The Audit Plan – template user guide
Contents
1. Grant Thornton Business Efficiency Board Update Year ended 31 March 2015 May 2015 Mark Heap Director T 0161 234 6375 E mark r heap uk gt com Liz Temple Murray Manager T 0161 214 6370 E liz m temple murray uk gt com John Padfield Executive T 0161 214 6378 E john padfield uk gt com The contents of this report relate only to the matters which have come to our attention which we believe need to be reported to you as part of our audit process It is not a comprehensive record of all the relevant matters which may be subject to change and in particular we cannot be held responsible to you for reporting all of the risks which may affect your business or any weaknesses in your internal controls This report has been prepared solely for your benefit and should not be quoted in whole or in part without our prior written consent We do not accept any responsibility for any loss occasioned to any third party acting or refraining from acting on the basis of the content of this report as this report was not prepared for nor intended for any other purpose Contents Section Page Introduction 4 Progress at May 2015 5 Emerging issues and developments 8 2015 Grant Thornton UK LLP Introduction This paper provides the Business Efficiency Board with a report on progress in delivering our responsibilities as your external auditors The paper also includes a summary of emerging national issues and developments2. LGPS funds in England and Wales is based on comprehensive research with pension fund senior officers supported by insights from pension fund auditors and is available at http Awww grant thornton co uk Publications 2015 Stronger futures development of the LGPS With the LGPS continuing to face significant change and challenge there is a clear commitment to ensuring its survival and the provision of affordable pension benefits for the future Following the implementation of a career average pension scheme in 2014 administering authorities are preparing for significant changes in governance arrangements effective from April 2015 Some of the key messages from the report are GrantThomton Stronger futures there are increasing strong examples of innovation and increased collaborative working across the LGPS to achieve reduced costs and improved use of specialist skills and knowledge implementation of the career average scheme from April 2014 went well and demonstrated good project management and effective communication with members and employers and there have been several other positive trends across the LGPS since our 2013 review particularly around the widening scope of reporting to Pension Committees including performance reporting risk management and internal audit reviews However we saw a wide variation in practice including a concentration of risk reporting on investment risk over half of funds have not implemented the C
3. are required to issue a detailed accounts audit plan to the Council setting out our proposed approach in order to give an opinion on the Council s 2014 15 financial statements Interim accounts audit Our interim fieldwork visit including updated review of the Council control environment e updated understanding of financial systems e review of Internal Audit reports on core financial systems early work on emerging accounting issues e early substantive testing proposed Value for Money conclusion 2015 Grant Thornton UK LLP Planned date Complete March 2015 Complete December In progress 2014 to March 2015 on track all planned to be met Fee letter Progress Reports and Audit Plan delivered to plan Comments We sent the Planned fee letter for 2014 15 to the Council on 24 April 2014 and presented it to the Board on 11 June 2014 The Audit Commission recently confirmed an updated scale fee of 140 392 to take into account a supplementary fee for audit work on business rates The Audit Plan will be presented to this meeting of the Business Efficiency Board We have built on our knowledge of the Council following the audit last year We have substantially completed our interim work and issues arising are set out in the Audit Plan presented to this meeting of the Business Efficiency Board Progress at May 2015 Audit and certification work 2014 15 final accounts audit Including audi
4. in meeting the commitments in its action plan Following the exposure in May 2011 of abuse of patients at the Winterbourne View Hospital the Department of Health set out its action plan in the Winterbourne View Concordat for moving people with learning disabilities and challenging behaviour out of hospital and into community care At September 2014 however there were still 2 600 inpatients with learning disabilities in mental health hospitals although NHS England s stated ambition is to discharge 50 of these into more appropriate care settings by 31 March 2015 As the NAO also report that there is no financial incentive for local commissioners to bring such patients home They have to bear the additional costs of expanding local community services to meet the patients needs following discharge from hospital when NHS England had centrally funded patients care in mental health hospitals 2015 Grant Thornton UK LLP 12 Grant Thornton 2015 Grant Thornton UK LLP All rights reserved Grant Thornton means Grant Thornton UK LLP a limited liability partnership Grant Thornton is a member firm of Grant Thornton International Ltd Grant Thornton International References to Grant Thornton are to the brand under which the Grant Thornton member firms operate and refer to one or more member firms as the context requires Grant Thornton International and the member firms are not a worldwide partnership Services are d
5. that may be relevant to you Members of the Business Efficiency Board can find further useful material on our website www grant thornton co uk where we have a section dedicated to our work in the public sector http Awww grant thornton co uk en Services Public Sector Here you can download copies of our publications including e Working in tandem local government governance review 2014 our third annual review assessing local authority governance highlighting areas for improvement and posing questions to help assess the strength of current arrangements 2016 tipping point Challenging the current summary findings from our third year of financial health checks of English local authorities Local Government Pension Schemes Governance Review a review of current practice best case examples and useful questions to assess governance strengths e Responding to the challenge Alternative Delivery Models in Local Government If you would like further information on any items in this briefing or would like to register with Grant Thornton to receive regular email updates on issues that are of interest to you please contact either your Engagement Lead or Engagement Manager Mark Heap Engagement Lead T 0161 234 6375 M 07880 456 204 E mark r heap uk gt com Liz Temple Murray Engagement Manager M 07880 456 171 E liz m temple murray uk gt com 2015 Grant Thornton UK LLP Progress at May 2015 Audit work 2014 15 Accounts Audit Plan We
6. yet started Comments The detailed guidance from the Audit Commission has been published on its website for the benefit of auditors and audited bodies This includes the key areas for consideration that will be reviewed under both the criteria We have carried out an initial risk assessment to determine our approach and report this in our audit plan The letter reporting the outcome of our certification work 2013 14 was presented to the February 2015 BEB meeting The Housing Benefit claim certified with no qualification letter and a small amendment The Silver Jubilee Bridge and Mersey Gateway Bridge transport claims certified with no amendment or qualification letters Progress at May 2015 Planned Non audit services work date Complete Comments Other activity undertaken claims and returns PEN 28 PEN We completed the Teachers Pensions return by the You asked us to provide a report on a number of claims November complete deadline there were no amendments and nothing to report that do not fall under the Audit Commission regime 2014 RGF re by exception The final fee was the same as the agreed fee e independent report on Teachers Pensions return RGF Feb ecnedled of 4 200 j vari died Growih Fund cain 2015 revised The DCLG has recently informed the Council of new RGF agreed fee 3 110 date June deadlines for RGF claims 15 June 2015 for submission by 2015 the Council and 30 June for the auditor s re
7. IPFA knowledge and skills framework as part of their member training 45 per cent of Pension Committees do not receive internal audit reports and 15 per cent do not have specific internal audit coverage and nearly half of funds have no information around the value of their liabilities in between the triennial valuations Hard copies of our report are available from your Engagement Lead or Engagement Manager 2015 Grant Thornton UK LLP Independent Commission into Local Government Finance Local government issues The Independent Commission on Local Government Finance was established in 2014 to examine the system of funding local government in England and bring forward recommendations on how it can be reformed to improve funding for local services and promote sustainable economic growth It published its final report Financing English Devolution on 18 February 2015 The report notes that the core of the Commission s proposition is the devolution of powers funding and taxes to sub national entities over a 10 year period They estimate that this could lead to over 200 billion in public expenditure being controlled at a sub national level The expectation is that councils and their partners would work collaboratively to manage differences in capacity and resources They see local areas becoming self sufficient The Commission advocates a variable speed approach to reform with Pioneers able to and wishing to reform at a faster pace Re
8. ar it is failing in its duties to protect vulnerable children and young people from harm It summarises the following serious failings e acouncil in denial about serious and on going safeguarding failures e an archaic culture of sexism bullying and discomfort around race e failure to address past weaknesses in particular in Children s Social Care weak and ineffective arrangements for taxi licensing which leave the public at risk ineffective leadership and management including political leadership no shared vision a partial management team and ineffective liaisons with partners e culture of covering up uncomfortable truths silencing whistle blowers and paying off staff rather than dealing with difficult issues The report has had widespread press coverage and in a statement in the House of Commons the Secretary of State confirmed that he is considering exercising his powers of intervention in relation to Rotherham 2015 Grant Thornton UK LLP 11 Care services for people with learning disabilities and challenging behaviour Local government issues The National Audit Office NAO published its report Care services for people with learning disabilities and challenging behaviour on 4 February 2015 It concludes that the Government has not met its central goal of moving people with learning disabilities and challenging behaviour out of hospital by 1 June 2014 because it underestimated the complexity and level of challenge
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10. forms advocated for all authorities include An independent review of the functions and sustainability of local government in advance of the next spending review e Freedom to set council tax and council tax discounts and full retention of business rates and business rates growth Multi year financial settlements The ability to raise additional revenue through the relaxation of the rules on fees and charges Pioneer authorities would also implement Single placed based budgets for all public services Management of funding equalisation across a sub national area e Further council tax reforms including the ability to vary council tax bands and undertake revaluations Newly assigned and new taxes such as stamp duty airport taxes and tourism taxes The establishment of Local Public Accounts Committees to oversee value for money across the placed base budget 2015 Grant Thornton UK LLP Inspection into the governance of Rotherham Council Local government issues On 4 February 2015 the Secretary of State for Communities and Local Government Eric Pickles announced the publication of Louise Casey s report Her inspection of the exercise of functions on governance children and young people and taxi and private hire licensing states Rotherham Metropolitan Borough Council is not fit for purpose It is failing in its legal obligation to secure continuous improvement in the way in which it exercises its functions In particul
11. ing This will also include an update on key financial changes to support your review of the draft financial statements Birmingham 8 July 2015 The Evolving Local Government Audit Committee Agenda Understanding and managing key risks particularly in relation to saving plans the assurance framework and alternative delivery models Birmingham 21 October 2015 Forthcoming publications Grant Thornton is the appointed external auditor to around 40 of local government bodies in England giving us an excellent insight into the key issues facing the sector and the solutions being adopted across the country From research meeting with key people carrying out presentations and workshops and attending audit committees we find that many of the key issues raised and risks faced are common to many authorities We have a programme of publications for up to date insight and analysis from our technical sector and service teams such as our December 2014 report Rising to the Challenge on financial health at English local authorities Planned publications relevant to local authorities include Welfare Reform second report Health and Wellbeing Guide Place Analytics e Alternative Delivery Models 2 report Where Growth Happens 2 report 2015 Grant Thornton UK LLP Stronger futures development of the Local Government Pension Scheme Grant Thornton Our second review on governance in local government pensions scheme
12. port Other activity undertaken tax By March Substantially Tax work comprises Construction Industry Scheme training Other service lines within Grant Thornton UK LLP have 2015 complete workshop review of the tax treatment of the Council s salary undertaken Tax Employee Solutions work for the sacrifice scheme and advice relating to the Mersey Gateway Council Crossings project Tax agreed fee 8 750 Other activity undertaken VAT By March Substantially VAT work includes advice and queries on the development of Other service lines within Grant Thornton UK LLP have 2015 complete Norton Priory the pooled budget option to tax Runcorn Hill undertaken VAT advice and Tax Employee Solutions Park Caf the treatment of dilapidations s106 GPark work for the Council Widnes Assist Education e VAT agreed fee 25 800 27 800 Note re Other activity undertaken e We are required to disclose in writing to the Council the auditor independence assessment and summary of non audit services and related safeguards and that we are independent and the objectivity of the audit partner and audit staff are not impaired We confirm that we are satisfied that our independence as external auditor to the Council will not be impaired by any of this additional work The tax and VAT work will be led and undertaken by a team separate from the audit team our work does not involve making decisions on management s behalf The certification work is in line wi
13. t of the 2014 15 financial statements and Whole of Government Accounts WGA proposed opinion on the Council s accounts and WGA proposed Value for Money conclusion Value for Money VfM conclusion The scope of our work to inform the 2014 15 VfM conclusion comprises the two criteria specified by the Audit Commission e The organisation has proper arrangements in place for securing financial resilience The focus will be on whether the Council has robust systems and processes to manage effectively financial risks and opportunities and to secure a stable financial position that enables it to continue to operate for the foreseeable future e The organisation has proper arrangements for challenging how it secures economy efficiency and effectiveness The focus will be on how the Council is prioritising its resources within tighter budgets for example by achieving cost reductions and by improving efficiency and productivity Other areas of work certification work under the Audit Commission Regime e 2013 14 Housing Benefit HB Two transport TRA Mersey Gateway and Silver Jubilee Bridge e Grant Certification 2014 15 Housing Benefit transport claims 2015 Grant Thornton UK LLP Planned date June to September 2015 January to September 2015 HB 28 November 2014 TRA 31 December 2014 November and December 2015 respectively Complete Not yet started In progress 2013 14 complete 2014 15 not
14. th certification work completed under the Audit Commission framework the scope does not include making decisions on behalf of management or recommending or suggesting a particular course of action for management to follow e Weare required to seek specific approval from the Audit Commission for Grant Thornton to undertake additional work over a threshold of 20 of the audit fee We can confirm that the Audit Commission has noted our arrangements to ensure independence and approved the additional fee work noted above 2015 Grant Thornton UK LLP 7 Grant Thornton training and publications Grant Thornton Accounts workshops for local government officers Officers attended our Grant Thornton CIPFA workshops in March for preparers of accounts at local government bodies Grant Thornton workshops for members Grant Thornton s Midlands Local Government Audit Committee Member Network has published its programme of events for 2015 This included for example the February workshop on Governance Challenges and Priorities for 2015 covering Financial integrity reinforcing audit quality improving information quality and focusing on assurance This programme has been shared with the Chair and Vice Chair We are planning to run a similar programme of events in the Northwest in the future Forthcoming workshops are listed below Fit for Purpose following the Elections Undertaking self assessments and using skills audits to identify gaps for train
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