Agenda item

1.      The report was presented by Lucy Nutley of Grant Thornton.

2.      Ms Nutley drew Member’s attention to page 323 of the reports pack which set out some of the challenges and the responses to them.  It was confirmed that this information had been replicated to all the Kent District Councils audited by Grant Thornton. The monitoring of these challenges and the Council’s responses would continue throughout the year in the Financial Statements and Value for Money work, as well in the years leading up to, and beyond, local government reorganisation.

3.      Ms Nutley drew Members’ attention to page 324 of the reports pack which set out the changes to auditing, as a resulted of the Reform of Local Audit and are ongoing.

4.      As a result of IFRS 16 implementation, the anticipated values of the disclosed leases coming on to the balance sheet and rebasing of the PFI liabilities, had been noted as a significant risk of material misstatement for 2024 – 2025.

5.      Other risks of materialist statement included:

·         Management override of controls, which was considered a presumed risk.

·         The risk of fraud and error and revenue recognition which had been

     rebutted for the Council, along with the risk of fraud and error and

     expenditure recognition.

·         The valuation of land and buildings (including investment property) to be a significant risk. 

·         The valuation of the pension fund asset or liability.

6.      Ms Nutley drew Members’ attention to page 343 which set out the Group Audit Scope and Risk Assessment approach and asked the Committee to note that, due to changes in the group and the internal standard on auditing for group audits, this was still in progress and an updated approach would be brought to the next Committee meeting.

7.      Ms Nutley commented that following up of key recommendations previously raised, as well as focusing on the progress the Council had made in implementing the recommendations, would be key to Grant Thornton’s work this year.  Members were directed to page 357 which set out the external auditor’s proposed fees.

8.      In answer to Members’ questions and comments, the following was said:

          a)      The work which focused on scrutinising the process of the Commercial Services Group was ongoing and as such did not have a specified date for determination.  This was due to a change in the standard and therefore auditors wanted to ensure they were acting correctly.

          b)      Part of the audit work involved looking at property disposals; in view of the details contained within the external auditor’s annual plan for 2024-2025 concerning local government reorganisation, disposals and value for money would be examined closely.

          c)      Past local government reorganisations, albeit smaller in nature, had been reviewed to see where improvement could be made across a range of areas, to ensure they were all captured by the audit process.  In terms of Value for Money work, this would be assessed by following the public money to see if the decisions had been made.

          d)      It was confirmed that Grant Thornton audit all the Kent districts.

          e)      The Adult Social Care & Health directorate spending was featured as part of Grant Thornton’s Value for Money work and continued to be one of the biggest risk areas.  The challenges the Council faced in relation to this were recognised and how the savings could be made and the development of such strategies would be looked at.  It was confirmed that the Council had taken notice of advice from external auditors previously and therefore the audit would continue within the framework and understanding that Members, Cabinet Members and statutory officers were aware of their roles and responsibilities.  It was confirmed that Grant Thornton had not identified any new concerns at this stage.

9.      RESOLVED Members to note the External Auditor’s Annual Plan for Kent

          County Council 2024-2025 for assurance.