Agenda item

Liz Luddington, Key Audit Partner, and Curtis Wallace, Public Sector Audit Manager presented the Audit Plan 2025/26.

It was noted that the external auditors were required to produce an annual audit plan, setting out the areas intended for review during the year.

Members considered the Audit Plan which included key matters that impacted on the audit, details of significant risks identified and the key aspects of proposed response to the risk, other matters, progress against prior year recommendations, Grant Thornton’s approach to materiality, IT audit strategy, value for money arrangements, audit logistics and team, audit fees, independence and non-audit services, and communication of audit matters with those charged with governance. 

The proposed audit fee was £105.938k (last year’s fee was £106.053k).

The report identified significant risk areas were i) Management of override of controls, ii) The revenue cycle includes fraudulent transactions, iii) The expenditure cycle includes fraudulent transactions, iv) Valuation of land and buildings, and vi) valuation of the pension fund net liability.

Liz Luddington explained that the Audit would commence earlier this year with a date for completion of the Audit in November 2026, in time for the January deadline.

The Chair asked if there were any indications that fees would increase. Curtis Wallace advised that the fees were set and there were no risks that would indicate that fees would be increased. The only reason for an increase in fees would be if an unplanned area of work were needed which was above normal procedures.

The Director of Corporate Services (DoCS) asked for clarification on the potential outcome of a failure to meet the backstop date of 30 November. Liz Luddington confirmed that in the worst-case scenario, a qualified opinion could be issued due to insufficient time to gather all evidence required. An exception form would allow the failure of meeting the deadline without being officially non-compliant. Following a disclaimed opinion, sample sizes would increase in the following year. It was difficult to gain assurance ‘build back’ and it would usually take a 2-3 year cycle to complete the extra work.

In response to a query from the DoCS regarding Grant Thornton’s capacity to complete the audit, Liz Luddington advised that this year had been a trial run and there was a focus on delivery in the firm. The Audit would commence earlier and there was a pooling of teams where departments would be paired with one manager across both. The work would be continuous with no audit running alone. Work to meet the deadline would commence as soon as the ledger closed.

Councillor J Hugo asked if the Fire Authority was on track to meet the deadline. Liz Luddington confirmed that they had met the deadline for the current year so by starting the audit earlier, there should be no issue. Curtis Wallace added that interim testing had taken place on the sample selection,

Councillor J Hugo moved to note the report and presentation; seconded by County Councillor J Ash.

Resolved: That the Audit Committee agreed the external audit plan for 2025/26.