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 2019.

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 notes the Annual Audit Letter.

Jon Roberts from Grant Thornton presented the Annual Audit Letter to the Committee. This report, which followed on from the External Audit Findings report received at the last meeting, provided a more accessible summary of the audit work carried out in 2018/19. Jon reported that it had been a very successful audit, with an unqualified opinion being issued. He added that it was very positive that the target date of 31 July had been achieved, as this had been challenging for the whole sector this year.

A small number of issues had arisen during the course of the audit, and these had been efficiently resolved thanks to the good working relationship between the external auditors and Waverley’s accountants. The first issue related to the McCloud judgement, which had implications for the entire local government pension scheme and required an amendment to the council’s accounts. The other two issues were technical matters relating to the valuation of Plant, Property and Equipment.

In relation to the fees, Jon explained that  within the audit world there had been an increased focus on certain areas, and this had resulted in the fee being higher than initially anticipated, but still lower than the previous year. The PSAA, who appointed the council’s auditors would review the fees to determine whether this change was reasonable. Graeme Clark, Strategic Director, informed the Committee that he had written to the PSAA to ask for confirmation that they were aware of the situation, and to express disappointment that they had not highlighted the emerging issues in the audit world sooner. A number of other councils would be in a similar position so it was likely that they would also raise these issues and it would be interesting to hear the response from the PSAA.

Cllr Floyd-Douglass sought some additional information in relation to the pensions issue, and the longer term impacts of the judgement. Graeme responded that Waverley, as a member of the Surrey pension fund, had asked the actuary to re-issue a set of assumptions based on the outcome of the court ruling. The timing for this had been unfortunate, but the issue was now resolved and should not reoccur.

In response to further questions from the Committee, Jon confirmed that this audit team would remain with the council for the coming year, so it would be far less rushed next time. He also advised that in terms of comparison with other councils, Waverley’s performance was towards the top end of the scale.

With reference to the External Audit Findings report considered at the last meeting, the Chairman noted that a further draft of this report had been issued on 31 July, after the meeting, and had been signed off under delegation. He queried whether this had been formally recorded. Graeme assured the Committee that this had been correctly recorded, and that the latest version of the report had been published on the website.

Overall, the Committee was very pleased with the work of both the council’s finance team and the external auditors, particularly given the short time frame.

The Committee therefore RESOLVED to note the Annual Audit Letter.