Agenda item
KPMG External audit progress report 2012-13
This report by the Council’s external auditor (KPMG) sets out the external audit progress report covering 2011/12 grant claims and certification work. The report also highlights the areas of work which KPMG will focus for the next quarter.
Minutes:
Members received a report by the Council’s external auditors (KPMG) which set out the external audit progress report covering 2011/12 grant claims and certification work. Andrea White, Director of KPMG LLP, introduced the report which also highlighted the areas of work which KPMG would focus for the next quarter.
Andrea White informed Members that since being appointed as the Council’s external auditor in September 2012, KPMG had prepared an annual report that set out the results of the 2011/12 grant claims and certification work, commenced planning for 2012/13 accounts audit and responded to a letter that raised concerns over changes in senior management. She continued that over the next quarter, her work would focus on the following;
(a) Finalising the planning for the 2012/13 financial statements and value for money audits;
(b) Preparing the 2012/13 Audit Plans for the Council and its Pension Fund for presentation at the Audit Committee on 20 March 2013;
(c) Planning our interim accounts audits which would provide assurance over the key financial controls supporting the production of financial information for inclusion within the Council’s 2012/13 financial statements. The interim fieldwork would commence in March 2013;
(d) Discussing with officers the arrangements for the opinion audit visit including the working papers that the Council would be expected to prepare to support the financial statements audit so as to maximise the efficiency of the audit progress.
Andrea White advised Members that the audit fee for the year had been reduced by about 40% due to officer efficiency, outsourcing of the Audit Commission’s in-house audit practice and internal savings, drawing members’ attention to the comparative table of scale of fees for 2011/12 and 2012/13.
In clarifying the fee, Andrea White stated that it was contingent on several factors and assumptions including the following; an obligation on the Council to inform KPMG of any significant developments impacting on the audit; compliance of internal audit with appropriate professional standards; and appropriate work on all systems that provide material figures for the financial statements upon which KPMG can place reliance on them for its audit. In addition, officers would be expected to providegood quality working papers and records at the start of the final accounts audit, make available for audit all financial statements in line with the agreed timescales and prompt responses to queries and draft reports. She continued that within the fee level, KPMG would not be required to carry outadditional work for any special investigations or respond to letters from members of the public. If this was not the case and KPMG was required to complete more work than was envisaged, an additional fee would be charged for the work carried out. She emphasised that KPMG had also assumed that there would be no significant changes to the regulatory framework within which the Council operated.
Andrea White advised members that the plan for the audit of the 2012/13 financial statements detailing the risks identified, planned audit procedures, and any changes in fee would be presented at the Audit Committee meeting on 20 March 2013.
In welcoming the audit progress report, members noted that the efficiency of the Council’s internal audit had in part contributed to the successful and noteworthy external audit and praised officers for their contribution. Councillor Al-Ebadi enquired as to whether there were hourly rates upon which the fee structure was based. Andrea White clarified that the fee structure was based on the Audit Commission’s published hourly and fee scale rates.
RESOLVED:
that the external auditor’s progress report for 2012-2013 be noted.
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