Agenda item

Agenda item

External Audit Progress Report and Sector Update

Report by Grant Thornton, (attached).


The Committee considered a report by Grant Thornton (circulated previously) regarding the External Audit Progress Report and Sector Update.


Mr Peter Barber, representing Grant Thornton, updated the Committee with the following:


·         This progress report was presented at every meeting and reported on progress made against the plans for the year which had been presented to Committee at the March 2020 meeting

·         Since the last Committee meeting in March 2020 testing work had been completed

·         Deadlines had been extended as a result of challenges faced due to the Covid-19 situation and North Devon Council now had until the end of August 2020 to produce its draft accounts and Grant Thornton now had until the end of November 2020 to sign them off

·         After discussions with officers it was agreed the draft accounts would be produced by the end of July 2020 with Grant Thornton undertaking some virtual testing of those accounts in August prior to the main audit during September 2020

·         Value for money conclusion work was underway

·         The Housing Benefit audit was to begin 10th June 2020 and would involve screen sharing for virtual assessments to begin in that area

·         Department of Work and Pensions had allowed an extension to the deadline for final subsidy claim to January 2021


The Chair asked if a correction to the wording on Page 43 of the report was needed and Mr Barber confirmed the wording should be amended with the addition of the word ‘not’ so the sentence under the conclusions and recommendations for early substantive testing should read as follows:


“Our testing to date has not identified any issues that we need to bring to your attention.”


RESOLVED that the External Audit Progress report update be noted.


Mr Barber then updated the Committee on the Sector update of the External Audit Progress report as follows:


·         Significant risks had been highlighted with an additional risk having been added due to the Covid-19 situation around things like volatility in the financial markets

·         Challenges around the value of assets held by the Council would be considered

·         The going concern assumption would be put forward early with discussions between Grant Thornton and North Devon Council

·         Grant Thornton were not minded to alter the materiality figure when signing off the accounts


In response to a question on the latest situation regarding grants from Central Government being made available to local authorities and if this was a concern for auditors.  Mr Barber advised that he was not aware of any extra funding being imminently available.  His advice would be to continue assessing the situation and the impact of levels of funding and model the effects on budget.  Financial planning would become even more prudent with the best course of action to be decided on as a result of this planning.


In response to a question on what North Devon Council were doing to obtain additional funding, the Head of Resources replied with the following:


·         Monthly financial returns from all authorities were sent to Central Government so they were aware of the financial situation North Devon Council were in

·         Engaged with Central Government last week around our position.  The Council was not alone in this situation and that our levels of reserves, for the size of Council we were, were healthy

·         The pressures faced moving forwards were the same as other authorities

·         Talks with Treasury were underway with Central Government regarding future tranches of funding

·         All members would be kept up to date as and when information was made available to the authority


The Chief Executive gave a further update to Committee on what steps were being taken to obtain certainty on further funding as follows:


·         North Devon Council was actively lobbying Government which was being raised through the Local Government Association (LGA), the local MP as well as directly through to Central Government.

·         The previous funding provided had been awarded based on the population size or per capita

·         It was preferred that Central Government looked at the individual needs of the local population and its local area and based its future funding awards on that

·         This message was received with sympathy by Central Government and it was hoped would be considered

·         The Treasury were overloaded with requests for additional funding which was hoped wouldn’t be ignored


In response to a question on levels of council tax recovery and whether recovery rates were lower as a result of the Covid-19 situation the Head of Resources gave the Committee the following response:


·         April to May 2020 council tax recovery levels were similar to last year

·         The Furlough scheme had meant individuals were still in receipt of an income and so currently able to pay bills

·         Business grants paid out had also helped local businesses

·         The real impact of people being able to afford to pay bills would hit later on as the Furlough scheme started to wind down.

·         Forecasting had made allowances for the impact of a reduction in recovery rates in later months


RESOLVED that the sector update be noted.



Supporting documents: