Agenda and minutes

The members of the Regulation, Audit and Accounts Committee are asked to consider the External Audit Plans for West Sussex County Council 2019/20 and the West Sussex Pension Fund 2019/20.

Following the cancellation of the Regulation, Audit and Accounts Committee on 23 March 2020 due to the current public health emergency, the Chairman agreed to hold an informal, virtual meeting of members of the committee on 3 April 2020. The meeting was held in order to discuss the External Audit Plans with the External Auditors, EY, so they could continue their work.

These notes record the discussion of the members present.

Appended to the minutes are questions from the members, with officer responses, on other agenda items that were planned for review at the 23 March meeting.  These were submitted subsequently as written questions and were not discussed during the virtual meeting.

1.1     The Chairman welcomed Members, Officer and attendees from EY to the virtual meeting.

1.2     The Chairman had asked members to submit their questions in advance of the virtual meeting in order to better facilitate the running of the meeting.

1.3     The questions were grouped together by topic and presented to EY to answer during the meeting.

1.4     The first questions related to the change in materiality level and sought clarification on the reasoning and benefits behind this change.  Members queried what EY hoped to learn from this change and if this was considered more important than governance concerns.  Members also queried what the impact would have been to last year’s audit if the materiality level had been reduced.

1.5     Mr Mathers (EY) explained that EY had a professional responsibility to set materiality at an appropriate level which was important to do from their independent position.  EY felt that changing the level of materiality from 1.8% to 1% was the appropriate level.  The reasons behind the change included the fallout from the Children’s Services inspection which had highlighted volatility in spend and pressures on the revenue budget and due to more stakeholder interest in the council.  The risks involved with potential management override were also a factor.  Headline materiality was a consideration in that higher interest from stakeholders on the level of errors would be anticipated.  It was also confirmed that 1% was the industry standard.  Mr Mathers confirmed that no change was recommended for performance materiality as the County Council had a good track record for financial statement accuracy.

1.6     Mrs Thompson (EY) explained that the change in materiality level would increase the sample size of the audit work in that there would be greater coverage and more testing which would lead to an overall increase in assurance.

1.7     Members had submitted questions querying the impact COVID-19 on areas such as the External Audit Plans; the practicalities of the audit; the County Council’s ability to function as a Going Concern; Value for Money risks for the County Council’s operations and projects; fees; and the impact on 2020-21 revenue.

1.8     Mrs Thompson responded stating that operational and delivery risks were being considered.  EY’s general working approach was geared up for remote working and so the impact of isolation had been absorbed well.  The interim audit work had showed  ...  view the full minutes text for item 1.