Agenda item

The Committee considered the external auditor's Audit Plan for Worcestershire County Council.

John Gregory, Director at Grant Thornton introduced the report and made the following points:

·         The overall materiality for the Council had been determined at £15.516m. Two separate items had been identified as being particularly sensitive and required separate materiality levels – Disclosure of officers' remuneration, salary bandings and exit packages, and disclosure of auditors' remuneration

·         More areas had been identified as significant risks than in previous audits. This did not necessarily imply an increase in the level of risk but reflected a change in the way risks were classified  

·         The new approach to the Value for Money audit work required the external auditor to identify significant risks and do the follow up work. The identification of a significant risk did not necessarily mean there was a problem. It could be that the issue was of importance and that there was not enough information to make a safe conclusion. The particular challenges facing the Council's financial position going forward were recognised, particularly Children's Services overspend.

In the ensuing debate, the following principal points were raised:

·         In response to a query about the Council's timescale for completion of the audit of the accounts, John Gregory stated that the Council was on track at present to produce its accounts at the earliest possible time

·         In response to a query about IT controls, Helen Lillington, Audit Manager, Grant Thornton reported that there were no significant weaknesses in the Council's IT controls although some deficiencies had been identified and an action plan was being agreed. John Gregory added that if the concerns were significant they would be flagged up to the Council

·         As part of the review of the Council's working arrangements with its health partners, did the external auditor have access to the Health Authority accounts to check its performance? John Gregory advised that the external auditor was only responsible for auditing the affairs of the County Council 

·         Concern was expressed about the continued financial pressure on the budget for Adult Social Care. John Gregory acknowledged the demand led pressure on the budgets of both Adult and Children's social care. There were things the Council could do to ease the pressure such as ensuring the right individuals entered the system, working with health services and managing the market. The Government had recognised the impact of Adult Social Care and provided Councils with the opportunity to raise an additional Council tax levy of 2%. The Chief Financial Officer added that it was important to set the right budget and deliver services where needed using the right mechanisms

·         Was the cost of care as well as an increase in volume an issue in Children's Services? The Chief Financial Officer advised that the number of Looked after Children had increased and at the same time the average cost of supporting each child had increased. It was anticipated that the budget for Looked after Children would reduce next year as the Council focussed on supporting services. In particular, the number of high cost residential care placements would be examined to find cheaper alternatives that increased the life opportunities for these children and hopefully reduced numbers entering the care system in the future

·         The introduction of the minimum wage at care homes had resulted in an increase in the cost of care. The Chief Financial Officer stated that a key challenge was to fund residential care in the available budget envelope.

RESOLVED that the external auditor's Audit Plan for Worcestershire County Council be noted.