Agenda item

Adur District Council and Worthing Borough Council Audit Results Reports

To consider a report from the External Auditors, copies attached as item 7.


Before the Committee were 2 reports from the External Auditors, copies of which had been circulated to all Members and copies are attached to the signed copy of these Minutes as Item 7.


Helen Thompson, Stephan van der Merwe and Aphiwe Dudeni attended the meeting to present the Audit Results Reports of the External Auditor. 


The areas of audit focus including misstatements due to fraud or error; inappropriate capitalisation of revenue expenditure; valuation of Land & Buildings in Property, Plan & Equipment (PPE) under Existing Use Value (EUV) and Investment Properties (IP) under Fair Value (FV); Valuation of Land & Buildings in PPE under Depreciated Replacement Cost (DRC); Pension Liability and Asset Valuation; Going Concern and Accounting for Covid-19 related government grants were considered during the presentation of the reports. 


It was noted that the Audit Fees for Adur and Worthing were determined by public sector audit appointments who set the fee for the year. When there are additional fees arising during the year, there is a process to determine the scale through variation. Since the last meeting of the Committee, the PSAA had finally determined the fee for the 2019/20 audit. In Adur the additional fee was £23,662 and for Worthing, the additional fee was £24,712. The assessment of fees for 2020/21 had not been completed for Adur or Worthing because the work was still ongoing. An additional minimal core fee had been announced by the PSAA, covering the areas of value for money and accounting estimates. This would be taken into account when setting fees. 


In terms of value for money, it was a new code of audit practice that would impact the 2020/21 financial statements and the auditor's opinion there on. A value for money conclusion would not be issued, instead an initial assessment would be undertaken to assess whether there were any risks of significant weakness. The Auditors had concluded that there weren’t. Therefore the Auditors Annual report, which will include a commentary on value for money arrangements, would be produced in due course, once the audit had been completed and an opinion issued.


A member questioned why the auditors had not received the NAO instructions on the ‘Whole of Government Accounts’ for 2020/21. The external auditor advised that it was not the NAOs fault. The reason for the delay in the Whole of Government Accounts was that HM Treasury had not as yet issued the guidance and the detailed data collection tool that the Councils will need to complete in order to assist with the preparation of the Whole of Government Accounts. It was effectively a mechanism where the set of statements the Committee had seen was effectively turned into consolidation schedules, so that the information was presented in a different way before being sucked up into a statement to set out what the Whole of Government Accounts position was. The latest position was that HM Treasury had not issued any information, they may do by the end of February. For the Councils, there was limited audit work. The finance team will complete the schedules, the auditors would then complete a check to ensure that the Councils are under the threshold, which was usually set at around £500m of either assets, liabilities or income & expenditure, before issuing an assurance certificate to the NAO. The auditors would only flag something if they had concerns e.g. if the auditor had qualified the accounts.                 


Consideration was also given to the valuation of HRA properties, the going concern of the Councils, an audit difference concerning pension liability with an uncorrected misstatement of £492k and the letters of representation.     




The Joint Governance Committee noted the contents of the reports.


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