Agenda item

Audit Plan

To receive BDO’s Audit Planning report for the year ending 31 March 2021.


Mr Eagles and Ms Langridge presented BDO’s Audit Planning report, which provided Members with the opportunity to review BDO’s planned audit strategy for the year ending 31 March 2021. Reference was made to the Overview of Audit risks (Agenda page 22) in that the risks were largely the same as those previously identified.


The Chair referred to the proposed audit timeline and asked whether works would be completed by the end of September 2021 given that the fieldwork would not commence until 30 August 2021.


Mr Eagles said that there were a significant number of incomplete local authority audits outstanding from the previous two years and that, because of the impact of those audits, he considered the deadline of the end of September 2021 to be unrealistic. He said that representations had been made to the Ministry of Housing, Communities and Local Government (MHCLG) for an end of November 2021 deadline, but these had not been accepted. There was a need to discuss exact timings and put a realistic plan in place with the Council.


In response to various questions, Mr Eagles clarified that the 2019/20 Housing Benefits assurance work was a separate piece of work and that the target date for completion was the end of March 2021. He also said that staff were still dealing with the previous year’s audits at other local authorities and therefore could not be allocated in the way in which they would usually be and works could not therefore be completed within the usual timescales.


Councillor Khan asked when the Risk Register had last been reviewed by the Committee.


The Assistant Director - Corporate Services said that a Risk Register review item would be brought to the next scheduled meeting.


Councillor Khan asked how important the Annual Governance Statement was as part of the Annual Accounts. He asked Mr Eagles to confirm that the Annual Governance Statement was a significant part of the Annual Accounts.


Mr Eagles confirmed that the Annual Governance Statement was a mandatory part of the Annual Accounts and its omission would therefore be a significant issue.  He responded to further questions about the content of an Annual Governance Statement from Councillor Khan that he was not prepared to answer any questions that related to the 2019/20 Accounts.


Councillor Khan asked again for confirmation that the Annual Governance Statement was an essential part of the Annual Accounts and should be taken seriously.


Mr Eagles confirmed that this was correct.


In response to questions from Councillor Khan about possible interactions between the Auditor and the GAP Committee Chair, Mr Eagles indicated that there were currently no meetings scheduled and that any possible future meetings would be dependant on the nature of any issues encountered.


Councillor Barker declared an interest as a Member of Essex County Council and Chair of Essex Pension Fund; she expressed concerns about possible lack of audit resources and asked for some clarification.


Mr Eagles said that there were significant challenges being faced; the number of firms auditing local government accounts had reduced from seven to five, there had been significant churn around audit appointments for the 2018/19 accounts which together with deadlines being brought forward, more complex requirements and, subsequently, Covid- 19 for 2019/20 had led to what he saw as the worst position in his thirty years of auditing, with audit resource having to focus on completing earlier years’ work. He said that the MHCLG was looking to allocate a further £15 million for additional audit fees within the 2021/22 financial year.


Councillor Khan asked, in light of that information, how robust this year’s audit would be.


Mr Eagles said that the Council delivered good sets of accounts and working papers and he saw no reason for not having efficient delivery – this was not a question of robustness of audit but of timing of delivery.


Councillor Khan questioned the mechanism in place raising additional issues with the Auditor.


Mr Eagles said that he would be bringing back to the Committee a more detailed Risk Assessment in respect of Use of Resources, once guidance had been received from the National Audit Office.


Councillor Luck raised his concerns about what he considered to be an unsatisfactory situation but indicated that he would take this forward off-line.


The Chair said that this was obviously a sad situation whereby works that usually started in February would not be starting before August. He thanked the BDO Auditors for their contribution.


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