Issue - meetings

Members considered the 2020-2021 External Audit Strategy from the External Auditors, Mazars.

As an introduction, Mazars highlighted the planned fees for the audit, including the additional fees.  The independence and objectivity of the audit approach was confirmed within the report.  It was expected that the audit would be complete by the end of September 2021; in addition, it was likely that the audit would be carried out remotely as it was in 2020.  Further information was highlighted as below:

·         Significant audit risks were detailed at section 4 of the report; the enhanced risks were the same as in previous years.  There had been one none-audit piece of work carried out by Mazars for West Lindsey District Council on housing benefit subsidies.  Mazars were satisfied that this work did not represent a conflict of interest for them;

·         The new Annual Auditor’s Report replaced its previous iteration, the Annual Audit Letter;

·         There was a new code of practice for 2021.  One of the main changes related to Value for Money (VfM) work.  Also under the new code of practice there would be a disappearance on a binary conclusion, which would previously have been a ‘qualified’ or ‘unqualified’ opinion.  This would be replaced by a narrative commentary which could cover financial sustainability, good governance and effectiveness.  This new narrative would require more input from internal management and Mazars;

·         It was now required that weaknesses be reported as soon as they were identified rather than waiting for the end of the audit cycle.

Members then asked questions of the External Auditors.  Further information was highlighted:

·         The 25% additional grant funding from government was offered with the aim of recognising the upward pressure on audit fees.  This 25% extra funding was a general fund based on assumptions;

·         The information would be presented in a different way as the code of audit practice was refreshed every five years and led to updated guidance for auditors.  This refresh was an opportunity to enable and encourage findings in auditors’ work;

·         In the long-term auditors could qualify their opinion on the group accounts if they felt that there were assets, liabilities or other elements of turnover which weren’t fairly reflected.  However, before this stage were reached there would be discussions with internal management on any issues with single entity accounts, as well as a second stage of reporting to the Governance and Audit Committee.

The policy around Minimum Revenue Provision (MRP), and the transactions between the Council and the staffing agency would be examples of variations from audit guidance, but were fully transparent, and taken on an annual basis.

The report was moved, seconded, and following a vote it was RESOLVED to approve the External Audit Strategy Memorandum Plan for 2020/2021.