Report by Grant Thornton (attached).

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

The External Auditor confirmed:

·         The report set out the progress made against the 2019-20 audit. The findings had been presented in October 2020 and now, only a few items were outstanding.

·         Progress had been made and many items cleared. 

·         The final Letter of Representation, the Draft Accounts, and the Annual Governance Statement had all been signed.

·         Still outstanding were completion of work on PPE and Investment Properties, receipt and review of the letters of assurance from the Devon County Council (DCC) Pension Fund Auditor.  These were also being waiting on by other Devon Authorities.  DCC were hoping to issue these by the end of November 2020.

·         The Value for Money conclusion was expected to be that of ‘Unqualified’.

·         The Housing Benefit Subsidy Claim work was ongoing. Additional ‘40+’ testing was being carried out by the Benefits Officers. When this was completed it would be reviewed. The auditors intended to complete this work by the original 30^th November 2020 deadline.  It was noted that the Department for Works and Pensions (DWP) had extended the deadline to 31^st January 2021.  The findings would be presented to the Committee in the Certification Letter in January 2021.

·         The Report included information on the Redmond Review which discussed the effectiveness of local audit; suggesting the creation of a new regulator, and re-assessment of fees.  The review also made reference to the possible streamlining of the Annual Accounts as the information required from LAs had increased.  The Auditor noted that as accounts were so complex any such action would require legislation change.  The review also suggested the appointment of an independent person to Audit Committees.  Not necessarily a Councillor, but someone with relevant business or financial experience.

The report contained additional articles in relation to the Sector Update, Code of Audit Practice and Revised Approach to Value for Money Audit Work, Local Government Reorganisation in Two-Tier Shire Counties,  along with a number of reports relating to Covid-19 and economic recovery

In response to questions from the Committee, the External Auditor confirmed that:

·         The target to sign off the audit was the end of November 2020.  The DCC Pension Fund Auditor (who was also a Grant Thornton employee) would provide their reports by that target date although were unable to give a definitive date currently.

·         Some Committees had appointed one or even two independent members.  There was the opinion that the skill set of Audit Committee Members varied across the country and that the addition of an independent person could facilitate change and bring additional knowledge and ideas from a different perspective. The challenge however was the ability to attract people with appropriate skills to the role.

·         The Auditors regularly met with the Chief Executive and the Head of Resources and the reports would come to this Governance committee. The report could however be presented to Full Council if required.

·         There were no penalties if the audits were not signed off by the deadline, although the LA would have to publish the reason(s) for the delay.  If the reason was the delay of the DCC Pension Fund report then there would be other LAs with the same issue.

The Chief Executive echoed the issues in appointing independent people to committees and suggested that the LA’s Monitoring Officer could attend.

RESOLVED that the External Audit Progress Report and Sector Update be noted.