Agenda item

Report of the Financial Planning Manager

The Financial Planning Team Manager introduced the report to Members and invited the External Auditor to address the Committee.

As a new member of the External Auditing Team, Tony Crawley introduced himself and presented the report to Members.  He highlighted the new guidance for the Value for Money Arrangements issued by the National Audit Office and each section of the plan including the audit fee.

The following questions were asked by Councillor S Sheahan and responses given:

-     What was the significance of the materiality figure as it seemed high and would it be set lower?  The External Auditor explained that it was a value judgement figure based on the financial position of the Council and it was lower than the benchmark figure.  Members could put forward a figure as long as it was in line with the Code of Practice.  He suggested that Members get advice   from officers if they wanted to submit their own judgement figure as any changes would result in implications to the Council.   The Financial Planning Manager commented that the Council’s figure had not been set yet as it was something that was considered at the financial year end.

-     How common in the Public Sector was the use of management override controls? The framework that Local Authorities operated under meant that it was highly unlikely to be used but it still had to be tested.  The important issue to look out for was any considerable difference in figures. 

-     Should Members be concerned of the impact on finances if the valuation of property plant and Equipment was wrong?  The main focus of the valuation was the value of physical assets and management information, there were lots of angles to consider and it was external audit’s job to assess if as an Authority, the Council was making the best use of it.  Members should not be concerned.

In response to a question from Councillor G Jones, the External Auditor explained that the materiality figure was a judgement made by using the appropriate framework and was typical for a Council of its size.  Councillor G Jones went on to ask how many officer hours were used for the audit fee paid by the Council.  The External Auditor explained that it varied on the level of officer involved so it was not calculated by officer time, it was a scale fee set by PSAA.

Councillor F Fenning expressed his interest in the total expenditure figure; he believed that members of the public would not appreciate how much the Council was spending.  He commented that the term ‘fair value’ used when discussing the value of property plant and equipment was not clear.  The External Auditor explained that it was financial terminology and effectively was the market value.  Councillor F Fenning also expressed concerns that the level of service from the external auditors could decrease as the audit fee had been reduced.  The External Auditor reassured Members that efficiencies had been implemented to provide a quality service and these cost savings were being passed on to Local Authorities, it would not lead to a reduction in service.

In response to a question from Councillor S Sheahan, it was confirmed that the materiality figure did include the money that was collected and passed onto the County Council, Parish Council’s and the public. It was calculated in relation to the total amount of money over which the Council needed to exercise stewardship rather than simply expenditure.   Councillor S Sheahan commented that as we were actually spending a lot less than what it seemed, it would be easier to understand if the figures were broken down.  The Financial Planning Team Manager confirmed that was something that could be provided in future.  Following some further discussion about the materiality figure, the Monitoring Officer commented that the Council still needed to be accountable for the total  amount of money which passed through it,  as a conduit and expenditure.

The External Auditor then went on to present the Grants and Claims section of the report.

It was moved by Councillor R Adams , seconded by Councillor  S Sheahan and

RESOLVED THAT:

a)    The External Audit Plan 2015-16 be approved.

b)    The Annual Report on Grants and Claims 2014/15 be noted.