Preliminary Planning Report
- Meeting of Audit and Performance Review Panel - expired May 2019, Tuesday, 12th February, 2019 5.00 pm (Item 51.)
To consider the report.
Jonathan Gooding and Julian Reeve from Deloitte LLP attended the meeting to introduce the Preliminary Planning Report to the Panel as Deloitte had been appointed as the external auditor for the Royal Borough of Windsor & Maidenhead. It was noted that a more detailed report would be presented in support of the audited accounts.
The Panel were informed that the scope of the audit would be undertaken under the requirements of the Code of Audit Practice and supporting guidance published by the National Audit Office. They would be required to give an opinion on the statement of accounts, including its pension fund, and a conclusion on the arrangements for value for money. The scope of our work would not be largely changed from the scope of work set by the previous auditor and would include covering the Statement of accounts, Annual Governance Statement, Whole Government Accounts and Value for Money conclusion.
One area that will be different from previous audits would be the approach to capital expenditure as the authority were undertaking a number of large capital projects and determining capitalised expenditure was a judgement call that had the potential for misreporting fraud. They would be reviewing the authority’s capital plans as part and discuss with officers potential risks or issues identified.
The auditors would also be looking at pension liabilities and accounts as the regulations meant they had to have the assumption that revenue recognition was a significant risk.
Appendix 2 of the report highlighted the auditors independence and fees.
Cllr Brimacombe reported that the Panel had been concerned when the new audit arrangements were introduced and thus he was pleased that Deloitte had been appointed as it meant the authority continued to be audited by a significant branded auditor.
Cllr E Wilson mentioned that there was a lot of large projects planned that could have capitalisation of costs and asked how this would be reported. The Panel were informed that the starting point was reviewing and understanding capitalisation of costs and that any concerns would be reported to this Panel. Balance sheets would be examined and risks explored. As much as possible would be presented at the next meeting, however most would be presented at the end of the audit.
Cllr Brimacombe asked if the auditors looked at underlying assumptions of financial income streams and was informed that it varied dependent on the income streams. The starting point would be looking at the risk assessments fr the income before producing their procedures.
Cllr E Wilson asked how the RBWM Property company would be audited and was informed that they had their own auditors but they would also be audited as part of the audited accounts. It was also confirmed that the same applied for AFC and Optalis where the would also take a risk based approach looking at VFM.
Cllr D Wilson asked if an update could be provided on the pension fund and was informed that this was planned and would be reported back to Panel.
Cllr E Wilson said that it was fine having a risk based approach but the Panel needed reassurances about what controls were in place given the level of commissioning. It was noted that this area of work would be undertaken by internal audit.
Cllr Saunders mentioned that reviewing AFC and Optalis was outside the scope of the external auditors but the Panel may wish to consider what it would be appropriate for them to review.
Cllr E Wilson said that it was important to see VFM out of the commissioned services and this could be placed on the new panels work programme.
Cllr Brimacombe mentioned that as most local authorities were now commissioning authorities then auditors needed to adjust to meet changing practises. The Panel were informed that VFM and governance arrangements would be looked at as part of the risk assessment. Other areas such as assurances regarding internal audit and contract management would also be examined.
Cllr Saunders said that in the past there had been issues regarding the valuation of land and buildings that required a major adjustment. It was noted that external auditors were used and that a discussion could take place on how to mitigate any risk.
Cllr Saunders also mentioned that there was a significant amount of regeneration and this carried an amount of risk and required transparency in audits.
The Panel noted the report.