Agenda Item No
The Vale of Glamorgan Council
Audit Committee: 17 September 2012
Report of the Managing Director
External Auditors Accounts Audit Approach Memorandum
Purpose of the Report
1. To present the Council's External Auditor's Accounts Audit Approach Memorandum 2011-12.
That Audit Committee:
1. Review and note the content of this Report
Reasons for the Recommendations
1. To facilitate monitoring of the audit function.
2. The Council's External Auditors are Grant Thornton UK LLP (GT). The attached report at Appendix A is intended to provide additional details regarding their audit approach, as set out in their Audit Plan 2011-12, issued in March 2012 (attached at Appendix B), as well as an update on their response to key audit risks following their interim audit work.
Relevant Issues and Options
3. The report summarises the findings from the interim stage of GT's work where they have considered the following:
The effectiveness of the internal audit function;
Internal Audit's work on the Council's key financial systems;
A review of closedown procedures in preparation for the final accounts under International Financial Reporting Standards (IFRS);
Review of Information Technology controls;
The work of valuation experts employed during the accounting period;
Walkthrough testing and tests of controls to confirm whether controls are implemented as per GT's understanding in areas where they have identified significant accounting assertion risks.
4. Overall GT have concluded the following:
That the Internal Audit Service continues to provide an independent and satisfactory service to the Council and that GT can take assurance from this work in contributing to an effective internal control environment at the Council;
GT were pleased to note that there were no issues identified from the review of internal audit work and that the files reviewed were produced to a high standard.
The Council has established a suitable timetable and expects to meet the deadline for submission of the accounts. GT has also stated that the Council also expects to be able to provide detailed working papers to support the accounts at the start of their final accounts audit fieldwork, as well as providing the draft Annual Governance Statement and explanatory foreword.
No significant issues were noted and in-year internal controls were observed to have been implemented and operate satisfactorily in accordance with GT's documented understanding.
GT's information systems specialist performed a high level review of the general IT control environment, as part of the overall review of the internal controls systems. It was concluded that, from the work undertaken to date, there are no material weaknesses which are likely to adversely impact on the Council's financial statements.
Resource Implications (Financial and Employment)
5. The costs associated with the work undertaken by GT are part of the overall agreed external audit fee for the financial audit which is £147,564
Sustainability and Climate Change Implications
6. None directly from this report.
Legal Implications (to Include Human Rights Implications)
7. Under the provisions of the Public Audit (Wales) Act 2004 the Auditor General for Wales (Auditor General) is responsible for appointing external auditors (Appointed Auditors) to local government bodies. The Appointed Auditors is required under the Public Audit (Wales) Act 2004 to examine and certify the accounts of the council.
Crime and Disorder Implications
8. None directly from this report.
Equal Opportunities Implications (to include Welsh Language issues)
9. None directly from this report.
10. This report is consistent with the Council's corporate objectives to ensure effective management of resources.
Policy Framework and Budget
11. This report is in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
12. No further consultation is proposed.
Relevant Scrutiny Committee
13. Corporate Resources
Alan Jenkins - Head of Accountancy and Resource Management
External Audit - Grant Thornton UK LLP
Sian Davies, Managing Director