Agenda item

The attached Annual Audit Letter, produced by Grant Thornton, summarises the key findings arising from the work they have carried out at Waverley Borough Council for the year ended 31 March 2017.

The Letter provides a commentary on the results of Grant Thornton’s work to the Council and its external stakeholders, and highlights issues they wish to draw to the attention of the public. 

Recommendation

It is recommended that the Audit Committee receives and comments on the Annual Audit Letter from Grant Thornton.

Iain Murray from Grant Thornton presented the Annual Audit Letter 2016/17 to the Committee. The Letter provided a summary of the messages that the Committee had received at its meeting in July and didn’t include any new information. The key areas to draw out were that the Council had successfully delivered its final accounts in accordance with the earlier timetable and that Grant Thornton had issued an unqualified Value for Money conclusion.

Cllr Gray, who had discussed the report with Cllr Mulliner prior to the meeting, noted that the level of materiality was £1,629k, which was 2% of the Council’s gross revenue expenditure, and felt that this was quite high. Iain Murray responded that Grant Thornton used a number of thresholds to drive their audit work and this included setting a materiality benchmark. 2% was the highest level of materiality they set and this reflected the Council’s good track record. Anything above the lower threshold of £81k would be reported to the Audit Committee in the Audit Findings Report; and anything below this would be considered trivial. Cllr Hyman asked how the lower threshold was calculated and Iain responded that this was 5% of the materiality figure.

In relation to the risks that had been identified in the 2016/17 audit plan, Cllr James asked how the valuation of plant, property and equipment was undertaken. Graeme Clark responded that the Council had three qualified valuers and so most of this work was done in house. If any specialist valuation was required then this would be procured on an ad hoc basis.

Cllr Hyman queried whether the ongoing audit into Waverley’s Air Quality reporting would affect the Letter. Graeme Clark responded that if any governance issues were identified in the investigation then these would be reported through the Annual Governance Statement process. The audit was being undertaken by an independent auditor and the findings would be shared with Grant Thornton in due course. They would then decide whether this needed to be taken into account when preparing their Annual Audit Letter for 2017/18.

The Committee also noted that Homes and Communities Agency Compliance Audit was new for 2017/18 and queried how this had come about. Graeme Clark responded that the Council had received a financial contribution from the HCA for the development at Wey Court and a requirement of this was that the Council commission a third party audit. Iain Murray added that the low fee for this work was indicative of the minimal work involved.

Iain Murray also presented a progress report which updated the Audit Committee with the most recent progress on the 2016/17 and 2017/18 audits. The Trust Accounts Audit was complete, as was the HCA Audit. The Audit of Housing Receipts was ongoing, and a delay had been caused due to awaiting the terms of reference from DCLG. The Certification of Housing Benefits was on track to be delivered by the end of November. Grant Thornton was just starting to plan for the 2017/18 Audit and an initial timetable was set out in the report. The rest of the document signposted the Committee to useful publications for information.

Cllr Seaborne asked whether Waverley had access to the CFO Insights tool referred to in the report. Graeme Clark responded that the Council didn’t have a subscription but did receive free alerts, and Waverley did subscribe to a CIPFA technical service instead.

The Committee RESOLVED that the Annual Audit Letter 2016/17 be received and the Grant Thornton Progress Report be noted.