Supplementary Audit Opinion Plan

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					3 June 2009

Paul Hymers                                                 Direct line       0844 798 4057
Corporate Director
Corby Borough Council
Grosvenor House
George Street
Corby Northants
NN17 1QB

Dear Paul

Supplementary Audit Opinion Plan
We issued the initial audit plan for 2008/09 in May 2008 and it went to the Audit and
Governance Committee on 25 June 2008.

This set out the work that I proposed in order to satisfy my responsibilities under the Audit
Commission’s Code of Audit Practice. As this plan was produced at the start of the financial
year to give you an indication of the proposed fee, I was not able at that time to specify the
detailed risks that I would need to consider as part of my audit opinion work. I am now in a
better position to do this.

This letter represents my supplementary opinion plan under International Standard on Auditing
(United Kingdom and Ireland) 300. The above standard requires me to:

   •   identify the risk of material misstatements in your accounts;

   •   plan audit procedures to address these risks; and

   •   ensure that the audit complies with all relevant auditing standards.

I have therefore considered the existing and additional risks that are appropriate to the current
opinion audit and I have set these out below, together with my current assessment. If necessary
I will update this.

 Risk Area                             Residual risk    Audit response
 Quality of draft statement of         Yes              Liaise with officers regarding
 accounts approved by members                           arrangements for close-down for
 and presented for audit                                2008/09, including those for
                                                        internal review of draft statements
                                                        and supporting evidence


Audit Commission, Rivermead House, 7 Lewis Court, Grove Park, Enderby,
Leicestershire, LE19 1SU
T 0844 798 3311 F 0844 798 4422 www.audit-commission.gov.uk
                                                2



 Risk Area                             Residual risk    Audit response
                                                        Carry out a review of skeleton
                                                        statements to help ensure
                                                        compliance with requirements
                                                        Arrange accounting workshops
                                                        for LA staff to hear AC views on
                                                        major developments


 Underachievement of income            Yes              Enquired about CBC response
 budgets eg concessionary fares,                        and assess for reasonableness
 planning & building control, and                       Review as part of audit of
 investment income due to                               statements of account
 economic downturn

 Lack of prompt and proper             Yes              Monitor progress, including IA
 reconciliations between bank                           review of bank reconciliations.
 account and cash account in main                       Review year end bank
 ledger                                                 reconciliation.
 The recession has had a               Yes              Give early notice of this
 negative impact on asset                               expectation so that officers can
 values. There is a risk                                justify the particular
 that the Authority's assets                            circumstances presented in the
 may not have been                                      accounts
 appropriately impaired
 and are overvalued.

In our original audit plan, the estimated fee for the 2008/09 opinion audit was based on my best
estimate at the time and agreed at £59,230 as part of a total audit fee of £109,230. The latter
figure excludes the cost of inspection work this year.

At this stage the original fee estimate for our opinion audit appears appropriate and no
adjustment is required. However, I will keep the fee under review as the opinion audit
progresses. If I need to amend the fee subsequently, I will first discuss it with you.



Yours sincerely




Neil Bellamy
District Auditor
29 April 2009

Mr Chris Mallender                                         Direct line    0844 798 4069
Chief Executive                                            Email          n-toms@audit-
Corby Borough Council                                                     commission.gov.uk
Grosvenor House
George Street
Corby
Northamptonshire
NN17 1QB


Dear Chris

Annual inspection fee 2009/10
I am writing to confirm the assessment and inspection work that we propose to undertake for the
2009/10 financial year at Corby Borough Council. The inspection fee:

   •   is based on the risk-based approach to inspection planning as set out in the
       Comprehensive Area Assessment (CAA) framework and associated guidance; and
   •   reflects only the Audit Commission’s inspection work, excluding any audit fees. Your
       appointed auditor will be writing to you separately on fees for audit work.


CAA will deliver a more proportionate and risk based approach to inspection, targeting only high
risk services and outcomes for inspection where alternative improvement activity is not
appropriate. The inspection plan will be reviewed and updated as necessary.

The total indicative fee for inspection for 2009/10 is £8,320 and is shown in the table below.
The inspection fee has been set in accordance with the Audit Commission‘s work programme
and scales of fees 2009/10.

Assessment and inspection work plan and fee

   Assessment / inspection activity                                Planned fee for 2009/10

   Area assessment of local partnership                                  n/a (CLG grant funded)

   Managing performance theme of organisational assessment                               £8,320

    Total inspection fee                                                                 £8,320



Audit Commission, Rivermead House, 7 Lewis Court, Grove Park, Enderby,
Leicestershire, LE19 1SU
T 0844 798 3311 F 0844 798 4422 www.audit-commission.gov.uk
                                                   2




If I need to make any significant amendments to the inspection plan and fee during the course
of the year, I will first discuss this with you and then confirm in writing outlining the reasons for
the change, including the proposed scope for the work.

The above fee excludes any work you requested and the Commission has agreed to undertake
using its advice and assistance powers.

If you have any questions regarding this letter, please contact me in the first instance.
Alternatively you may wish to contact the East Midlands Head of Operations, Alison Rigg.



Yours sincerely,




Nigel Toms
Comprehensive Area Assessment Lead

cc Paul Hymers, Corporate Director of Resources CBC
Our reference     RG03

24 April 2009

Chris Mallender
Chief Executive
Corby Borough Council



Dear Chris

Annual audit fee 2009/10

Further to our discussions, I am writing to confirm the audit work that we propose to undertake
for the 2009/10 financial year at the Council. The fee:
   •   is based on the risk-based approach to audit planning as set out in the Code of Audit
       Practice and work mandated by the Audit Commission for 2009/10; and
   •   reflects only the audit element of our work, excluding any inspection and assessment
       fees. Your Comprehensive Area Assessment Lead will be writing to you separately on
       inspection fees.
As I have not yet completed my audit for 2008/09 the audit planning process for 2009/10,
including the risk assessment will continue as the year progresses and fees will be reviewed
and updated as necessary.
The total indicative fee for the audit for 2009/10 is for £110,600 (exclusive of VAT) which
compares to the planned fee of £109,230 for 2008/09. A summary of this is shown in the table
below.

   Audit fee
    Audit area                                  Planned fee            Planned fee
                                                2009/10                2008/09
    Financial statements                                      59980                59230
    Use of Resources/VFM Conclusion                           48540                47935
    [including risk based work]
    WGA                                                         2080                 2065
    Total audit fee                                          110600               109230
    Certification of claims and returns                       34000                36080




Audit Commission, Rivermead House, 7 Lewis Court, Grove Park, Enderby,
Leicestershire, LE19 1SU
T 0844 798 3311 F 0844 798 4422 www.audit-commission.gov.uk
                                                  2


The Audit Commission has published its work programme and scales of fees 2009/10. The
scale fee for the Council is £110,300. The fee proposed for 2009/10 is slightly above this and is
1.25% more than last year.
In setting the fee at this level, I have assumed that:
   •   the difficulties which arose in 2007/08 on the opinion audit will not recur. These resulted
       in an extra fee of £15000 for 2007/08;
   •   we will need to carry out a review of a new Internal Audit provider.
We will issue a separate plan for the audit of the financial statements in early summer 2010.
This will detail the risks identified, planned audit procedures and any changes in fee.
The quoted fee for grant certification work is an estimate only and will be charged at published
daily rates. It reflects a possible reduction in the fee for the audit of the housing benefits claim.
We are trialling a new approach for the 2008/09 claim but do not yet know if it will be successful.
If I need to make any significant amendments to the audit fee during the course of the audit, I
will first discuss this with the Corporate Director - Resources and then prepare a report outlining
the reasons why the fee needs to change for discussion with the Audit and Governance
Committee.
My use of resources assessments will be based upon the evidence from three themes:
   •   Managing finances;
   •   Governing the business; and
   •   Managing resources.
The key lines of enquiry specified for the assessment are set out in the Audit Commission’s
work programme and scales of fees 2009/10. Our current work on use of resources, which is
underway, will inform my 2009/10 value for money conclusion. However, I have identified a
significant risk in relation to my value for money conclusion. I consider the arrangements put in
place by the Council to mitigate the risk, and plan my work accordingly. My initial risk
assessment for value for money audit work is shown in the table below:

          Risk                            Planned work                  Timing of work
          Impact of the economic          We will review the          April 2009 –
          downturn on the Council’s       Council’s arrangements      March 2010
          Medium Term Financial           and response to managing
          plans and capital               the impact of the
          programme.                      economic downturn on
                                          future plans as part of our
                                          work on Use of
                                          Resources.


I will issue a number of reports relating to my work over the course of the audit. These are listed
at Appendix 1.
                                                 3


The above fee excludes any work requested by you that the Commission may agree to
undertake using its advice and assistance powers. Each piece of work will be separately
negotiated and a detailed project specification agreed with you.
The key members of the audit team for the 2009/10 are:
Audit Manager – Chris Leeland      0844 798 4101
Team Leader – Sue Byles            0844 798 4058
I am committed to providing you with a high quality service. If you are in any way dissatisfied, or
would like to discuss how we can improve our service, please contact me in the first instance.
Alternatively you may wish to contact the East Midlands Head of Operations, E.Midlands (e-
midlands@audit-commission.gov.uk ).


Yours sincerely




Neil Bellamy
District Auditor

cc Corporate Director – Resources

cc Head of Financial Services

cc Chair of the Audit and Governance Committee
                                                4



   Appendix 1: Planned outputs
Our reports will be discussed and agreed with the appropriate officers before being issued.

   Table 1


   Planned output                               Indicative date
   Plan for the audit of the financial          May 2010
   statements
   Annual governance report                     September 2010
   Auditor's report giving the opinion on the   September 2010
   financial statements and value for money
   conclusion
   Use of resources report                      September 2010
   Final accounts memorandum (to the            October 2010
   Director of Finance)
   Annual audit letter                          November 2010

				
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Description: Supplementary Audit Opinion Plan