Agenda item

The Committee received the Audit Strategy Memorandum of the External Auditor relating to the Durham County Council (for copy see file of minutes).

C Waddell, Mazars explained that the completion of the external audit had been later than had been expected but that this was no reflection on the DCC team. He noted that the plan of works had now been completed for the pension fund for 2022/2023 with no fundamental change and was the same as last year with management override risk level 3 on investments highlighted in the report.  Mr Waddell noted that in terms of scope of the audit, nothing had changed except that Thomas Blackhouse had now taken over as Audit Manager and would complete the external audit.

P Darby commented that the External Auditors report and the final accounts for the pension fund had been presented to and considered by the Pension Committee.

Councillor B Kellett referred to page 31 of the report and queried the significant risks and judgements associated with revenue recognition within the Audit report.

C Waddell replied that the significant risk on the revenue recognition was a challenge to Auditors due to the substantial judgement and estimation that underpinned this and the risk that revenue was improperly or incorrectly recognised due to error or fraud.  He clarified that the risk was there to recognise that there was a possibility that some organisations could try to make the income look better on the profit and loss and balance sheet.  He confirmed that Durham County Council had robust audit and internal control arrangements in place and he had no concerns in this regard.  He gave an example of council tax as a revenue recognition that could be a risk where there could be material fraud within the council tax accounts where money could be taken or placed in the wrong account. He noted that extra testing had been put in place to ensure everything was in the right year.

Resolved:

That the report be noted.