Issue - meetings
External Audit Plan (KPMG)
Meeting: 26/03/2013 - Audit Committee (Item 5)
5 External Audit Plan (KPMG) PDF 546 KB
To consider the Audit Plan submitted by KPMG
Minutes:
KPMG partner, Andrew Sayers presented the report circulated at agenda item 5.1. He advised the Committee that the key audit areas of the plan were:
- savings plans,
- property plant and equipment,
- actuarial asset value of retirement benefits, and
- accounts receivable and accounts payable.
As the Council’s auditors, KPMG would examine the processes being followed in each of these four areas and noted the previous matters raised regarding the audit of the accounts receivable/payable processes.
Mr Sayers also advised the Committee of KPMG’s independence and objectivity responsibilities as required under the code; these were summarised at page 9 of the report.
Referring to the salient parts of the report, Mr Sayers advised that KPMG would complete an audit of the pension fund alongside the main financial accounts audit. He advised that the main area of audit risk regarding the pension fund was the valuation of investments.
He confirmed the fees proposed for 2012/13 set out at page 21 of the report. This set out the basis of the audit fee. He advised that any queries raised would be considered as additional fees and that KPMG was able to receive queries from the Committee and take these up with the Executive.
In response to Members’ questions the following information was discussed:
Concerning the scope of the savings plan Key risk that had been identified at page 3 of the report, Mr Sayers advised that the auditors would look to ensure that processes were in place so that the Council could take forward its investments. This would be undertaken in the form of top-line monitoring.
Concerning how the scale of fees was derived, Mr Sayers advised that these were set by the Audit Commission and a fee reduction had been achieved through the procurement the process carried out by the Audit Commission.
Concerning how many additional investigations the Council could expect the Auditors to recommend, Mr Sayers advised that KPMG would seek additional audits only where necessary. Additionally a safety mechanism against excessive additional audits was imposed by the Audit Commission. KPMG would ensure that money was not spent outside the permitted sphere by interrogating how Council money was well spent and investigation to ascertain why funds had been spent on particular audits. If spending was discovered that was against the Council’s general policies, the Council would be asked to justify its spending. Mr Sayers additionally advised that any elector was able to refer to KPMG and he would consider each referral to assess if they needed to be investigated.
Noting the fee reduction achieved because of the fee scales set by the Audit Commission and economies of scale gained through outsourcing local government audits, Councillor Eaton enquired whether the Audit Commission had operated efficiently, Mr Sayers advised that he was unable to comment on Audit Commission matters. However he advised that KPMG had offered a price that it felt that delivered the required audit levels at a suitable price. He noted additionally that some work being undertaken by KPMG was different to ... view the full minutes text for item 5