Agenda item

To receive a verbal update from Grant Thornton on progress in delivering their responsibilities as the Council’s external auditors along with a summary of any emerging national issues and developments that may be relevant to Brent as a local authority.

Ward Affected:

All Wards

Contact Officer:

Sophia Brown

Senior Audit Manager, Grant Thornton

Tel: 020 7728 3179

Email: Sophia.y.brown@uk.gt.com

Sophia Brown, Senior Audit Manager at Grant Thornton (the Council’s external auditors), gave an update on the progress in delivering their responsibilities as the Council’s external auditors along with a summary of emerging national issues and developments that were relevant to the Council. The Committee was then invited to raise questions on the report, which focused on a number of key areas as highlighted below:

·       In response to a question from the Committee, it was noted that Grant Thornton would be working remotely for the duration of the accounts audit. Though there were some audit tasks which were best undertaken in person, it would be able complete the majority of audit remotely.

·       One of the biggest risks related to COVID19 for the Council was the impact on its reserves and financial health. Clearly, this would feature heavily in the accounts audit. Also, the National Audit Office’s new Code of Practice now required a different approach to value for money work which would involve more detailed analysis of key issues.

·       It was noted that commercial asset valuation was far less prominent in Grant Thornton’s work with the Council than with other authorities. Having said this, it had already had detailed discussions with valuers. Valuers had been considering the material uncertainty that has resulted from COVID19 and this had been reflected in the accounts audit already. As the Council’s portfolio investment is relatively low,  it will not feature heavily in accounts audit as compared to other authorities.

·       In response to a question from the Committee, it was noted that there would likely be a financial impact on town centres across the country as a result of COVID19. However, the Council was deemed as lower risk to many others in terms of historic decisions and its current financial situation. Grant Thornton would continue to look at the Council’s approach to sound management and keeping adequate reserves.

·       It was noted that the fallout from COVID19 would be understood more comprehensively as the year goes on. As such, it would be something Grant Thornton expected to look at in detail next year and much of the analysis undertaken already would feed into this. There were some mitigations already in place, such as central government’s Collection Fund & Deficit Strategy, but there would be significant risks.

The Senior Audit Manager at Grant Thornton then gave an update on Financial Reporting Council (FRC)’s review of their audit of the Council’s 2018/19 financial statements and 2019/19 Value for Money work. The Committee was then invited to raise questions on the report, which focused on a number of key areas as highlighted below:

·       In the opinion of Grant Thornton, none of the points raised by the FRC impacted the soundness of the true and fair opinion issued on the 2018/19 financial statements.

·       In response to a question from the Committee, it was noted that the findings of the FRC review would not result in extra work for the 2019/20 account audit as the findings had been integrated into Grant Thornton’s plan prior to the review.

·       It was noted that Grant Thornton would be engaging a valuer again for the 2019/20 accounts audit, as required by legislation. It would also need to look at the National Audit Office’s new Code of Practice, and as such next year had the scope to be a challenging year.

The Chair then thanked Grant Thornton for the comprehensive report and clarifications provided at the meeting.

Resolved

To note the contents of the External Audit Progress Report.