To receive a report from Ernst & Young LLP on the company’s 2015/16 Audit Plan for the Council.

Members considered a report from Ernst & Young LLP which set out the company’s 2015/16 Audit Plan for the Council, based on an analysis of the financial, strategic and operational risks faced by the authority.  The Plan detailed the approach to be taken by Ernst & Young to the audit of the Council’s 2015/16 financial statements and to providing a value for money conclusion on the adequacy of the Council’s arrangements to secure economy, efficiency and effectiveness in its use of resources.

The Committee noted that the audit approach and scope would be in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office’s 2015 Code of Audit Practice, the Statement of Responsibilities issued by the Public Sector Audit Appointments (PSAA) Ltd, auditing standards and other professional requirements.  It was also to ensure that Ernst & Young’s audit was aligned with the Committee’s service expectations.

The Audit Plan summarised the company’s initial assessment of the key risks which drove the development of an effective audit for the Council and outlined the company’s planned audit strategy in response to those risks.

The Ernst & Young Manager introduced the report and highlighted particular issues for Members’ attention.  Under ‘Other Matters’ (Part 3 – Significant value for money risks) she referred to the public interest disclosure from a whistle blower regarding the approach taken by the Council to its procurement of legal services.  The Committee noted that at the meeting of the Council’s Executive on 12 January 2016 (minute E/15/89 refers) the Chief Executive had explained that the Council had received notification of the whistle blower’s concerns through the National Audit Office and that the Council’s external auditors had been tasked with investigating them. 

The Ernst & Young Manager explained that the company had welcomed the Council’s positive response to the company’s investigation procedure and the authority was known to be considering the lessons which had been identified so far.  She added that it had been hoped to submit a letter setting out the outcome of the company’s work to the meeting but this was yet not ready.

In response to a Member’s query regarding the whistle blower the Chief Finance Officer stated that the complaint had been received through the National Audit Office and passed to Ernst & Young as the Council’s external auditors.  As such it was extremely doubtful whether the whistle blower’s identity was known within the Council.  The Chief Finance Officer then explained that the whistle blower’s concerns related to the procurement process undertaken by the Council for the provision of shared legal services through LGSS Law Ltd and whether external legal advice had been sought on this.  The Chief Finance Officer confirmed that it had.  He added that the Council had followed the correct procedure but, unfortunately, this had not been fully documented.  He reminded the meeting however, that this was the first time that the Council had undertaken such a process and, if it was to occur again, any lessons would be applied.  He concluded by stating that the letter containing the final outcome from Ernst & Young was expected shortly.

(Note: Minute AUD/15/53 below also refers).

NOTED

the external Audit Plan for the year ending 31 March 2016.