The External Auditor presented the Audit Results Report for the year ended 31 March 2018. The report summarised EY's conclusions in relation to the audit of Middlesbrough Council for 2017/2018.
Based on EYs materiality measure of gross expenditure on provision of services, the overall materiality assessment had been updated from £6.7 million in the planning report to £9 million.
The audit of the Councils financial statements for the year ended 31 March 2018 was substantially completed with only completion of payroll testing outstanding. Subject to satisfactory completion of that item, EY expected to issue an unqualified opinion on the Councils financial statements.
There were no unadjusted audit differences arising from audit, however, it was noted that £635K relating to the Housing Benefit claim had been identified. There was no need to amend this since it fell well below the £9 million materiality figure.
In relation to the key areas of focus and significant risks for the audit of the Councils financial statements, there were no matters that the External Auditor wished to bring to the attention of the Committee. One recommendation had been made in relation to an amendment to the Asset Disposal Policy for clarification.
In the Audit Planning Report one significant risk was identified in relation to property disposal governance arrangements. Based on the work performed in relation to this risk, the External Auditor had no matters to report.
However, the External Auditor was currently considering information made available in June 2018 in relation to other governance arrangements at the Council which might impact on the risk assessment and work programme relating to value for money. As a result, the External Auditor was unable to fully conclude the value for money procedures at this time. A further update would be brought to the Corporate Affairs and Audit Committee as soon as possible. The External Auditor was unable to specify a date for completion of this work but confirmed that additional fees would be incurred.
The External Auditor was satisfied that the Annual Governance Statement complied with guidance and was consistent with other information from the audit of the financial statements. Some updates to the wording had been suggested by the Auditor and actioned by management. Procedures set out by the National Audit Office (NAO) on the Whole of Government Accounts submission were currently being performed.
Finally, a copy of the Management Representation Letter was included in the submitted report for information.
AGREED that the information provided was received and noted.