Agenda item

The report and appendices are attached.

Mr Ciaran McLaughlin (Key Audit Partner, Grant Thornton) introduced the published report and identified a series of highlights from it. The committee was informed that the work is substantially complete, that no modifications are required, and it is planned that an unqualified opinion and certificate will be issued. The work that continues involves the valuers and the need for more information concerning the matrices used by them. Value for money work will be completed in November with a view to the final report being presented to Council in the middle of December 2021. It has not been necessary for the auditors to exercise their powers and there has been plenty of support provided by officers in the finance team.  

There is nothing to report or update on concerning standard risks around revenue and expenditure, but discussions are ongoing concerning the valuation of land and buildings.  

Some control weaknesses have been discovered around ICT (Page 187 of the document pack) but these are not considered to be material.  

The auditors have maintained their independence and followed the Financial Reporting Council’s Ethical Standard.  

Audit adjustments have been made as indicated on page 202 of the document pack and the final fee will be in line with what was expected.  

In conclusion an unmodified opinion has been reached and the Letter of Representation will be issued with no additions.  

The Chair thanked Grant Thornton for its work.  

Rob Powell updated the committee on the ICT control risks identified in the report. Two have been closed off with another expected to be so by the end of November. At least two of the remainder will be so treated by the end of the financial year. The committee was informed that these are not new issues. Rather they had not been picked up in previous years when the issue received a lighter touch review.  

In reply to a question from Councillor Chris Kettle the committee was informed that the adjustment to the pensions liability as reported on page 186 of the document pack was required owing to the information not being available when the draft Accounts were produced. The increase reported is good news for the pension fund. Andy Felton added that consideration is being given to whether the information can be obtained sooner in future years.  

Regarding the Value for Money report the committee was assured that this will be completed by the end of November. 

The committee discussed an issue that remains outstanding from 2017/18. The Chair stated that he recalled being informed that this matter had been resolved. In response the committee was told that the matter has been resolved and the final statement of reasons is currently going through the approval process.  

Members asked whether, given that there remain some outstanding issues, the Audit Findings Report can be endorsed or whether a further meeting would be required. Andy Felton advised that if any material issues are revealed at a later date it may be necessary to meet to discuss them. It will be a case of waiting to see what transpires.  

Councillor Bill Gifford expressed some reservations over the work being undertaken around the valuation of land and buildings. The committee, he said, has been told that the work has yet to be completed but is progressing well. Concerning the process followed for the valuations Jim McLarnon stated that Bruton Knowles, the Council’s property valuer has been asked to clarify the basis of the valuations. A sample has been selected based on market data. It was acknowledged that the current Pandemic presents a false picture although in practice the revaluation of a school is of little interest to most people.  

Councillor Sarah Feeney asked for a position statement on the Value for Money work. She was informed that this has commenced with no significant risks being identified to date. There is now a need to progress more detailed work.  

Concerning the Letter of Representation Virginia Rennie provided assurances that prior to it being signed, the entire process will be checked by actuaries and quality assurance experts as well as the Council’s in house Legal experts. It is important to ensure that nothing significant has changed since the end of March 2021.  

Councillor Chris Kettle expressed some concern over the responsibility being placed on the Audit and Standards Committee to approve the accounts. The committee, he said, does not comprise financial experts but the auditors place the onus onto the committee. By way of reply the Chair stated that the letter will be signed by Rob Powell and by Councillor Peter Gilbert in his role as Chair of Council. In addition, Andy Felton assured members that the accounts are subject to a rigorous process of checking with Virginia Rennie, Andy Felton and Rob Powell undertaking the final quality control. Councillor Kettle commended the Council officers for their diligence but wondered whether it should not be for the auditors to take that final responsibility. It was further clarified that the need for Audit Committee sign off is dictated nationally and not something imposed by the Auditors. 

Rob Powell indicated that he was comfortable with signing the letter and reminded the committee that the auditors and officers of the council can all be challenged if necessary. He was not minded to revise the letter at this stage but suggested that this could be looked at in 2022.  

Resolved:

That the Audit and Standards Committee:

1) Endorses the Audit Findings Report of the External Auditors for Warwickshire County Council, attached at Appendix A.

2) Approve, subject to any changes which may be necessary to the final draft,

the wording of the Letter of Representation, attached at Appendix B.