Agenda item

Update on the Audit of the 2020/21 Accounts

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

 

 

Minutes:

The Committee considered the report of the Director of Resources that provided an update for members on the audit of the 2020/21 accounts. The Chairman introduced the report and deferred to the Director of Resources to present the detail.

 

He took the Committee through the report and advised that since the last update the Public Sector Audit Appointments (PSAA) announced that only 9% of authorities had accounts audited by 30 September 2021, Covid-19 and pressures in the audit market were contributory factors.

 

As with the previous update the audit of Essex Pension Fund, which the auditors required for assurance on the Council’s pension figures, was still outstanding and no completion date was yet known. However the audit of the accounts continued and the auditors had identified a classification error with some of the covid grants. In addition the auditors had used the gross figure, which included the covid grants, to inform their audit methodology and due to the high value of the grants this had a significant impact on the outcome. The auditors now needed to revisit their approach and conduct additional testing which impacted on both time and audit fees.

 

He concluded by reporting that revised figures were now with the auditors and that they were jointly working on a revised timetable to complete the audit. 

 

In response to questions the Director of Resources advised:-

 

           That this was not a double audit, however, the usual round of checks and balances needed to be completed.

 

           That materiality was part of the methodology that set a threshold for items that the auditors were interested in. The materiality level informed the testing and reporting undertaken.

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           That a written response regarding the top slicing of the Additional Restrictions Grant (ARG) would be circulated to all committee Members following the meeting.

 

           That the overall cost of the audit was not yet known, updated figures had been submitted to the auditors and the Council was awaiting further details.

 

Councillor Jarvis expressed concern regarding the additional fees as there should have been further options offered earlier given that the issue of uncertainty in dealing with covid grants was sector wide. He asked if the auditors had a figure regarding overall costs and if the late identification of the covid grants impact, which created repeat testing work, would be taken into consideration when determining the final cost.

 

The Director, Audit & Assurance from Deloittes said they were working on the updated figures from the Council, the final cost was not known, however, on the plus side, no new audit areas had been identified. He expected robust negotiations to reach a fair fee and reminded Members that should it not be possible to reach a mutually agreed level that the fees would be arbitrated through the PSAA.

 

There being no further discussion the Chairman moved the recommendation and it was seconded by Councillor Fleming. The Chairman then put this to the Committee and it was agreed by assent.

 

RESOLVED that the report was considered.

Supporting documents: