6 - External Audit Plan 2023-24
North Ayrshire Council · 21 March 2024
Back to Audit and Scrutiny Committee — 21 March 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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NORTH AYRSHIRE COUNCIL 21 March 2024 Audit and Scrutiny Committee Title: External Audit Plan 2023/24 Purpose: To inform the Committee of the External Audit Plan for 2023/24. Recommendation: That Committee notes the External Audit Plan for 2023/24. 1. Executive Summary 1.1 Audit Scotland are the Council’s external auditors for the period 2022/23 to 2027/28, with 2023/243 being the second year of this appointment. 1.2 This report provides the Audit and Scrutiny Committee with details of Audit Scotland’s Annual Audit Plan for the 2023/24 audit. 1.3 Following completion of the audit, Audit Scotland will present their annual audit report to the Audit and Scrutiny Committee during Autumn 2024. 2. Background 2.1 Audit Scotland have been appointed as the Council’s external auditors for the period 2022/23 to 2027/28 with 2023/24 being the second year of this appointment. In addition, Audit Scotland are the appointed auditors for the North Ayrshire Integration Joint Board for the same period. 2.2 Audit Scotland’s Annual Audit Plan for the 2023/24 audit is attached at Appendix 1. A representative of Audit Scotland will be in attendance to present the plan to the Committee. 2.3 In planning the audit work, Audit Scotland have identified a number of key risks and these will form the basis of their audit plans for the year. 2.4 The Code of Audit Practice sets out four audit dimensions which set a common framework for all public sector audits in Scotland. Audit Scotland will consider the adequacy of the arrangements in place in relation to each of these, including: • Financial Management – consideration of the arrangements to secure sound financial management; • Financial Sustainability – consideration of the appropriateness of the use of the going concern basis;
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• Vision, Leadership and Governance – review of the arrangements in place to deliver the vision, strategy and priorities adopted by the Council; and • Use of Resources to Improve Outcomes – consideration of how the Council demonstrates economy, efficiency and effectiveness. 2.5 Other responsibilities will include: • Financial Sustainability – identified as an area of audit focus due to the challenging financial environment in which the council is operating; and • Best Value – assessment over the period of the audit appointment. 3. Proposals 3.1 That Committee notes the External Audit Plan for 2023/24. 4. Implications/Socio-economic Duty Financial 4.1 The fee which will be charged by Audit Scotland for the 2023/24 audit work will be £377,760. This represents an increase of £21,370 (6.0%) against the 2022/23 fee. Human Resources 4.2 None. Legal 4.3 None. Equality/Socio-economic 4.4 None. Environmental and Sustainability 4.5 None. Key Priorities 4.6 This report directly supports the Council Plan 2023 to 2028 by maximising financial flexibility to support the delivery of our priorities and focussing our investment on priorities. Community Wealth Building 4.7 None.
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5. Consultation 5.1 Audit Scotland consulted with the Head of Service (Finance) in preparing their audit plan. Mark Boyd Head of Service (Finance) For further information please contact David Forbes, Senior Manager (Strategic Business Partner), on 01294 324551. Background Papers None
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Prepared for North Ayrshire Council March 2024 North Ayrshire Council Annual Audit Plan 2023/24
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North Ayrshire Council Annual Audit Plan 2023/24 | 2 Contents Introduction 3 Annual Accounts audit planning 5 Wider Scope and Best Value Audit 13 Reporting arrangements, timetable, and audit fee 15 Other matters 18
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Introduction | 3 Introduction Audit Appointment 1. Fiona Mitchell-Knight, Audit Scotland, has been appointed by the Accounts Commission as external auditor of North Ayrshire Council for the period from 2022/23 until 2026/27. The 2023/24 financial year is therefore the second year of the five-year audit appointment. Summary of planned audit work 2. This document summarises the work plan for our 2023/24 external audit of North Ayrshire Council (the council). The main elements of our work include: • evaluation of the design and implementation of the key controls within the main accounting systems • an audit of the annual accounts, and provision of an independent auditor’s report • an audit opinion on other statutory information published within the annual accounts including the management commentary, the governance statement, and the remuneration report • consideration of arrangements in relation to wider scope areas: financial management; financial sustainability; vision, leadership, and governance; and use of resources to improve outcomes • consideration of Best Value arrangements • providing assurance on the Housing Benefit Subsidy Claim, Non- Domestic Rates Return and the Whole of Government Accounts (WGA) return • review the council’s arrangements for preparing and publishing statutory performance information. Respective responsibilities of the auditor and the council 3. The Code of Audit Practice 2021 sets out in detail the respective responsibilities of the auditor and the council. Key responsibilities are summarised below. Auditor responsibilities 4. Our responsibilities as independent auditors are established by the Local Government (Scotland) Act 1973 and the Code of Audit Practice (including supplementary guidance) and guided by the Financial Reporting Council’s Ethical Standard.
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Introduction | 4 5. Auditors in the public sector give an independent opinion on the financial statements and other information within the annual accounts. We also review and report on the arrangements within the council to manage its performance and use of resources. In doing this, we aim to support improvement and accountability. The council’s responsibilities 6. The council is responsible for maintaining accounting records and preparing annual accounts that give a true and fair view. They are also required to produce other reports in the annual accounts in accordance with statutory requirements. 7. The council has the primary responsibility for ensuring the proper financial stewardship of public funds, compliance with relevant legislation and establishing effective arrangements for governance, propriety and regularity that enables it to successfully deliver its objectives. Communication of fraud or suspected fraud 8. In line with ISA (UK) 240 (The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements), in presenting this plan to the Audit and Scrutiny Committee we seek confirmation from those charged with governance of any instances of actual, suspected, or alleged fraud that should be brought to our attention. During our audit, should members of the council have any such knowledge or concerns relating to the risk of fraud within it, we invite them to communicate this to us for our consideration. Adding value 9. We aim to add value to the council through our external audit work by being constructive and forward looking, by identifying areas for improvement and by recommending and encouraging good practice. In so doing, we will help the council promote improved standards of governance, better management and decision making and more effective use of resources. Additionally, we attend meetings of the Audit and Scrutiny Committee and actively participate in discussions.
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Annual Accounts audit planning | 5 Annual Accounts audit planning Introduction 10. The annual accounts are an essential part of demonstrating the council’s stewardship of resources and its performance in the use of those resources. 11. As appointed auditors we are required to perform an audit of the financial statements, consider other information within the Annual Accounts, and express a number of audit opinions in an Independent Auditor's Report in accordance with International Standards on Auditing (ISAs) in the UK, Practice Note 10 from the Public Audit Forum which interprets the ISAs for the public sector, and guidance from Audit Scotland. 12. We focus our work on the areas of highest risk. As part of our planning process we prepare a risk assessment highlighting the audit risks relating to each of the main financial systems relevant to the production of the financial statements in the annual accounts. Materiality 13. Materiality is an expression of the relative significance of a matter in the context of the annual accounts. The concept of materiality is applied by auditors in planning and performing the audit, and in evaluating the effect of any uncorrected misstatements on the financial statements. We are required to plan our audit to determine with reasonable confidence whether the annual accounts are free from material misstatement. The assessment of what is material is a matter of professional judgement over both the amount and the nature of the misstatement. Materiality levels for the 2023/24 audit of the council and its group 14. The materiality levels for the council and its group are set out in Exhibit 1. Exhibit 1 2023/24 materiality levels for the council and its group Materiality Council Group Planning materiality: This is the figure we calculate to assess the overall impact of audit adjustments on the financial statements. Materiality has been set based on our assessment of the needs of the users of the financial statements and the nature of the council’s £16.2 million £19.8 million
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Annual Accounts audit planning | 6 operations. It has been set at 2% of gross expenditure based on the audited annual accounts for 2022/23. Performance materiality: This acts as a trigger point. If the aggregate of errors identified during the annual accounts audit exceeds performance materiality, this would indicate that further audit procedures should be considered. Using our professional judgement, we have assessed performance materiality at 70% of planning materiality. £11.3 million £13.9 million Reporting threshold: We are required to report to those charged with governance on all unadjusted misstatements more than the ‘reporting threshold' amount. We assessed the reporting threshold at 5% of planning materiality, “capped” at £0.5 million using our professional judgement. £0.5 million £0.5 million Source: Audit Scotland Significant risks of material misstatement to the annual accounts 15. Our risk assessment draws on our knowledge of the council, its major transaction streams, key systems of internal control and risk management processes. It is informed by our discussions with management and internal audit, attendance at committees and a review of supporting information. 16. Audit risk assessment is an iterative and dynamic process. Our assessment of risks set out in this plan may change as more information and evidence becomes available during the progress of the audit. Where such changes occur, we will advise management and where relevant, report them to those charged with governance. 17. Based on our risk assessment process, we identified the following significant risks of material misstatement to the annual accounts. These risks have the greatest impact on our planned audit procedures. Exhibit 2 summarises the nature of the risks, the sources of assurance from management arrangements and the further audit procedures we plan to perform to gain assurance over the risk.
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Annual Accounts audit planning | 7 Exhibit 2 2022/23 significant risks of material misstatement to the annual accounts Significant risk of material misstatement Sources of management assurance Planned audit response 1. Risk of material misstatement due to fraud caused by management override of controls As stated in ISA (UK) 240 (The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements), management is in a unique position to perpetrate fraud because of their ability to override controls that otherwise appear to be operating effectively. • Owing to the nature of this risk, assurances from management are not applicable in this instance. • Assess the adequacy of controls in place for identifying and disclosing related party relationships and transactions in the financial statements. • Assess the design and implementation of controls over journal entry processing. • Make inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries and other adjustments. • Test journals at the year-end and post- closing entries and focus on significant risk areas. • Evaluate significant transactions outside the normal course of business. • We will assess any changes to the methods and underlying assumptions used to prepare accounting estimates compared to the prior year. • Substantive testing of income and expenditure transactions around the year-end to confirm they are accounted for in the correct financial year. • Focussed testing of accounting accruals and prepayments. 2. Significant estimation and judgment: other land and buildings, council dwellings and schools PPP valuations The council held other land and buildings, including its council dwellings and schools PPP estate, with a • Revaluations completed by Royal Institute of Chartered Surveyors (RICS) qualified surveyors. • Revaluations carried out for all • Review the information provided to the valuer to assess for completeness. • Evaluate the competence, capabilities, and objectivity of the professional valuer. • Obtain an understanding of management’s involvement in the
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Annual Accounts audit planning | 8 Significant risk of material misstatement Sources of management assurance Planned audit response net book value of £1,042 million as at 31 March 2023. There is a significant degree of subjectivity in the valuation of land and buildings. Valuations are based on specialist and management assumptions and changes in these can result in material changes to valuations. The assets are revalued on a five-year rolling basis. Values may also change year on year, and it is important that the council ensures the financial statements accurately reflect the value of the assets. Risk: Valuations of these assets are materially misstated. assets as part of rolling revaluation programme. • Detailed working papers retained to support asset reviews and impairments. • An annual impairment review is undertaken by the registered valuer and reviewed by management. • Documentation of the s95 officer’s consideration of the processes in place to confirm that the year-end valuations are free form material misstatement. valuation process to assess if appropriate oversight has occurred. • Test the reconciliation between the financial ledger and the asset register. • Evaluate management’s assessment of why it considers that the land and buildings not revalued in 2023/24 are not materially misstated. We will critically assess the appropriateness of any assumptions. • Critically assess the adequacy of the council’s disclosures regarding the assumptions in relation to the valuation of other land and buildings and council dwellings. Source: Audit Scotland Other area of audit focus 18. As part of our assessment of audit risks, we have identified two other areas where we consider there is also a risk of material misstatement to the financial statements. Based on our assessment of the likelihood and magnitude of the risks, we do not consider these to represent significant risks. We will keep these areas under review as our audit progresses. 19. Other areas of specific audit focus are: • Pension balance: This is an area of audit focus due to the material value and significant assumptions used in the calculation of the asset or liability balance. We will utilise the work of PwC as auditor expert in assessing the reasonableness of the methodologies used and assumptions made by the
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Annual Accounts audit planning | 9 Council’s actuary, Hymans Robertson LLP, in arriving at the IAS 19 pension valuation as at 31 March 2024. • Group consolidation adjustments: This is an area of audit focus due to issues identified in our testing of group consolidation adjustments in the 2022/23 accounts. We will carry out focussed substantive testing of group transactions and consolidation adjustments, including assessing the completeness of adjustments for intra-group balances. Consideration of the risks of fraud in the recognition of revenue and expenditure 20. As set out in ISA (UK) 240 (The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements), there is a presumed risk of fraud over the recognition of revenue. There is a risk that revenue income may be misstated resulting in a material misstatement in the financial statements. We have rebutted this presumed risk in 2023/24 as, while the possibility of fraud exists, we do not judge it to be a significant risk due to the nature of the majority of the council’s income streams, namely government funding and grants. 21. In line with Practice Note 10 (Audit of financial statements and regularity of public sector bodies in the United Kingdom), as most public-sector bodies are net spending bodies, the risk of material misstatement due to fraud related to expenditure recognition may in some cases be greater than the risk relating to revenue recognition. We have considered each of the council’s expenditure streams, and based on our knowledge of the council, prior year considerations and our risk assessment to date, we do not consider these to be susceptible to material misstatement due to fraud. We also consider there to be limited incentive and opportunity for the manipulation of expenditure recognition in the financial statements. We have therefore rebutted the risk of material misstatement due to fraud in expenditure recognition for 2023/24. 22. We have not, therefore, incorporated specific work into our audit plan in these areas over and above our standard audit procedures. Audit of the management commentary, annual governance statement and remuneration report 23. In addition to the appointed auditor’s opinion of the financial statements, the Accounts Commission prescribes that the appointed auditor should provide opinions as to whether the management commentary, annual governance statement, and the audited part of the remuneration report, have been compiled in accordance with the appropriate regulations and frameworks and are consistent with the financial statements. 24. To inform these opinions we will consider whether the disclosures within each statement comply with the requirements of the applicable guidance, and confirm that relevant information reflects the contents of the financial statements and other supporting documentation, including: • Management commentary: Consideration of performance information reported to council committees and published during the year.
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Annual Accounts audit planning | 10 • Annual governance statement: Reviewing the Local Code of Corporate Governance, considering the annual assurance statements completed, and prepared by Senior Officers to provide assurances to the Chief Executive, and Internal Audit’s annual assurance statement. • Remuneration report: Obtaining and reviewing payroll data and HR reports. 25. Based on our knowledge of the audit, and the established procedures in place to produce these statements, we have not identified any specific risks to be communicated to those charged with governance in relation to the audit of the management commentary, annual governance statement, and audited part of the remuneration report. Group Consideration 26. As group auditors, we are required under ISA (UK) 600 (Audits of group financial statements (including the work of component auditors)) to obtain sufficient appropriate audit evidence on which to base our audit opinion on the group accounts. 27. The council has a group which comprises component entities including subsidiaries, associates, and joint ventures. The audits of the financial information of some of the components are performed by other auditors. We plan to place reliance on the work of the component auditors. We will obtain sufficient appropriate audit evidence in relation to the consolidation process and the financial information of the components on which to base our group audit opinion. 28. At this stage, it has been assessed that there are no other significant group components, other than the council and Integration Joint Board (IJB). All non- significant group components will be covered by an analytical review at the group level. 29. We will obtain sufficient appropriate audit evidence in relation to the consolidation process and the financial information of the components on which to base our group audit opinion. Audit of the trusts registered as Scottish charities 30. The 2006 Regulations require charities to prepare annual accounts and require an accompanying auditor’s report where any legislation requires an audit. The Local Government (Scotland) Act 1973 specifies the audit requirements for any trust fund where some or all members of a council are the sole trustees. Therefore, a full and separate audit and independent auditor’s report is required for each registered charity where members of the council are sole trustees, irrespective of the size of the charity. 31. North Ayrshire Council administers eight such registered charities, disclosed in a single set of annual accounts, with total assets of some £0.662 million. This is in accordance with the connected charities rules. The preparation and audit of annual accounts of registered charities is regulated by the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006.
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Annual Accounts audit planning | 11 32. Other than a risk of management override of controls which has also been identified as risks in respect of the council’s annual accounts, no specific planning risks were identified in respect of the charity’s annual accounts. Materiality levels for the 2022/23 audit of trusts registered as Scottish charities 33. Materiality levels for the various trusts are set out in exhibit 3. Exhibit 3 2022/23 materiality levels for trusts registered as Scottish charities Charitable trust Planning Materiality Performance Materiality Reporting Threshold Anderson Park Trust (SC042136) £1 (Based on 2% of audited 2022/23 net asset value; £1 minimum) £1 (Based on 75% of planning materiality; £1 minimum) £1 (Based on 5% of overall materiality; £1 minimum) Douglas Sellers Trust (SC042101) £6 (Based on 2% of audited 2022/23 net asset value) £5 (Based on 75% of planning materiality) £1 (Based on 5% of overall materiality; £1 minimum) Margaret Archibald Bequest (SC042117) £5,622 (Based on 2% of audited 2022/23 net asset value) £4,216 (Based on 75% of planning materiality) £281 (Based on 5% of overall materiality) North Ayrshire Council Charitable Trust (SC025083) £6,697 (Based on 2% of audited 2022/23 net asset value) £5,023 (Based on 75% of planning materiality) £335 (Based on 5% of overall materiality) North Ayrshire Council (Dalry) Charitable Trust (SC043644) £38 (Based on 2% of audited 2022/23 net asset value) £29 (Based on 75% of planning materiality) £2 (Based on 5% of overall materiality) North Ayrshire Council (Kilbirnie & Glengarnock) Charitable Trust (SC043600) £60 (Based on 2% of audited 2022/23 net asset value) £45 (Based on 75% of planning materiality) £3 (Based on 5% of overall materiality)
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Annual Accounts audit planning | 12 North Ayrshire Council (Kilwinning) Charitable Trust (SC043374) £752 (Based on 2% of audited 2022/23 net asset value) £564 (Based on 75% of planning materiality) £38 (Based on 5% of overall materiality) North Ayrshire Council (Largs) Charitable Trust (SC043494) £67 (Based on 2% of audited 2022/23 net asset value) £50 (Based on 75% of planning materiality) £3 (Based on 5% of overall materiality) Source: Audit Scotland
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Wider Scope and Best Value Audit | 13 Wider Scope and Best Value Audit Introduction 34. The Code of Audit Practice sets out the four areas that frame the wider scope of public sector audit. The Code of Audit Practice requires auditors to consider the adequacy of the arrangements in place for the wider scope areas in audited bodies. 35. In summary, the four wider scope areas cover the following: • Financial management: means having sound budgetary processes. We will consider the arrangements to secure sound financial management including the strength of the financial management culture, accountability, and arrangements to prevent and detect fraud, error, and other irregularities. This will include reviewing the council’s progress with investigating the matches identified by the National Fraud Initiative exercise. • Financial sustainability: as auditors, we consider the appropriateness of the use of the going concern basis of accounting as part of the annual audit. We will also comment on financial sustainability in the longer term. We define this as medium-term (two to five years) and longer-term (longer than five years). • Vision, leadership, and governance: we conclude on the arrangements in place to deliver the vision, strategy and priorities adopted by the council. We also consider the effectiveness of the governance arrangements to support delivery. • Use of resources to improve outcomes: we will consider how the council demonstrates economy, efficiency, and effectiveness through the use of financial and other resources. Significant wider scope risks 36. Our planned work on the wider scope areas is risk based and proportionate. Our risk assessment has not identified any significant risks in respect of the above wider scope areas. Financial sustainability 37. Whilst not a significant audit risk, the challenging financial environment in which the council, along with other public sector bodies, is operating in, financial sustainability has been identified as an area of audit focus. There are challenges to the medium and longer-term financial sustainability due to the uncertainty over future Scottish Government funding allocations, the rising cost of inflation and the cost of implementing future pay settlements. Our annual audit report will include
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Wider Scope and Best Value Audit | 14 comment on the council’s 2023/24 financial outturn, 2024/25 budget, medium- term financial plan and monitoring and reporting of financial resilience indicators. Best Value 38. Under the 2021 Code of Audit Practice, the audit of Best Value in councils is fully integrated within our annual audit work. Auditors are required to evaluate and report on the performance of councils in meeting their Best Value duties. 39. The arrangements to secure Best Value at North Ayrshire Council will be assessed over the period of the audit appointment and will include an annual evaluation of risks and improvement areas and public performance reporting. We will also follow up findings reported previously on Best Value, including last year’s work on leadership, to assess the pace and depth of improvement. This work will be integrated with the wider scope audit areas discussed above. 40. As part of our annual work on Best Value, we conduct thematic reviews as directed by the Accounts Commission. In 2023/24, the thematic review across the sector will be on workforce innovation and will consider how councils are responding to the current workforce challenge through building capacity, increasing productivity, and innovation. Our conclusions and judgements will be reported in a separate report to management and summarised in our Annual Audit Report. 41. At least once every five years, the Controller of Audit will report to the Accounts Commission on the council’s performance in meeting its Best Value duties. The second year of the programme is from October 2023 to August 2024. North Ayrshire Council is not included in the second year of the programme.
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Reporting arrangements, timetable, and audit fee | 15 Reporting arrangements, timetable, and audit fee Reporting arrangements 42. Audit reporting is the visible output for the annual audit. All annual audit plans and the outputs, as detailed in exhibit 4, and any other outputs on matters of public interest will be published on our website: www.audit-scotland.gov.uk. 43. Matters arising from our audit will be reported on a timely basis and will include agreed action plans. Draft reports will be issued to the relevant officers to confirm factual accuracy. 44. We will provide an independent auditor’s report to North Ayrshire Council (the council) and the Accounts Commission setting out our opinions on the annual accounts. We will provide the council and Accounts Commission with an annual report on the audit containing observations and recommendations on significant matters which have arisen during the audit. 45. Exhibit 5 outlines the target dates for our audit outputs. Exhibit 5 2023/24 Audit outputs Audit Output Latest date Annual Audit Plan 31 March 2023 Best Value Thematic Report 30 September 2023 Independent Auditor's Report 30 September 2023 Annual Audit Report 30 September 2023 Source: Audit Scotland Timetable 46. To support an efficient audit, it is critical that the timetable for producing the annual accounts for audit is achieved. We have included a proposed timetable for the audit at Exhibit 6 that has been discussed and agreed with management.
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Reporting arrangements, timetable, and audit fee | 16 47. We recognise that it is in the best interests of public accountability to get the reporting of audited annual accounts back to pre-pandemic timelines. We are identifying ways to work more efficiently to expedite the 2023/24 audits whilst at the same time maintaining high standards of quality. In 2023/24 we may not meet the target of concluding the audit and signing the accounts by 30 September, but we hope to be as close to this as possible. We are currently planning for an October completion. 48. We intend to take a hybrid approach to the 2023/24 audit with a blend of onsite and remote working. We will continue to work closely with management to identify the most efficient approach and will keep timeframes for the completion of the audit under review. Progress will be discussed with management over the course of the audit. Exhibit 6 Proposed annual accounts timetable Key stage Provisional Date Consideration of the unaudited annual accounts by those charged with governance (Audit and Scrutiny Committee) 30 June 2023 Latest submission date for the receipt of the unaudited accounts with complete working papers package. 30 June 2023 Latest date for final clearance meeting with the Head of Service (Finance), agreement of the audited and unsigned annual accounts and the proposed annual audit report. To be confirmed Issue of proposed annual audit report, letter of management representation and proposed independent auditor’s report to those charged with governance. To be confirmed Presentation of proposed annual audit report to those charged with governance. Approval of the North Ayrshire Council annual accounts by those charged with governance, independent auditor’s report signed electronically following this approval and the final annual audit report issued. To be confirmed Certified Non-Domestic Rates Return, Housing Benefit subsidy claim and WGA assurance. To be confirmed Source: Audit Scotland
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Reporting arrangements, timetable, and audit fee | 17 Audit fee 49. In setting the fee for 2023/24 we have assumed that the council has effective governance arrangements and will prepare comprehensive and accurate annual accounts for audit in line with the agreed timetable for the audit. The audit fee assumes there will be no major change in respect of the scope of the audit during the year and where our audit cannot proceed as planned, a supplementary fee may be levied. The audit fee for 2023/24 is £377,760 (£356,390 in 2022/23). There is a separate audit fee of £1,100 for the audit of the registered charities administered by the council (£1,100 in 2022/23).
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Other matters | 18 Other matters Internal audit 50. It is the responsibility of the council to establish adequate internal audit arrangements. The council’s internal audit function is provided by its internal audit section led by the Senior Manager (Audit, Fraud, Safety & Risk). 51. While we are not planning to place formal reliance on the work of internal audit in 2023/24, we will review internal audit reports and assess the impact of the findings on our annual accounts and wider scope audit responsibilities. Independence and objectivity 52. Auditors appointed by the Accounts Commission must comply with the Code of Audit Practice and relevant supporting guidance. When auditing the annual accounts, auditors must also comply with professional standards issued by the Financial Reporting Council and those of the professional accountancy bodies. These standards impose stringent rules to ensure the independence and objectivity of auditors. 53. Audit Scotland has robust arrangements in place to ensure compliance with these standards including an annual ‘fit and proper’ declaration for all members of staff. The arrangements are overseen by the Executive Director of Innovation and Quality, who serves as Audit Scotland’s Ethics Partner. 54. The appointed auditor for North Ayrshire Council is Fiona Mitchell-Knight, Audit Director. David Jamieson, Senior Audit Manager is the appointed auditor of the registered charities administered by the council. Auditing and ethical standards require the appointed auditor to communicate any relationships that may affect the independence and objectivity of audit staff. We are not aware of any such relationships pertaining to the audit of the council or charitable trusts. Audit Quality 55. Quality is at the core of public audit in Scotland and is the foundation for building consistency and confidence across all audit work. High quality audits provide assurance, add value, and can support public bodies to achieve their objectives. 56. Audit Scotland are committed to delivering high quality audits. The foundation of our quality framework is our Audit Guide, which incorporates the application of professional auditing, quality and ethical standards and the Code of Audit Practice (and supplementary guidance) issued by Audit Scotland and approved by the Auditor General for Scotland. To ensure that we achieve the required quality standards, Audit Scotland conducts peer reviews and internal quality reviews. Additionally, the Institute of Chartered Accountants of England
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Other matters | 19 and Wales (ICAEW) have been commissioned to carry out external quality reviews. 57. As part of our commitment to quality and continuous improvement, Audit Scotland will periodically seek your views on the quality of our service provision. We welcome feedback at any time, and this may be directed to the engagement lead.
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Other matters | 20 North Ayrshire Council Annual Audit Plan 2023/24 Audit Scotland’s published material is available for download on the website in a number of formats. For information on our accessibility principles, please visit: www.audit-scotland.gov.uk/accessibility For the latest news follow us on social media or subscribe to our email alerts. Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit-scotland.gov.uk www.audit-scotland.gov.uk AS.4.0