Agenda item

To update Members on Grant Thornton’s progress as at January 2015 in delivering their responsibilities as the Council’s external auditors. 

(Report attached)

Members received an update report from Grant Thornton on the external auditor’s progress in delivering their responsibilities to the Council.  The report also included a summary of emerging national issues and challenge questions in respect of those emerging issues.

The external auditors advised that they had not yet started the main work on the 2014/15 audit of accounts.  The audit plan for this would be brought to the next meeting of the Committee and initial work on the Value for Money conclusion would start during their interim visit.  Work on the 2014/15 final accounts audit was planned for July to September, with the majority this due to be undertaken in August.   

The external auditors went on to provide explanations of their national reports.  The Audit Commission was due to be abolished on 31st March 2015.  Grant Thornton were currently in the second year of their 5-year external auditor contracts, and at the end of the 5 years the Government would need to make a decision regarding subsequent contracts.

The issue of long-term public sector sustainability was discussed.  Whilst local government had responded well to the medium-term challenges and first period of austerity in the face of ever increasing funding, demographic and other challenges meant that they would be tested significantly by the second phase of austerity.  The external auditors stated that it was important for authorities to think ahead and that there were other councils who were currently in a far worse off position than Redditch Borough Council.

The significant differences in the scale of funding reductions faced by different authorities were noted.  The external auditors explained that the authorities most affected were the larger authorities, some of which received 70% grant funding from central government.  Other smaller authorities received 70% of their income from Council Tax, meaning there would be significant differences in how government cuts impacted on authorities. 

In response to a Member query Officers provided a general breakdown of income received by the authority and were asked to circulate the exact figures in this regard, setting out the amounts and main income categories, after the meeting.

The external auditors highlighted the Local Government Audit Committee Member Network event which was taking place on Wednesday 25th February 2015, the theme of which would be Governance Challenges and Priorities for 2015.  The session would cover financial integrity, reinforcing audit quality, improving information quality and focusing on assurance, all of which were key roles for an effective Audit Committee and which all members of the Committee were welcome to attend.        

In response to a Member request the external auditors agreed to in future include an additional column in their update reports to record any progress and relevant action dates against the five recommendations arising from their work as detailed in the Annual Audit Letter at agenda item 7. 

RESOLVED that

1)            Grant Thornton’s update report be noted; and

2)            Grant Thornton in future include an additional column in their update reports to record any progress and relevant action dates against the five recommendations arising from their work as detailed in the Annual Audit Letter for the year ended 31st March 2014.