Agenda item

The report and appendices are attached.

Grant Patterson (Grant Thornton) introduced the report, stating that a draft version had previously been presented to the Committee. He highlighted the areas of the report which had been updated.

Grant Patterson confirmed that, since the last meeting of the Committee, the external auditor had completed its audit of the 2019/20 Financial Statements of both the County Council and the Pension Fund. The auditor’s report for both entities was unqualified, including an unqualified value for money conclusion. However, in both the County Council’s Statement of Accounts and the Pension Fund’s accounts, an emphasis of matter had been included in relation to material valuation uncertainties (an ‘emphasis of matter’ is added to indicate a matter which has been disclosed appropriately in the Council and Pension Fund Financial Statements but considered by Auditors to be fundamental to readers’ understanding; in this case, the potential increased volatility of property valuations).

Grant Patterson confirmed that the external audit had now been completed and, following approval of the Statement of Accounts by the Council, Grant Thornton had issued its opinion.

Grant Patterson reported that planning and interim work was underway for the 2020/21 Financial Statements Audit; a draft plan would be presented at the next meeting of the Committee. He advised that a focus on property, plant and equipment, as well as net pension liability, was likely to remain in place. However, a new code of audit practice had been issued which would see a shift away from the identification of residual risks in favour of a more holistic, narrative approach to value for money assessments. He advised that an ‘Auditor’s Annual Report’ would be produced by the end of September 2021, this would replace the existing ‘Annual Audit Letter’ arrangement.

Grant Patterson reported that remote working during the period of coronavirus meant that audits were taking longer to complete across the public and private sector. This could result in an increase in the audit fee, however, Grant Thornton would strive to offset the increased costs of remote auditing.

In response to Councillor Horner, Grant Patterson stated that local authorities were facing challenges to manage available resources across statutory and discretionary services. He commented that WCC had maintained good levels of reserves which improved the outlook, however, early decision-making to prioritise services would be required to ensure that arrangements were in place to manage cashflow effectively. The revised narrative approach to value for money assessments would help to inform this process.

Councillor Gifford stated that, given the budgetary implications of ensuring continued delivery of social care services, even a moderate reduction in overall funding could present significant challenges.

Rob Powell (Strategic Director, Resources) stated that the government’s green paper on social care funding was anticipated with interest. He commented that the Authority had a good record in maintaining services, with investment in highway maintenance and continued support for the Warwickshire Local Welfare Scheme. He advised that the Medium Term Financial Strategy would be presented to members to enable an assessment of the adequacies of funding across all areas.

Resolved:

That the Audit and Standards Committee:

a)    Notes the External Auditors’ Progress Report and Sector Update; and

b)    Notes the updated Audit Findings report for the County Council and the Warwickshire Pension Fund.