Cheltenham Borough Council
Cheltenham Borough Council

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Agenda item

Audit plan 2015-16

Grant Thornton (no decision required)


Peter Barber of Grant Thornton, introduced the Audit Plan for 2015-16.  He explained that the plan provided an overview of the scope and timing of the audit, as well their understanding of the challenges and opportunities that were facing the council; which included Central Government Funding, Devolution, Housing and Joint Arrangements.  The document also outlined general changes that faced all councils; one being the bringing forward of the approval and audit of financial statements to 31 May and 31 July respectively by the 2017/18 financial year.  He reminded members that in performing their audit, Grant Thornton applied the concept of materiality; meaning that they did not sign-off the accounts of the council as being correct to the penny.  Overall materiality had been determined as £1,644,000 (2% of gross revenue expenditure) and £82,000 was the amount below which misstatements would be considered ‘clearly trivial’.  Significant risks specific to this council included, the systems upgrade to Agresso, the accurate valuation of assets for the purposes of the balance sheet and the valuation of the pensions liability fund, which would need to be reasonably stated.  There were two specific risks associated with the VfM; the MTFS position and 2020 Vision arrangements.  He was pleased to report that key messages arising from interim audit work were positive and that the Section 151 Officer’s ability to post journals had been removed; which was a recommendation made in last years action plan and demonstrated good controls. 


Peter Barber gave the following responses to member questions;


·         Audit work relating to the MTFS would include looking at how the change in Business Rates were being reflected in the MTFS and he imagined that the budget was being revisited to reflect these changes. 

·         Part of the criteria for reaching the VfM conclusion was assessing how the council worked with partners; so rather than Grant Thornton looking at the ‘Coxit’ issue, they would instead be looking to evidence that the channels for dialogue remained open.  

·         Grant Thornton did not have the capacity to review every decision taken by the council.  Their work focussed on the biggest risks and these were the MTFS, which was a significant risk to most council’s and 2020 which was fundamental to this council, not just in terms of finances but also service delivery, as, if realised, it could result in efficiencies and improved services.  These issues would be reviewed at a high level and would only be looked at in more detail if an issue was identified. 

·         The purchase of Delta House would be looked at as part of the 2015-16 financial statements and the VfM audit, more than likely under the valuation of surplus assets and investment property as it was not yet being used for service delivery.  Grant Thornton would review what was paid for the property against its current value and whether this represented a gain or an impairment.  If it represented an impairment, they would look at why and ensure the impairment had been properly reflected in the financial statements.  


No decision was required.

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