Issue - meetings
External Audit:EY Audit updates March 2020 PSAA letter and briefing
Meeting: 09/03/2020 - Audit and Governance Committee (Item 43)
43 External Audit: EY sector briefing Quarter 4 December 2019 
PDF 1 MB
Briefing from the external auditor EY - Local Government Audit Committee briefing Quarter 4, December 2019
Recommendation: to discuss and note the briefing.
Minutes:
The Committee considered and noted the briefing from the external auditor EY - Local Government Audit Committee briefing Quarter 4, December 2019.
Meeting: 09/03/2020 - Audit and Governance Committee (Item 42)
42 External Audit: EY letter to PSAA bodies PDF 137 KB
Letter from the external auditor EY dated 10 February 2020 - sustainability of UK local public audit.
Recommendation: to discuss and note the letter and the implications.
Minutes:
The Committee considered a letter from the external auditor EY dated 10 February 2020 setting out their position on their audit service under the Public Sector Audit Appointments (PSAA) and the sustainability of UK local public audit.
Adrian Balmer (EY) set out the main points in the letter:
· The audit fees as set by PSAA contract were for a set fee plus billing for specific additional work: where more work was required this had to be agreed between EY and the council or if challenged arbitrated by the PSAA. The additional bill for the 2018/19 audit work was currently with PSAA to arbitrate. In general EY was finding that the fees set in 2016 under the PSAA contract were now not sufficient to cover the increased complexity of the audit work.
· EY was planning on resourcing the 2019/20 audit to ensure it would be completed by 31 July but this was dependent on a number of factors including staff availability and specialist expertise. There would be no compromise on the quality of the audit.
· The Accounts and Audit Regulations 2015 did not specify that an audit needed to be completed by the publication deadline on 31 July each year (but that by that time the S151 officer must re-confirm that the statement of accounts presents a true and fair view of the authority’s finances before the committee approves this on behalf of the authority.) The audit could be completed at any point.
The Committee noted concerns:
· The S151 officer had not seen the detailed contract between PSAA and EY that underpinned the audit function;
· The process for billing for additional work and the basis for increasing the agreed fee through the contract period was unclear;
· The process and terms for the contract renewal in 2 years was uncertain.
· The PSAA was consulting with S151 officers about how to proceed.
The Committee noted the contents of the letter.