Agenda item

The attached report at Appendix A sets out the work that the Council’s External Auditor, Grant Thornton, plans to undertake for the audit of the Council’s Statement of Accounts in respect of 2024/25.

The External Auditor plans to give an opinion on whether the accounts give a true and fair view and whether the Council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

Peter Barber, Barrie Morris and Katie Whybray, representing Grant Thornton, the Council’s External Auditor, presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

The External Auditor team provided a brief update on the 2023/24 position and responded to questions, with the following points noted:

• The outstanding objection had been concluded. All concerns raised in the objection had been considered, the payment referenced was not ultra vires and no further action was required.
• The closure of the audit remained uncertified because the National Audit Office (NAO) had yet to complete its work on the Council’s Whole of Government Accounts. This was a national issue affecting all councils not just BCP. The risk was confirmed as minimal.
• The uplift had increased the audit fee to £493,539. The delay in certifying the audit’s closure would not adjust the fee further.
• The audit fee was driven by a scale fee set annually by the Public Sector Audit Appointments (PSAA). Any variation was subject to challenge by the PSAA and the Council. BCP Council’s fee was considered appropriate for the size and complexity of its accounts. Fee comparison data was publicly available at PSAA Auditor Directory 2024 to 2025
• It was confirmed that FuturePlaces was referenced in the Value for Money (VFM) conclusions which had found that the Council’s governance arrangements as a whole were now effective.

The Committee was advised of the work planned in undertaking the audit of the Council’s Statement of Accounts 2024/25, as detailed in the Appendix 1. The Audit Plan set out key developments impacting the audit approach, identified risks (including International Financial Reporting Standards (IFRS) 16), group audit, the IT audit strategy and value for money arrangements. Details of the fee estimate were also included.

The External Auditor team and officers responded to questions, with the following points noted:

• On VFM arrangements, it was confirmed that prior year recommendations were checked to see if they had been addressed
• The Council was in a better starting position for the 2024/25 audit than others and in the next few years the level of assurance should increase to a point of giving an unmodified opinion on the accounts.
• The Chief Financial Officer agreed to confirm how the audit fee appeared in the 2025/26 budget compared to the proposed fee.
• The procedures for considering and rebutting the risk of fraud in revenue and expenditure cycles were explained
• A lower materiality figure was specified for senior officer remuneration disclosures but not for other areas
• Risks relating to national/global events were considered to some extent, however the main focus was on risks which had a direct impact on the Council’s financial statements and VFM arrangements
• The same Grant Thornton team now audited the accounts for Dorset County Pension Fund (DCPF), meaning there would be more awareness of the progress of DCPF’s audit
• An assessment of Barnett Waddington’s approach as actuary including an evaluation of its assumptions and data would form part of the External Auditor’s audit opinion
• The audit procedures in relation to non-rebuttable presumed risk of management override, included focussed testing to identify unusual journals and testing for new/unusual/complex items
• The escalation policy aimed to address delays in the production of financial statements. For urgent matters there was a mechanism for the External Auditor to expedite any concerns to the Chair.

Members raised concerns about the implications of IFRS16 in relation to leases, particularly the potential impact on community organisations and whether it was factored into the Internal Audit Plan. It was noted that the Audit Plan was an evolving document and that Internal Audit would liaise with management on expected issues and actions. The Portfolio Holder confirmed that much work had already been completed by the Finance team in preparation for the external audit.

RESOLVED that the Grant Thornton External Audit Plan 2024/2025 for the Council be noted.

Voting: Unanimous

Following this item the meeting was adjourned for a short comfort break.