  There had been significant changes to the code with respect to VFM which were set out in detail in the report.  The materiality level used had been set on a consistent basis as in previous years and all areas over £60,000 were reported.  He said that the pandemic had continued to impact the audit in terms of the risk profile as well as the way it was conducted and this was also detailed in the report.

There were two significant risks focussed on this year, the first was management override of controls, areas focussed on were preparation of accounting estimates, looking at inappropriate journal entries and transactions with no economic substance. The second was the recognition of Covid – 19 related income.  There were a number of new grants with significant value that were accounted for in different ways. Additional areas of focus included pension liability and the valuation of property, plant and equipment..

The Chairman then moved the recommendation and this was seconded by Councillor Nunn.

In response to questions Officers provided the following information:

• That the pension scheme was administered by Essex County Council (ECC) and the Local Government Pension Scheme (LGPS) made the investment decisions. However, pension figures provided by ECC to Maldon District Council were impacted by those LGPS decisions. It was therefore imperative that the figures were audited to ensure they were correct as they constituted a large net liability on the Council’s balance sheet..

• That in respect of the External Auditor’s fees a number of discussions had taken place with the External Auditors and a briefing note circulated to all Members of the Committee. The scale fees were set some years back subject to fee variations and due to the nature and increases in audit requirements which had been substantial, those scale fees had seen a lot of increase. The current fees had been reduced through initial discussions. Once the Audit had been  concluded the Auditor would submit the fees to the Public Sector Audit Appointments Limited (PSAA) who will review and give judgement on those. They will also liaise with the Council so we can put our views across. The PSAA benchmark across all local authorities’ audits but the actual fee will not be agreed until the audit has been completed.. The Briefing Note will be re-circulated.

• That those uncorrected misstatements reported related to last year’s accounts,  they were below materiality, so no adjustments. The Valuation of the office related to the overflow carpark where there was a double count including the carpark twice.  That in terms of the Mc Cloud Judgement, which related to the pension scheme, there was a late adjustment to the original pension value but because of the size of the scheme and the fact it was an estimate, this was not adjusted when subsequent information was received from the actuaries around the impact of the Mc Cloud judgement on the scheme.

There being no further queries the Chairman put the recommendation to the Committee and it was agreed by assent.

RESOLVED by assent that the Committee considered the External Audit Planningreportasshown in appendix 1.