Agenda item

To present the report of External Audit.

The External Audit report incorporating the proposed Audit Plan for the 2019/20 audit year was presented for the Committee’s consideration. The Plan set out the work proposed to be undertaken in relation to the financial audit and matters related thereto along with an outline of the performance audit programme and a timetable for the completion and reporting of the external audit work at the Authority. Attached to the draft Plan were two supplementary letters – the one dated April, 2020 outlining potential issues with regard to the accounts and financial audit process and timetable as a result of the Covid 19 emergency and the other dated June, 2020 which updated the performance audit work programme for 2020/21 and schedule in the wake of Covid-19.

Mr Alan Hughes, Audit Lead referred to -

•           The assessment of financial audit risks as set out in Exhibit 1 of the draft Plan and clarified that the risks outlined therein are common to all public bodies that are subject to audit. At the time of its writing, the draft Plan anticipated that the Covid-19 national emergency could lead to a significant delay in the preparation and publication of accounts hence its inclusion as a risk; the situation has become clearer in the period since with the Authority succeeding in completing the draft accounts on time; the financial audit is now into its third week and is progressing meaning that the risk in terms of a delay to the issuing of the draft accounts was not realised in the case of Anglesey. As regards other areas of audit attention, the auditors will be reviewing the impact of the McCloud judgment in connection with the provision made for pension liabilities.

•           The performance audit work programme and confirmed that the planned examination under the Well-being of Future Generations Act focusing on the theme of “prevention” would be postponed to be replaced by a review of local and regional arrangements for recovery. External Audit also intends to discuss with the Senior Leadership Team whether the piece of work on planning and delivering savings is one it believes will be of benefit to the Council or whether attention might be more productively directed elsewhere. The report on the assessment of the Council’s financial sustainability has now been finalised and will be presented to the Committee in September; although circumstances have changed significantly since the report was commissioned it contains important general principles for ensuring the financial sustainability of the local authority.

The Committee in accepting the report noted and asked for clarification of the discrepancy between the figure of £427k in the 2019/20 draft accounts for fees payable to Audit Wales  and the actual figure of £362k in the External Audit draft Audit Plan. The Director of Function (Resources)/Section 151 Officer said that he would clarify the variance with Mr Alan Hughes and report back to the Committee.

It was resolved to note and accept the External Audit draft Audit Plan for the 2019/20 audit year.

ADDITIONAL ACTION - The Director of Function (Resources)/Section 151 Officer to report back in clarification of the discrepancy between the figure for audit fees shown in the 2019/20 accounts and the figure shown in the draft Audit Plan.