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Agenda item

Agenda item

Minutes:

The external auditors were required to produce an annual audit plan, setting out the areas it intended to review during the year. 

 

The Director of Corporate Services introduced Mr Andrew Smith, Key Audit Partner and Mr Andy Ayre, Audit Manager who were in attendance to present the report. 

 

The Director of Corporate Services advised that the audit fee of £28.4k had been discussed with the Chairman and Vice-Chairman of the Committee.  He felt that it was important to agree the fees in advance of the work being done and that the additional charges reflected additional work required. 

 

Mr Smith advised there had been a £4,700 increase in the base fee to cover additional work which was largely around the valuation of land and buildings and pension liability; two areas that the regulator was very focussed on and which resulted in a late variation fee last year but was built into the plan going forwards.

 

Mr Smith highlighted that the impact of covid-19 meant the audit was being conducted remotely but no significant issues were anticipated.  He advised that the pandemic had resulted in a change to the timetable as the Government had significantly put back the deadlines for the production of the draft accounts and the completion of audit. The deadline (which was July last year) was now 30 November.  He also advised that the audit aimed to start mid-August, with fieldwork completed by the end of September and no problems were envisaged in order to report in November.  If the audit was not completed by that date a statement must be made that the audit had not yet been completed and subsequently republished once the audit was complete.  It was noted that several authorities had to follow this guidance last year.

 

County Councillor Nikki Hennessy, Chairman of the Committee joined the meeting.

 

Mr Smith handed over to Mr Ayre to provide Members of the Audit Committee an overview of the planned scope and timing of the statutory audit which included: key matters that impacted on the audit, details of significant risks identified and the proposed response to the risk, details of other audit responsibilities, materiality, value for money arrangements, audit logistics and team and audit fees.  The report also confirmed there were no significant facts or matters that impacted on the auditors’ independence to express objective opinion on the financial statements.

 

County Councillor Holgate felt it was excessive to be undertaking an audit and valuation of property every year.  In response, Mr Smith confirmed that CIPFA and auditing standards required this area of work auditing every year as the valuation represented a significant estimate by management.  It was therefore identified as a significant risk which was one of the most significant assessed risks of material misstatement.  However, he acknowledged that the valuation of land and buildings did not fundamentally change the Authority’s financial position.  He advised that Grant Thornton was campaigning to move away from fair value accounting through influencing CIPFA via an independent review led by Sir Tony Redmond (which sought views on the quality of local authority financial reporting and external audit).

 

The Director of Corporate Services confirmed that the Authority commissioned revaluations of its assets on a 5-year rolling basis (20% each year with the remaining 80% a desk-top exercise) given the majority of buildings were fire stations. 

 

County Councillor Holgate did not feel the annual valuation was a sensible use of the Authority’s resources as it didn’t add any significant value and it wasn’t a risk in real terms.  He queried whether the Audit Committee could support the review of this requirement. 

 

County Councillor Shedwick added that the Fire Authority did not have the biggest property portfolio.  The Committee therefore asked the external auditors to note and feedback these comments as appropriate.

 

RESOLVED:- That the Audit Committee agreed the external audit plan for 2019/20 and the increased fee.

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