The Committee considered the Statutory Accounts and Pension Fund 2019/20 - External Audit Progress Report.
Helen Lillington from Grant Thornton, the Council’s external auditor introduced the report and made the following points:
· As a result of the Covid 19 pandemic, the timetable for the completion of the Accounts had been pushed back to the end of November. Both the Grant Thornton and Council’s Finance teams had worked well together and largely stuck to the original timetable albeit a couple of weeks later than planned which was a huge effort in the circumstances. The bulk of the field work had now been completed
· Property, Plant and Equipment had been a major focus of the work and where the most accounting errors had been identified albeit none were material so there would need to be an adjustment in the accounting notes
· Undertaking the audit of the accounts remotely had been a particular challenge with significantly increased the number of queries generated through emails and other means
· The bulk of the Pension Fund audit work had also been completed. There were issues around the right level of assurance to be given to the Fund bearing in mind uncertainties as a result of the Covid 19 pandemic and its impact on the valuation of the Fund at year-end.
In the ensuing debate, the following points were raised:
· The Chairman and members of the Committee expressed their gratitude to Grant Thornton and the Council’s Finance Team for their efforts in ensuring that the Accounts were kept as near as possible to the original timescale despite the impact of the pandemic
· The percentage of audit work that had been completed remotely was queried and whether remote working practices would be adopted in the future and consequently any potential cost savings in terms of the annual fee. Helen Lillington anticipated that the audit work would be completed 100% remotely using the available technology, particularly screen-sharing. This was not the most efficient way of undertaking the work and although travelling time had been saved, overall the audit process was taking longer to complete. The main issue had been satisfying the Regulator that the documents received electronically had not been manipulated which added another layer of work. A lot of the work was better achieved face-to-face although she did anticipate that a blended approach would be used in the future and that certain aspects of the audit work would continue to be undertaken remotely. Therefore, she did not consider that there would be a reduction in the fee. There would however be a change to the Value for Money conclusion which would have an impact on the fee
· It was important for the Council to understand the reason for additional fee for the work undertaken by Grant Thornton’s external property valuers. Were their valuers operating remotely, what approach to valuation were they taking and did it fit in with the requirements of the Regulator? Helen Lillington explained that the Council’s valuer had completed their valuations pre-pandemic therefore they had been undertaken in the normal way. Grant Thornton’s external valuer’s work focused on the instructions that the Council had given to its valuer and whether its report contained the right information and benchmark indices. The pandemic had had an impact and the Council had made an assessment of a material uncertainty on its valuation report to reflect the uncertainty at the time. This approach was consistent with other councils.
RESOLVEDthat the contents of the External Auditor’s Progress Report with regard to progress made towards the Worcestershire County Council Statutory Accounts 2019/20 and Worcestershire County Council Pension Fund Accounts 2019/20 be noted.