Meeting documents

The Chair invited Mr Davies, of Grant Thornton, to introduce these reports that provided the Committee with an overview of the planned scope and timing of the statutory audits of the Council and the Pension Fund.

He began by noting that the significant risks, those requiring special audit consideration to address the likelihood of a material financial statement error, had been judged to be in line with last years and had not changed. He explained that materiality had been assessed at £12.3m as this was 1.5% of the gross expenditure for the year, any figures above the threshold set for triviality, of £0.615m, would be included in the audit findings report.

On the value for money arrangements, he highlighted those 3 areas that had been identified as risks and those were: ongoing concerns around financial stability; children’s services (SEND) and progress against the action plan; and local government reorganisation in Somerset. He noted that the annual audit report had to be completed within 3 months of the issue of the audit opinion and he hoped that both reports would be completed by the end of November. He referred to the audit fee and noted a more detailed breakdown was provided on page 182.

There was a question about the audit fee given that some of the proposed work would need to be more detailed and yet the fee would be reduced and in response members noted that last year there had been much additional and unexpected work (on property, plant and equipment) that had to be charged to the audit fee and it was not envisaged this would be the case this year, hence the reduced fee.

On the topic of management override of controls and journal entries and the previous recommendation of external auditors for there to be a second person sign off the Director of Finance explained that there had been a high-level review of all significant journals to provide more assurance, however it would be for the auditors to review, and the Council would respond. The Chair noted that he would discuss this issue with the Director of Finance outside of the meeting. 

Regarding the proposed audit plan for the Pension Fund, Mr Davies noted that that the significant risks, those requiring special audit consideration to address the likelihood of a material financial statement error, had been judged to be: revenue and expenditure recognition; management of override controls; and valuation of level 3 investments. He noted that the materiality figure for the Pension Fund had been corrected since the report had been written and was now £26.1m, this was due to an increase in the value of the Fund.

The Committee accepted the reports and approved the proposed 2021/2022 Audit Plans for the Council and the Pension Fund. 

The Chair invited Mr Davies, of Grant Thornton, to introduce these reports that provided the Committee with an overview of the planned scope and timing of the statutory audits of the Council and the Pension Fund.

He began by noting that the significant risks, those requiring special audit consideration to address the likelihood of a material financial statement error, had been judged to be in line with last years and had not changed. He explained that materiality had been assessed at £12.3m as this was 1.5% of the gross expenditure for the year, any figures above the threshold set for triviality, of £0.615m, would be included in the audit findings report.

On the value for money arrangements, he highlighted those 3 areas that had been identified as risks and those were: ongoing concerns around financial stability; children’s services (SEND) and progress against the action plan; and local government reorganisation in Somerset. He noted that the annual audit report had to be completed within 3 months of the issue of the audit opinion and he hoped that both reports would be completed by the end of November. He referred to the audit fee and noted a more detailed breakdown was provided on page 182.

There was a question about the audit fee given that some of the proposed work would need to be more detailed and yet the fee would be reduced and in response members noted that last year there had been much additional and unexpected work (on property, plant and equipment) that had to be charged to the audit fee and it was not envisaged this would be the case this year, hence the reduced fee.

On the topic of management override of controls and journal entries and the previous recommendation of external auditors for there to be a second person sign off the Director of Finance explained that there had been a high-level review of all significant journals to provide more assurance, however it would be for the auditors to review, and the Council would respond. The Chair noted that he would discuss this issue with the Director of Finance outside of the meeting. 

Regarding the proposed audit plan for the Pension Fund, Mr Davies noted that that the significant risks, those requiring special audit consideration to address the likelihood of a material financial statement error, had been judged to be: revenue and expenditure recognition; management of override controls; and valuation of level 3 investments. He noted that the materiality figure for the Pension Fund had been corrected since the report had been written and was now £26.1m, this was due to an increase in the value of the Fund.

The Committee accepted the reports and approved the proposed 2021/2022 Audit Plans for the Council and the Pension Fund.