Richard Anderson (Grant Thornton UK LLP) presented the Progress Report and Sector Update. Audit planning has begun for 2020/21 and this involves initial discussions with officers, internal audit reports and a review of minutes from Council and Committee meetings. The interim audit work will take place in March 2021.
On 1 April 2020, the National Audit Office introduced a new Code of Audit Practice which comes into effect from audit year 2020/21. The Code introduced a revised approach to the audit of Value for Money. (VFM) There are three main changes arising from the NAO’s new approach:
• A new set of key criteria, covering financial sustainability, governance and improvements in economy, efficiency and effectiveness
• More extensive reporting, with a requirement on the auditor to produce a commentary on arrangements across all of the key criteria, rather than the current ‘reporting by exception’ approach
• The replacement of the binary (qualified / unqualified) approach to VFM conclusions, with far more sophisticated judgements on performance, as well as key recommendations on any significant weaknesses in arrangements identified during the audit.
Members were then advised of the Audit Deliverables, with the Annual Audit Letter to be presented at the next Audit Committee, and the Audit Fee and Plan due March 2021.
The Redmond Review was then discussed with members being advised of the key recommendations from the report which include
• A new regulator - the Office of Local Audit and Regulation (OLAR) to replace the Financial Reporting Council’s (FRC) role and that of Public Sector Auditor Appointments (PSAA)
• Scope to revise fees - the current fee structure for local audit be revised to ensure that adequate resources are deployed to meet the full extent of local audit requirements
• Move back to a September the deadline for Local Authorities
• Accounts simplification - CIPFA/LASAAC be required to review the statutory accounts to determine whether there is scope to simplify the presentation of local authority accounts
One of the recommendations was for local authorities to implement:
The governance arrangements within local authorities be reviewed by local councils with the purpose of:
• an annual report being submitted to Full Council by the external auditor.
• consideration being given to the appointment of at least one independent member, suitably qualified, to the Audit Committee; and
• formalising the facility for the CEO, Monitoring Officer and Chief Financial Officer (CFO) to meet with the Key Audit Partner at least annually.
Members asked questions in relation to the Redmond Review on value for money, and how the Audit Committee can implement any recommendations.
The Monitoring Officer explained to members that the statutory officers will be reviewing the Redmond Review and its implications and will report to Audit Committee.
Debate then ensued in relation to the recommendations from the review.
Members were then advised that the Annual Audit Letter will be replaced by an Annual Audit Report, which will be more complex, more involved and will lead to better quality working achieving more impact.
Further questions then followed from members in relation to ‘kick start housing’ and local government re-organisation.
Members noted the contents of the report.