Agenda item

Any item of business which the Chairman is of the opinion should be considered at the meeting as a matter of urgency by reason of special circumstances (to be specified in the Minutes).  For a matter to be considered as an urgent item, the following question must be addressed:

“What harm to the public interest would flow from leaving it until the next meeting?” If harm can be demonstrated, then it is open to the Chairman to rule that it be considered as urgent. Otherwise the matter cannot be considered urgent within the statutory provisions.

The Chairman agreed a change to agenda order, to consider Agenda item 11 next due to its urgent nature.

Regulations required the committee to consider both the North Somerset Council Audit Plan (report from the council’s External Auditors) and Informing the Audit Risk Assessment for North Somerset Council (report from the council’s External Auditors) ahead of the audit plan commencing.  Audit work would be prevented from being completed within statutory deadlines if not considered at this meeting and the publication of audited accounts was within the public interest for transparency and adequacy of public record.

A representative from Grant Thornton presented the report noting that this was the first year of compiling the group accounts. The report provided an overview of the planned scope and the timing of the statutory audit of North Somerset Council for those charged with governance.  Reference was made to specific procedures followed and the requirement to carry out specific work around material transactions and to consider the risk of fraud in expenditure.

 Members were made aware of significant risks which included management override of control; income from fees, charges and other service income; valuation of land and buildings (an area of increased focus); valuation of investment properties and valuation of net pension fund liability.  Significant findings on these areas would be communicated as well as any other significant matters arising from the audit in the Audit Findings (ISA 260) Report. 

The representative highlighted the planning materiality levels which were £7.75m for the group and £7.55m for the council which equated to 2% of the prior gross expenditure for the year.  In terms of Value for Money arrangements the risk assessment regarding the council’s arrangements to secure value for money identified that financial sustainability, given the current challenging financial environment represented a risk of significant weakness.

In presenting the report the representative drew Members’ attention to page 20 of the report which referred to audit fees.  There had been significant fee variations in recent years and discussions were taking place with the PSAA in order to agree these. Once agreed they would be discussed with the council.

Members were informed that the remainder of the report contained the outcomes of recent quality reviews and that Grant Thornton was pleased with the progress being made on those reviews. In terms of progress against prior year recommendations most were in progress and in follow up with audit.

Members queried proposed fees and visibility on percentage growth.  The representative explained that it was higher than the previous year as there were additional requirements regarding group accounts and infrastructure assets and new reporting standards. Members raised queries in relation to major projects such as Metrowest and Banwell Bypass and whether they were covered sufficiently in terms of future risk. Members also asked for clarification around the long-term financial concerns around property portfolios, investments and pension fund, whether the timetable was achievable and the nature of any help that members could give the external auditors in their work.

Resolved: that the report be noted.

                                 ***Change to Agenda Order***