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The committee received report ES/0887 of Councillor Maurice Cook, the Cabinet Member with responsibility for Resources, which presented the 2020/21 Indicative External Audit Plan
Councillor Cook introduced Ms Debbie Hanson, Associate Partner at Ernst & Young LLP (EY) and invited her to take the Committee through the proposed plan.
Ms Hanson stated that the accounts are currently indicative, but that EY was satisfied that the risks were adequately covered. Ms Hanson drew Members' attention to Section 1 of the strategy which was an overview of their 2020/21 audit strategy and it was noted that there were some new risks associated with the impact of Covid-19, and that there was a new auditing standard which applied to 2021 audits and would require additional work by EY.
Ms Hanson went through the areas of the report where there had been change in the level of risk, namely land and building and investment valuations due to the impact of Covid-19; the pension liability valuation due to change in asset values; the going concern disclosures; and grant income associated with Covid-19. Ms Hanson then went through the value for money section of the plan which had significantly changed compared to previous years due to a new code of audit practise. As a result, additional work was being done to gather sufficient evidence and the report would contain commentary on each risk area regardless of whether there is significant risk. Ms Hanson went through the remainder of the plan including audit materiality, scope of the audit, the EY audit team, audit timeline and independence. She concluded that EY was aiming to complete the report by the end of December 2021.
In relation to the Fee, Ms Hanson stated that there was a scale fee variation due to additional work required following the impact of Covid-19 which was not reflected in the 2020/21 scale fee. She reported that the PSAA would be writing to Members with regard to this change.
The Chairman asked what the indicative percentage range increase of the scale fees was. Ms Hanson responded that there had not been a specific percentage increase but that PSAA had set out a fee range in each area.
The Committee asked when the fees for the 2019/20 year will be confirmed. Ms Hanson responded that EY will be able to report to this meeting December on the fees as submitted to management.
The Chairman was pleased to see that the timeline for this year had been firmed up and enquired whether timelines beyond December 2021 could also be clarified. Ms Hanson responded that there was still some uncertainty due to the additional reports and work required in this years audit.
Clarification was sought on the reasons for the pension fund deficit as detailed on page 32 of the document pack. Ms Hanson responded that there was always a large movement in these accounts which was largely driven by changes in asset values. As asset values had changed so much in the past year another large change was expected.
On the proposition of Councillor Coulam, seconded by Councillor Cooper it was by a unanimous vote
RESOLVED
That having commented on the contents of the External Audit Plan 2020/21, the report be noted.