Agenda item

To receive a report by Ian Howse, Deloitte Audit and Assurance.

Ian Howse presented and covered the highlights of the report on the 2021-22 Audit. Since the committee first met the 2020-21 Audit was signed off.

The planning report set out the significant risks that were identified in relation to the Audit of financial statements. There was no significant risk of fraud in relation to revenue recognition grant income. An additional fraud risk was identified for 21/22 in relation to the capitalisation of infrastructure assets and assets under construction, given the level of judgement required to correctly identify capital spend. For value for money, work was on-going as there was a national movement to report on all years of audit that had not been reported on in one report which would be issued this summer. It would cover value for money in the years 2021, 21-22, 22-23 and would be the auditors annual report. He went through the potential impacts of Covid-19 and felt that for this year’s audit there would be less of an impact.

In response to questions from the committee, Ian Howse informed that the audit was tailored to the organisation and although he understood the points being made around timeliness due to national issues that led to delays. Significant progress had been made on the Audit as most of the detail testing would be finished by the end of the month and then move onto the review process of the work over April and early May.

Cllr Grey requested that the reports be written in plainer English to aid better understanding. He recommended that the Scrutiny Committee should review car parks within the next few years to look at the value of car parks.

Cllr Christopher informed that residents were concerned about the value of misstatements identified in the previous year. The Executive Director for Corporate Development responded that £1.4 million misstatements had been identified in the previous year and to put this into context of Dorset Council’s £370 million of net budget, the £4 billion pension fund and over 1000 assets. Given the scale of the organisation, he informed that this was a reasonable result.

In response to Cllr Cocking’s question regarding what controls were in place so that Dorset Council did not incur any fees for the next Audit. Ian Howse responded that the process in place was, if the scope of the work changes, then there would be additional fees. The additional fees were proposed to the finance team, and they would then put their view on whether it was a valid fee. If there was no agreement then the PSAA would review the fees, the extra work conducted and give their opinion. The continuous improvement process and control environment helped to reduce fees. The Executive Director Corporate Development added that the fee regime was set by PSAA a national body, and performance, funding, and milestones, so there was little room for Dorset Council to set rates as part of a national agreement.

Cllr Christopher requested that the contract letter between Deloitte and PSAA which sets out the contractual relationship between the external auditors, should be shared with the independent members to help their understanding.

Noted.