Agenda item

This document provides an update to the planned scope and timing of the statutory audit of the London Borough of Brent (‘the Authority’)  and London Borough of Brent Pension Fund (‘the Fund’) as reported in our Audit Plan dated February 2020, for those charged with governance.

The Committee welcomed Sophia Brown and Paul Dossett (Grant Thornton external auditors) to the meeting to provide an update to the planned scope and timing of the statutory audit of the London Borough of Brent (‘the Authority’) and London Borough of Brent Pension Fund (‘the Fund’).  The Committee noted the following updates:

·             In addition to the audit risks communicated to those charged with governance in the Audit Plan on 11 March 2020, recent events had led the external auditors to update the planning risk assessment and reconsider the audit and value for money (VfM) approach to reflect the unprecedented global response to the Covid-19 pandemic. Aware that the uncertainties and the significance of the situation would present additional burden on staff, Grant Thornton aimed to work with the Council to ensure up to date communication and flexibility where possible, in the audit procedures.

·             Although the financial deadline had been extended to 31 August 2020 for the preparation of the financial statements and 30 November 2020 for audited financial statements, Grant Thornton would liaise with management to agree appropriate timescales.

·             In order to fulfil their responsibilities under International Auditing Standards (ISAs UK) Grant Thornton had revisited the planning risk assessment. Furthermore, Grant Thornton advised they may need to consider implementing changes to the procedures planned and reported in the Audit Plan to reflect current restrictions to working practices, such as the application of technology to allow remote working.

·             Grant Thornton had identified a new significant financial statement risk relating to Covid-19 in the Council and the Pension Fund and had set out the reason for risk identification and the key aspects of the proposed response, as described within the report and the Audit Scope letter (the addendum).  The materiality levels reviewed did not identify any changes to their materiality assessment.

·             Grant Thornton had updated the Value for Money (VfM) risk assessment to document their understanding of the Council’s arrangements to ensure critical business continuity in the current environment. Grant Thornton had not identified any new VfM risks in relation to Covid-19 but had enhanced the financial sustainability VfM significant risk to reflect the impact of Covid-19 on the Council’s 2020/21 budget and beyond.

The Chair thanked Sophia Brown and Paul Dossett tor the update and invited comments and questions from the Committee with the following being noted:

(a)    Clarification was sought on the method of valuation of the pension fund, aware that the impact of Covid-19 would have affected only one month of the audit and whether there could be a further review of the auditor’s fees. The external auditors explained that the valuation involved the combined work of expert valuers, Council officers and actuaries.  The auditors did not anticipate changes to the fees set out within the audit scope letter attached as an addendum to the report, although the impact of Covid-19 would affect the audit opinion.

With no further issues raised, the Chair once again thanked Sophia and Paul Dossett (Grant Thornton) for their attendance and the updates and it was RESOLVED to note the external audit plan, scope and additional work.