Report of: Interim Group Finance Director (Section 151 Officer) 

Purpose of report: to seek approval for the provisional External Audit Planning report for 2025-2026.

Recommendation(s): That the Committee resolves to:

1.    Approve it’s understanding of, and agreement to, the materiality and reporting levels of the provisional external Audit Planning report for 2025-2026.

The Audit and Governance Committee resolved to:

1.    Approve it’s understanding of, and agreement to, the materiality and reporting levels of the provisional external Audit Planning report for 2025-2026.

The Group Finance Director had submitted a report to seek approval for the provisional External Audit Planning report for 2025-2026 

Andrew Brittain, External Auditor (EY), Preeti Malik, External Auditor (EY), Alistair Rush, Group Finance Director, and Jonathan Malton, Committee and Member Services Manager, were present to respond to questions. 

The External Auditor (AB) summarised that the report has been brought to the Committee ahead of the commencement of the year-end audit. The Committee heard that the report outlined the risks that will be addressed during the audit, of which the results will be presented in early 2027. The External Auditor (AB) provided some context for the benefit of new committee members, including an update relating to the start of phase two implementation of new government measures to address the backlog facing local government audit, and context relating to previous disclaimed audit opinions of this Council. The Committee also heard of ongoing work to build back on assurances and to conduct risk assessments; the Committee would have a view of these in the future. The External Auditor (AB) assured the Committee that updates would be provided on the audit progress and that regular meetings would be held with the Group Finance Director. 

Councillor Fry, in relation to previously noted issues, asked whether the External Auditor felt that the Council could now satisfactorily act on the External Auditor’s recommendations and make the required changes.  

The External Auditor (AB) explained that meetings had been ongoing with relevant officers in relation to the valuation approach, and improvements have been considered and factored into the next audit.   

The Group Finance Director agreed and informed the Committee that the Council intends to complete a full asset valuation by this time next year.  

The External Auditor (PM) provided a comprehensive summary of the risks noted in the report. In relation to materiality, the Committee were informed of the threshold used when planning and performing the audit to determine the level at which an error or omission in the financial statements could reasonably influence the decision of a user of the accounts. The External Auditor (PM) noted that this has been set at £5.68 million, representing 2% of the Council's gross expenditure on the provision of services of 284 million. The Committee was reminded that this figure may be reassessed beyond the planning stage of the audit. Performance materiality was also summarised and noted as being set at 50% of the planning materiality due to the audit history, including areas where assurance could not be fully obtained in prior years. The External Auditor (PM) summarised this approach as more cautious. 

The External Auditor (AB) provided a summary of work on the value for money conclusions within the report. The Committee was reminded that this is an opinion based on whether there are arrangements in place to deliver value for money in terms of the economy, efficiency, and effectiveness across the governance and financial stability arrangements. The External Auditor (AB) concluded that no specific or significant weaknesses were identified  ...  view the full minutes text for item 104