Agenda item

This report presents the Audit Strategy Memorandum for City of York Council for the year ending 31 March 2016.  The document summarises the audit approach taken by Mazars, highlights significant audit risks and provides details of the audit team.

[Councillor Barnes withdrew from the meeting for this item.  Councillor Dew in the Chair]

Members considered a report which presented the Audit Strategy Memorandum for City of York Council for the year ending 31 March 2016.  The document summarised the audit approach taken by Mazars, highlighted significant audit risks and provided details of the audit team.

Representatives from Mazars drew Members’ attention to the significant risks and key judgement areas, as outlined in section 3 of the report, and of the criterion for the value for money conclusion.

Members noted the proposed fees for the audit work, including additional work considered necessary in relation to the value for money conclusion.  The work would include:

·        A review of the Community Stadium project

·        A review of the operation of the first year of the Better Care Fund

·        Follow up on progress made on the housing for older people procurement and

·        A review of the operation of the improved programme and project management arrangements

Members queried whether Mazars would be considering the risks facing the Council in its dealings with arms length organisations and the associated governance arrangements. They were informed that the recommendations contained within the Public Interest Report did not apply solely to City of York Trading Ltd and hence the actions arising from the report would have implications in respect of the council’s working arrangements with other organisations.

The representatives from Mazars were asked if consideration had been given to the risks involved in respect of the York Central project in view of the significance of the project and the need to ensure that it was steered appropriately.  They stated that, at this stage, they did not consider that the project merited a separate audit although it would be included in the work that would be carried out in respect of project management and they would reflect on the issues that Members had raised.  Officers commented that no detailed funding arrangements had been agreed at this stage.

Clarification was sought regarding the proposed review of the Community Stadium.  Members were informed that the work would be in greater detail than the previous audit and that its scope would be brought to the committee’s attention.  Factors that had been taken into account when determining that a further review would take place had been the significant change in finance and the change in the project’s personnel.

Referring to the section on group audit approach, Members noted that the Council’s view was that group accounts were not required for 2015/16 in respect of City of York Trading Ltd and Make it York although the fully audited accounts of all the Council’s trading subsidiaries would be made available to Mazars as part of the audit of the Council’s accounts.  Members sought clarification from Mazars as to the circumstances in which they would challenge the Council’s view that the group accounts were not required.  They were informed that if the Council increased trading with external organisations this view would need to be reconsidered. 

Members suggested that it would be useful if Mazars were able to provide examples of best practice in respect of Annual Governance Statements.

At the request of Members, details were given of the factors that were taken into account when setting the audit fees and determining the scope of the work. 

Members requested that the Council provide a cover report in respect of reports presented by Mazars to include recommendations for consideration by the committee.¹

Resolved:  That the report be noted.

Reason:     To ensure that the committee is kept updated on progress made by the external auditors.