The Engagement Lead – Grant Thornton presented the External Audit Plan 2020/21 and in doing so Members’ attention was drawn to the following:
· Group Audit - The significant risks that had been identified as requiring special audit consideration included; valuation of land and buildings, staffing within the finance department and the new financial ledger implementation.
· Value for Money Arrangements – Medium term financial plan, risk management, performance management reporting, and how the Council measured benefits realisation for commissioned or procured services, had been identified as risks and weaknesses. It was explained to the Committee that mitigations had been put in place to address all of the above risks and weaknesses in terms of value for money arrangements.
Following the presentation, the Executive Director of Resources reported that this was considered to be a sound audit plan. It was acknowledged that there had been challenges experienced in the Finance team particularly around recruiting to vacant positions. However, there was another round of recruitment planned in order to provide permanent resource to the team. Members were informed that there had been some difficulty in producing quality working papers which had impacted the time it had taken in processing, and that this had resulted in an increase in audit fees. Members were notified that there had been an increase in the amount of scope undertaken by auditors as a result of the changes to the National Audit Office (NAO) code which would also inevitably result in an increase in future audit fees.In respect of the closing down of the accounts it was confirmed that for year ending 2020/21 the close down would be in July 2022 and shortly after for the year 2021/22. Although this had resulted in a delay to the timetable it was clarified to Members that this was not unusual and that many local authorities were experiencing similar delays.
Members were particularly interested in the recruitment difficulties experienced within the Finance team and it was explained that increases of pay within the private sector had meant that it was more difficult for public sector organisations to compete. In addition to this, it was highlighted that the Covid-19 pandemic had impacted on the way people worked,resulting in a more hybrid model of working which had enabledpeople to take on jobs in largercities, with increased pay, without having to travel to the office every day. It was confirmed to Members that the challenges experienced in recruitment had certainly impacted on the financial monitoring over the previous year and had caused a backlog in this area. However, it was expected that this would be rectified very shortly once the issues experienced with the cash receipting system had been remedied and regular reporting would begin again. Some Members queried the use of temporary staff to fill the vacancies and the impact this had made on the budget. It was reported that there had been greater use of temporary staff during this period, and this would decrease oncepermanent members of staff were recruited. The Committee were further informed that despite the increased use of temporary staff the amount paid for their services did not meet the amount saved in permanent vacancies due to vacant positions.
Further discussion followedregarding the risk surrounding fully depreciated assets, including vehicles, plant and equipment as reported in the Audit Plan. The Interim Head of Finance and Customer Services (Deputy s151) explained the process regarding the disposal of assets from an audit perspective and confirmed that management would be undertaking a review of these assets as part of the closedown next year.
the Audit Opinion Plan 2019/20 be noted and agreed.