R Lee presented the current external audit plan for the Authority audit and explained the context and scope of the Plan. It was explained that this report related to the financial statements and that documents regarding the Value for Money risk assessment would be circulated separately.

It was explained that KMPG worked closely with Internal Auditors, IT specialists, VAT specialists, Officers and industry bodies to cover areas of risk when forming the Plan and as a result two main areas of risk had been identified:

                 i.          Management override of controls

                ii.          Valuation of post retirement benefit obligations

R Lee and E Wharton explained that the Pension Fund audit plan was not yet ready to present as a full report and instead presented an indicative risk assessment for the  Pension Fund audit of year ending 31 March 2024 (not included in the agenda pack).  The indicative risks had been identified as:

         i.          Management override of controls

        ii.          Contributions

      iii.          Investments

      iv.          Cash

       v.          Actuarial Present Value of Promised Retirement Benefits

The external auditor explained that their planning activities and risk assessment procedures were still on-going, and they would communicate their audit approach in full once this work has reached the appropriate stage.

Members drew attention to the significant increase in fees for the external auditors from 2022/23 to 2023/24. The external auditor explained that the fees were set externally by Public Sector Audit Appointments.

The Committee asked for clarification on the costs, definition, and implications of ISA 315r and ISA 240. The external auditors explained that these were audit industry standards with detailed targets auditors had to meet and placing additional requirements on their work.

The Chair questioned when the full and complete report inclusive of the Value for Money risk assessment would be available. Richard Lee stated that the full report would be completed before the next meeting of the Committee but that with the agreement of Members and Officers it could be circulated on completion (which is planned for the end of the financial year 2023/24).

Members asked for clarity on VAT in relation to the Authority. KPMG explained that they are using a VAT specialist to complete the Plan due to the unique VAT arrangements SYPA have with HMRC.

RESOLVED:

a)     Members reviewed and noted the external audit plan at Appendix A.

a)     Members noted that the accompanying report related solely to the Authority Audit for the year ending 31 March 2024; the Fund plan was to be circulated upon completion.