Issue - meetings

To receive the external audit planning reports for both Hampshire County Council and the Hampshire Pension Fund for the year ending 31 March 2022.

The Committee received the annual audit planning report for 2021/22 from the external auditors. Members heard that:

·         There had been no significant change in the level of risk or focus identified from the previous year. A slight change was proposed to be taken in relation to auditing value for money, following the identification of an enhanced risk relating to the impact of Covid-19 on medium term financial planning.

·         A new risk had been introduced in relation to infrastructure assets, which had been identified nationally as a developing risk area when roads were deregistered by local authorities. In response to Members questions it was heard that this was not a concern identified within Hampshire, and the Chartered Institute of Public Finance and Accountancy (CIPFA) had instructed a task force to provide some clarity on appropriate audit approaches. Members challenged why public money was being spent on auditing this area when, as the road network was not an asset which could be sold, it made no tangible difference to the financial standing of the County Council, through which Members heard it was necessary to ensure that assets were correctly presented on the balance sheet.

·         In response to Members questions it was heard the effect of climate-related matters on financial statements was considered to be low risk and the auditors would look at any pledges by the County Council and Hampshire Pension Fund to reduce environmental impact and consider how progress against such pledges was being monitored and the potential impact on the Council’s finances.

·         A question was raised regarding audit risks outlined around inappropriate capitalisation of revenue expenditure and misstatements due to fraud or error. It was heard that this was a mandated audit requirement, and was considered to be a more significant risk in the private sector.

·         Materiality had been set 1.8% of gross expenditure, consistent with the approach taken in previous years.

·         The Audit timetable had been agreed with the Director of Corporate Operations, with the expectation that the Statement of Accounts would be signed off by the end of September, ahead of November deadline.

RESOLVED:

That the Audit Committee receives and notes the Hampshire County Council and Hampshire Pension Fund Audit Planning Reports for 2021/22.