Agenda item

(Report of the Head of Finance & Procurement and Presentation by the External Auditors)

As there was no provision in legislation for Public Sector Audit Appointments (PSAA) to make arrangements for Housing Benefit Subsidy Certification work on behalf of the Department of Work and Pensions from 2018/19 onwards, Grant Thornton had been asked to present their proposal to undertake this work for Lichfield District Council via a Presentation to the Audit and Member Standards Committee. 

The Committee were advised that Local Authorities are required to notify the Department of Work and Pensions for the 2018/19 year by 2 July 2018 who they had appointed as External Auditors for the Certification of Housing Benefit Subsidy Grant Claims and it is recommended that the Audit and Member Standards Committee either:-

·         Appoint Grant Thornton as its External Auditor for the Certification of Housing Benefit Subsidy Grant claims for a five year period from 2018/19 to match the PSAA appointment for the main accounts or;

·         Appoint Grant Thornton as its External Auditor for the Certification of Housing Benefit Subsidy Grant Claims for 2018/19 only or;

·         Elects to procure an alternative External Auditor for the Certification of Housing Benefit Subsidy Grant Claims for 2018/19 onwards.

Mr John Gregory and Miss Laurelin Griffiths from Grant Thornton explained that in the past they had made a loss in providing this work to Lichfield District Council and yes, it was a significant increase in fees to deliver this work, but they felt it was a fair price considering the loss made previously and the amount of work which has to be undertaken.  They presented the overall procedures and explained the work required i.e.  the drafting and agreement of the qualification letter as well as the discovery samples required – 20 per benefit type and one sample of 40 for each type of error.  The proposed fee and assumptions were highlighted and they reassured the committee that if less work is needed in any particular year, they would reduce the fee accordingly.  It was explained that there would be synergy around the work done on the housing benefit claims for the main audit also. 

The work at Lichfield District Council was highlighted and there was also a comparison chart with other Staffordshire District Councils in the Presentation showing Lichfield at the lower end of the scale.

The benefits of staying with Grant Thornton were highlighted as Officers and Members know them, it avoids potential confusion of having two separate sets of Auditors for different purposes, there would be synergy around the work done on the  housing benefits claims for the main audit, they have a high level of knowledge of both Lichfield District Council and of housing benefits and the requirements of the grant regime and they have a very strong quality assurance and consistency arrangements in place with a process of hot reviews and grade specific training.

Mr Gregory also stated that to his knowledge there were a limited number of firms that could undertake this work.

Members felt that Grant Thornton had always done a comprehensive job and agreed that having two audit relationships to manage could be problematic.  They agreed that the costs of going through a competitive exercise could be more than the increased fee as well as the costs could be higher from another firm in any case.

RESOLVED:  It is recommended that the Audit and Member Standards Committee appoints Grant Thornton as its External Auditor for the Certification of Housing Benefit Subsidy Grant Claims for a five year period from 2018/19 to match the Public Sector Audit Appointments (PSAA) appointment for the main accounts.