Issue - meetings

REPORT OF KPMG

To receive the Audit Plan for 2023/24.

RESOLVED:That the draft Audit Plan for 23/24 was noted.

REASON FOR DECISION:To enable the Committee to be provided with the outlined approach by KPMG to the audit of the Council’s financial statements for the year ending 31 March 2024.

Audio recording – 28 minutes 38 seconds

Jessica Hargreaves KPMG, introduced the report titled ‘External Audit Plan & Strategy 2023-24’ and highlighted that:

·       This was the first year that KPMG had audited the Council and the report contained the plan and strategy.

·       Work was unable to commence on the financial statement 2023-24 until the audit for 2022-23 had been completed, however planning and risk assessment work had commenced. KPMG would be ready to commence the 2023-24 audit when Ernst and Young had completed the 2022-23 audit.

·       Materiality levels would be set at an expected limit of 3% of the forecasted expenditure, namely £1.85M, and items above this limit would be required to be changed by Council following any discussion and debate.

·       A triviality threshold had been set at £92,500, which was calculated as 5% of the materiality threshold, any differences identified above this limited would be highlighted in the year-end report to the Committee.

·       The report identified four significant risks and these were detailed on page 43 of the report.

·       The valuation of land and buildings was considered as a significant risk due to the estimation and assumptions of the valuation. Work was ongoing to understand the methodology underpinning the valuations and the supporting data.

·       The valuation of investment properties was identified as a significant risk as there were a different set of assumptions used depending on the different classifications of each property.

·       The management override of control was recognised as a significant risk on all KPMG audits, and focused on journal entries on the general ledger system and that these were relevant and appropriate.

·       The valuation of the Pension Scheme was the last identified significant risk, due to the valuation and estimates applied.

·       The consideration of fraudulent revenue risk was required by the Professional Standards but had been rebutted due to the nature of income of the Council.

·       The approach for the Value for Money reporting was outlined on page 55 of the report and differed slightly from the approach of Ernst and Young.

·       Key members of the audit team and an anticipated timetable to complete the audit was listed on page 57 and 58 of the report.

·       A confirmation of independence was noted on page 61 of the report.

·       KPMG had been asked to undertake a Housing Benefit Grant Certification, and discussions had commenced regarding this matter and the fees associated with the work.

·       This was a draft plan and was awaiting confirmation after a consultation.

In response to a question from Councillor Sean Nolan, Ms Hargreaves advised that there was a benchmark range for the entity materiality measure and the 3% level was within this range.

Councillor Vijaiya Poopalasingham proposed and Councillor Paul Ward seconded and, following a vote, it was:

RESOLVED:That the draft Audit Plan for 23/24 was noted.

REASON FOR DECISION:To enable the Committee to be provided with the outlined approach by KPMG to the audit of the Council’s financial statements for the year ending 31 March 2024.