Agenda item

i)          London Borough of Havering

The Council’s external auditor’s Ernst & Young presented their audit plan for 2017/18.  The purpose of the report was to provide the Committee with a basis to review its proposed audit approach and scope for the 2017/18 audit in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office’s 2015 Code of Audit Practice, the Statement of Responsibilities issued by Public Sector Audit Appointments Ltd, auditing standards and other professional requirements.  It was also to ensure that the external auditor’s audit was aligned with the Committee’s service expectations.

The plan summarised the external auditor’s initial assessment of the key risks driving the development of an effective audit for the Council, and outlined their planned audit strategy in response to those risks.

The Council would likely to have entered into joint venture arrangements for the redevelopment and regeneration of the Rainham and Beam Park Housing Zone, Bridge Close and 12 housing estates within the borough.  Funding these schemes would commit the Council to significant levels of borrowing.  It was highlighted that given the significance and importance of these decisions to the Council’s strategic, operational and financial priorities, the effectiveness of the governance and risk management arrangements related to these key decisions were crucial.

The timetable of communication and deliverables would be tight, with the Year End Audit scheduled for June/July and the Audit Committee procedures scheduled for July with the Audit Results Report and Audit Opinions and completion certificates being presented to the Committee on the 25 July 2018.

The duty to prescribe fees was a statutory function delegated to Public Sector Audit Appointments Ltd (PSSA) by the Secretary of State for Communities and Local Government.  The proposed final fee for 2016/17 included a proposed variation of £20,858 to the PSAA scale fee of £151,844, which arose from additional procedures undertaken which related to the valuation of property, plant and equipment; the consolidation of balances which related to Mercury Land Holdings; obtaining transaction listing to support amounts disclosed in the Council’s financial statements; and the Council’s Whole of Government Accounts submission.

Overall, the external auditors considered that the safeguards that had been adopted appropriately mitigated the principal threats identified.

ii)         Havering Pension Fund

The Council’s external auditor’s Ernst & Young presented their audit plan for

the Havering Pension Fund.

The plan summarised the external auditor’s initial assessment of the key risks driving the development of an effective audit for the Pension Fund, and outlined their planned audit strategy in response to those risks.

The Audit Plan covered the external auditor’s opinion on whether the financial statements of the Havering Pension Fund gave a true and fair view of the financial transactions of the Pension Fund during the year ended 31 March 2018 and the amount and disposition of the Fund’s assets and liabilities as at 31 March 2018; and their opinion on the consistency of the Pension Fund financial statements within the Pension Fund annual report with the published financial statements of the London Borough of Havering Council.  The indicative fee for the audit of the Pension Fund was £21,000.

RESOLVED:

That the Committee noted the contents of the report.