Issue - meetings

Mr Darren Wells presented the External Auditor’s Audit Plan for delivering the audit of the 2017/18 financial statements and value for money conclusion in order to meet the statutory deadline for publication of audited local government accounts which had been brought forward to 31 July 2018.  The report included details of the significant risks identified, the reasonably possible risks identified, the concept of materiality and the anticipated audit fee.

In response to questions by Members, Mr Wells explained that:

·  The risks identified were fairly generic across all local authorities and were not unique to Maidstone.

·  The reason for identifying employee remuneration as a reasonably possible risk was because payroll expenditure represented a significant percentage (16%) of the Council’s operating expenditure, which included Housing Benefit.

·  The External Auditor had determined planning materiality to be £1.813m (PY £1.787m) which equated to 2% of the Council’s forecast gross expenditure for the year.  The External Auditor was obliged to report uncorrected omissions or misstatements other than those which were “clearly trivial” to those charged with governance.  Clearly trivial had been set at £90,700 (PY £89k).  Trivial was based on total expenditure and total income reflected in the Statement of Accounts.  Whilst £90k might not seem trivial to the public, the External Auditor had to frame the audit based on spend.  Triviality was calculated as a % of materiality (5%) and provided a basis on which the External Auditor could then report back and ask Officers to make changes.  If the level was set lower, the impact would be that for every error in the notes or main statements found, the External Auditor would be asking the Officers to make those changes, thereby potentially increasing the amount the External Auditor had to do and report back.  The aim was to strike a balance between ensuring that the Statements were fairly presented, but in the most economic and efficient way.

RESOLVED:  That the External Auditor’s Audit Plan for the year ending 31 March 2018, attached as Appendix A to the report of the Director of Finance and Business Improvement, be noted.