Agenda item

The Committee considered the Statutory accounts and Pension Fund 2019/20 - External Audit Findings Report.

Peter Barber, Key Audit Partner from Grant Thornton, the Council’s external auditor introduced the report and made the following points:

·         The deadline for the publication of the accounts had been extended until 30 November and it was pleasing that both sets of accounts were near to completion

·         The process had been challenging this year due to the impact of Covid 19, staff working remotely and the need to undertake a more rigorous examination of the information provided by the Council. He thanked the Council’s finance team for their co-operation and support through the process

·         The materiality of the Council’s Accounts had been set at £11.6m. No material errors had been found in the Accounts to date

·         There were a small number of outstanding issues which related to the Energy from Waste plant, the McCloud and Goodwin developments. Unfortunately, because the Manager at Grant Thornton had been unavailable to attend this meeting due to ill-heath, he was unable to give an assurance on these elements of the Accounts. However, he did not anticipate any problems and planned to issue an unqualified opinion

·         The Council had appropriate arrangements to produce accurate and timely Accounts and working arrangements had improved on the previous year

·         There would be an emphasis of matter on the land and buildings element of Property, Plant and Equipment (PPE). This was not a qualification of opinion but a recognition that there was greater uncertainty about the materiality of this element of the Accounts. Responses by the Council to queries about PPE had improved but there remained scope for further improvement

·         The Value for Money audit had particularly focused on the Sustainable Resource Deployment element. Despite the challenging environment, it was proposed to issue an unqualified opinion on this element of the Accounts. There was confidence that the Council’s budget setting arrangements were effective. The Council’s reserves and balances were adequate

·         No material errors had been identified in the Pension Fund Accounts. The impact of Covid 19 and the volatility of the markets had been reflected in a reduction in the required level of materiality for the Pension Fund Accounts.

In the ensuing debate, the following points were raised:

·         The Chairman recognised the work of all parties involved in getting the Accounts to the point of sign off well ahead of schedule, recognising the improved paperwork and communication. He acknowledged that there was an added level of detail and technical challenge to the work undertaken this year but queried the need for this extra level of examination

·         Had the additional element of external expert advice/assurance on PPE sought by Grant Thornton added any value to the auditing process? Peter Barber responded that the engagement of an external expert had emerged from the regulator querying whether Grant Thornton had the necessary technical expertise to challenge the Council’s expert’s valuation of land and building assets. It provided the external auditor with the ability to provide expert challenge to aspects of PPE and gave an element of assurance albeit at a charge to the Council. He would envisage this continuing but at the same time learning from previous experience to refine the process. Michael Hudson struggled to see the added value of this additional advice but welcomed that the process would continue to be reviewed and awaited the findings of the Pension Regulator. 

RESOLVED that the Grant Thornton Audit Findings Report for the Worcestershire County Council Statutory Accounts 2019/20 and Worcestershire County Council Pension Fund Accounts 2019/20 be noted.