Annual Audit Letter 2018-19 - Royal Borough of Kensington ... · Our Annual Audit Letter (Letter) summarises the key findings arising from the work that we have carried out at the

The Annual Audit Letter

for Royal Borough of Kensington

and Chelsea

Year ended 31 March 2019

September 2019

© 2019 Grant Thornton UK LLP | Annual Audit Letter for the Royal Borough of Kensington and Chelsea | September 2019 2

Contents

Section Page

1. Executive Summary 3

2. Audit of the Financial Statements 5

3. Value for Money conclusion 11

Appendices

A Reports issued and fees

Your key Grant Thornton

team members are:

Paul Grady

Key Audit Partner

T: 020 7728 2439

E: [email protected]

Ellen Millington

Manager

T: 020 7728 3379


Kit Bissell

Executive

T: 020 7728 2992



Executive Summary

Purpose

Our Annual Audit Letter (Letter) summarises the key findings arising from the

work that we have carried out at the Royal Borough of Kensington and

Chelsea (the Council) for the year ended 31 March 2019.

This Letter is intended to provide a commentary on the results of our work to

the Council and external stakeholders, and to highlight issues that we wish to

draw to the attention of the public. In preparing this Letter, we have followed

the National Audit Office (NAO)'s Code of Audit Practice and Auditor

Guidance Note (AGN) 07 – 'Auditor Reporting'. We reported the detailed

findings from our audit work to the Council's Audit and Transparency

Committee as those charged with governance in our Audit Findings Report

on 12 September 2019.

Respective responsibilities

We have carried out our audit in accordance with the NAO's Code of Audit Practice,

which reflects the requirements of the Local Audit and Accountability Act 2014 (the

Act). Our key responsibilities are to:

• give an opinion on the Council’s financial statements (section two)

• assess the Council's arrangements for securing economy, efficiency and

effectiveness in its use of resources (the value for money conclusion) (section

three).

In our audit of the Council’s financial statements, we comply with International

Standards on Auditing (UK) (ISAs) and other guidance issued by the NAO.

Materiality We determined materiality for the audit of the Council's financial statements to be £13,522,000, which is 2% of the Councils gross revenue

expenditure.

Financial Statements opinion We gave an unqualified opinion on the Council's financial statements on 23 September 2019.

Whole of Government Accounts

(WGA)

We completed work on the Council’s consolidation return following guidance issued by the NAO.

Use of statutory powers We did not identify any matters which required us to exercise our additional statutory powers.

Value for Money arrangements We are unable to conclude on the Council’s arrangements for securing economy, efficiency and effectiveness in its use of resources. This is

because the Council’s predecessor auditors have not yet issued their value for money conclusions in respect of the 2016/17 and 2017/18

audits as a result of ongoing investigations and inquiries into the Grenfell Tower fire.

Certification of Grants We also carry out work to certify the Council's Housing Benefit subsidy claim on behalf of the Department for Work and Pensions, the

Teachers’ Pensions End of Year Certificate, Pooling Housing Capital Receipts and Greater London Authority Housing Grant compl iance. Our

work on these claims is not yet complete and is subject to later deadlines. We will report the results of this work to the Audit and Transparency

Committee separately.

Certificate We are unable to certify that we have completed the audit of the financial statements of the Royal Borough of Kensington and Chelsea until:

• we are able to issue our conclusion on the Council’s arrangements for securing economy, efficiency and effectiveness in its use of

resources, which cannot be issued until the Council’s predecessor auditors issue their value for money conclusions in respect of the

2016/17 and 2017/18 audits; and

• your predecessor auditors have issued their completion certificates for the 2016/17 and 2017/18 audit years.

Our work


Executive SummaryWorking with the Council

During the year we have delivered a number of successful outcomes with you:

• Improved financial processes – we worked with you to streamline your processes including raising control recommendations for improvements within our Audit

Findings Report.

• Understanding your operational health – through the value for money conclusion we provided you with assurance on your operational effectiveness.

• Sharing our insight – we provided regular audit committee updates covering best practice. We also shared our thought leadership reports

• Providing training – we provided your teams with training on financial statements and annual reporting

• Support outside of the audit – you subscribe to our CFO Insights platform, and we have regularly held meetings to discuss emerging financial and operational issues

which you are facing as an organisation.

We would like to record our appreciation for the assistance and co-operation

provided to us during our audit by the Council’s management and staff.

Grant Thornton UK LLP

September 2019


Audit of the Financial Statements

Our audit approach

Materiality

In our audit of the Council's financial statements, we use the concept of

materiality to determine the nature, timing and extent of our work, and in

evaluating the results of our work. We define materiality as the size of the

misstatement in the financial statements that would lead a reasonably

knowledgeable person to change or influence their economic decisions.

We determined materiality for the audit of the Council’s financial statements

to be £13,255,000, which is 2% of the Council’s gross revenue expenditure.

We used this benchmark as, in our view, users of the Council's financial

statements are most interested in where the Council has spent its revenue in

the year.

We set a lower threshold of £676,000, above which we reported errors to the

Audit and Transparency Committee in our Audit Findings Report.

The scope of our audit

Our audit involves obtaining sufficient evidence about the amounts and disclosures in

the financial statements to give reasonable assurance that they are free from material

misstatement, whether caused by fraud or error. This includes assessing whether:

• the accounting policies are appropriate, have been consistently applied and

adequately disclosed;

• the significant accounting estimates made by management are reasonable; and

• the overall presentation of the financial statements gives a true and fair view.

We also read the remainder of the financial statements, and the narrative report and

annual governance statement published alongside the financial statements, to check it

is consistent with our understanding of the Council and with the financial statements

included in the Annual Report on which we gave our opinion.

We carry out our audit in accordance with ISAs (UK) and the NAO Code of Audit

Practice. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.

Our audit approach was based on a thorough understanding of the Council's business

and is risk based.

We identified key risks and set out overleaf the work we performed in response to

these risks and the results of this work.


Audit of the Financial StatementsSignificant Audit RisksThese are the significant risks which had the greatest impact on our overall strategy and where we focused more of our work.

Risks identified in our audit plan How we responded to the risk Findings and conclusions

Management override of internal controls

Under ISA (UK) 240 there is a non-rebuttable presumed risk that the

risk of management over-ride of controls is present in all entities.

The Council faces external scrutiny of its spending and this could

potentially place management under undue pressure in terms of

how they report performance.

We therefore identified management override of control, in particular

journals, management estimates and transactions outside the

normal course of business, as a significant risk of material

misstatement.

As part of our audit work we;

• evaluated the design effectiveness of management controls over

journals

• analysed the journals listing and determine the criteria for selecting high

risk unusual journals

• tested unusual journals recorded during the year and after the draft

accounts stage for appropriateness and corroboration

• gained an understanding of the accounting estimates and critical

judgements applied made by management and consider their

reasonableness with regard to corroborative evidence

• evaluated the rationale for any changes in accounting policies,

estimates or significant unusual transactions.

There were no significant findings

arising from our work in response

to this risk.

Valuation of land and buildings

The Council revalues its land and buildings on a rolling five-yearly

basis. This valuation represents a significant estimate by

management in the financial statements due to the size of the

numbers involved (£1.328 billion covering Council Dwellings and

Other Land and Buildings as at 31 March 2018) and the sensitivity of

this estimate to changes in key assumptions.

Additionally, the Council needs to ensure that the carrying value in

its financial statements is not materially different from the current

value or the fair value (for surplus assets) at the financial statements

date, for assets which have not been revalued in any given year.

We therefore identified valuation of land and buildings, particularly

revaluations and impairments, as a significant risk of material

misstatement

As part of our audit work we:

• evaluated management's processes and assumptions for the calculation

of the estimate, the instructions issued to valuation experts and the

scope of their work

• evaluated the competence, capabilities and objectivity of the valuation

expert

• written to the valuer to confirm the basis on which the valuation was

carried out

• challenged the information and assumptions used by the valuer to

assess completeness and consistency with our understanding

• tested revaluations made during the year to ensure that they have been

input correctly into the Council’s asset register

• confirmed that all relevant assets were revalued as at the balance sheet

date.



to this risk.


Audit of the Financial StatementsSignificant Audit Risks - continued


Valuation of net pension liability

The Council’s pension fund net liability, as reflected

in the balance sheet as the net defined benefit

liability, represents a significant estimate in the

financial statements.

The pension fund net liability is considered a

significant estimate due to the size of the numbers

involved and the sensitivity of the estimate to

changes in key assumptions.

We therefore identified valuation of the pension

fund net liability as a significant risk of material

misstatement.

As part of our audit work we completed;

• gained an understanding of the processes and controls put in place by

management to ensure that the pension fund net liability is not materially

misstated and evaluate the design of the associated controls;

• evaluated the instructions issued by management to their management

expert (an actuary) for this estimate and the scope of the actuary’s work;

• assessed the competence, capabilities and objectivity of the actuary who

carried out the pension fund valuation;

• assessed the accuracy and completeness of the information provided to the

actuary to estimate the liability;

• tested the consistency of the pension fund asset and liability and

disclosures in the notes to the core financial statements with the actuarial

report from the actuary;

• undertaken procedures to confirm the reasonableness of the actuarial

assumptions made by reviewing the report of the consulting actuary (as

auditor’s expert) and performing any additional procedures suggested

within the report; and

• obtained assurances from our audit of the Council’s Pension Fund as to the

controls surrounding the validity and accuracy of membership data;

contributions data and benefits data sent to the actuary by the pension fund

and the fund assets valuation in the pension fund financial statements.

Subsequent to the submission of the draft

financial statements to audit, management

obtained revised IAS 19 reports from their

actuary to take account of potential increased

liabilities arising from the McCloud transitional

protection ruling. This resulted in an estimated

total increase to the net pensions liability in the

balance sheet of £8,259k, with a corresponding

increase in past service costs recognised in the

Comprehensive Income and Expenditure

Statement. We reviewed the approach and

assumptions used by management’s actuary

and found these to be reasonable.

Management amended their financial

statements accordingly. The adjustment also

impacted on the Movement in Reserves

Statement, Cash Flow Statement, Expenditure

and Funding Analysis and a number of other

disclosure notes.

No further material issues were identified

through our audit work in respect of valuation of

the net pension liability.


Audit of the Financial StatementsSignificant Audit Risks - continued

Risks identified in our audit plan How we responded to the risk Findings and

conclusions

Incomplete or inaccurate financial information transferred to the new

general ledger

In December 2018, the Council implemented a new general ledger system

(SAP) hosted by Hampshire County Council. When implementing a new

significant accounting system, it is important to ensure that sufficient

controls have been designed and operate to ensure the integrity of the data.

There is also a risk over the completeness and accuracy of the data transfer

from the previous ledger system.

We therefore identified the completeness and accuracy of the transfer of

financial information to the new general ledger system as a significant risk

of material misstatement.

As part of our audit work we;

• completed an information technology (IT) environment review by our

IT audit specialists to document, evaluate and test the IT controls

operating within the new general ledger system;

• reviewed the Council’s arrangements and controls for transferring

data from the old financial system to the new financial system;

• mapped the closing balances from the legacy general ledger system

(Agresso) to the opening balance position in SAP to assess the

accuracy and completeness of the financial information; and

• tested the data transfer from the old system to the new, and from the

new system back to the old, to gain assurance over the

completeness and accuracy of data transferred.

There were no significant

findings arising from our

work in response to this

risk.

Accuracy and occurrence of operating expenditure relating to the

Grenfell fire recovery

In 2016/17 the Council disaggregated operating expenditure relating to the

response to the Grenfell fire in a separate line below the net cost of services

in your Comprehensive Income and Expenditure Statement. You also

provided further detail on the nature of this expenditure in a separate note to

the financial statements. This included the purchase of Council Dwellings

from your general fund, rather than the Housing Revenue Account, for

which you gained special dispensation from central government.

In 2018/19, a distinct directorate had been set up in relation to Grenfell and

this expenditure was recognised within the net cost of services.

Due to the sensitive nature of this expenditure and level of stakeholder

interest, as well as the potential for fraud to be perpetrated against you, we

therefore identified the accuracy and occurrence of operating expenditure

relating to the Grenfell fire recovery as a significant risk of material

misstatement.


• gained an understanding of the Council’s system for identifying and

accounting for operating expenditure relating to the Grenfell fire

recovery and evaluate the design of the associated controls;

• substantively sample tested operating expenditure relating to the

Grenfell fire recovery to supporting documentation to gain assurance

over the accuracy and occurrence of this expenditure; and

• corroborated expenditure disclosed as being related to the Grenfell fire

recovery to other sources of information and our wider understanding

of the Council’s circumstances.

There were no significant

findings arising from our

work in response to this

risk.


Audit of the Financial Statements

Pension Fund Significant Audit Risks These are the risks which had the greatest impact on our overall strategy and where we focused more of our work on the pension fund.


Valuation of level 3 investments

The Fund’s investments are revalued on an annual basis to ensure that

the carrying value is not materially different from the fair value at the

financial statements date.

By their nature Level 3 investment valuations lack observable inputs.

These valuations therefore represent a significant estimate by

management in the financial statements due to the size of the numbers

involved and the sensitivity of this estimate to changes in key

assumptions

Under ISA 315 significant risks often relate to significant non-routine

transactions and judgemental matters. Level 3 investments by their

very nature require a significant degree of judgement to reach an

appropriate valuation at year end.

Management utilise the services of investment managers and/or

custodians as valuation experts to estimate the fair value as at 31

March 2019.

We therefore identified valuation of Level 3 investments as a significant

risk.


• evaluated management's processes for valuing Level 3 investments

• reviewed the nature and basis of estimated values and consider what

assurance the Fund had over the year end valuations provided for

these types of investments; to ensure that the requirements of the

Code were met

• for a sample of investments, tested the valuation by obtaining and

reviewing the audited accounts, (where available) at the latest date

for individual investments and agreeing these to the fund manager

reports at that date. Reconciled those values to the values at 31

March 2019 with reference to known movements in the intervening

period and

• in the absence of available audited accounts, we evaluated the

competence, capabilities and objectivity of the valuation expert

• tested revaluations made during the year to see if they had been input

correctly into the Fund’s asset register.



to this risk.


Audit of the Financial StatementsAudit opinionWe gave an unqualified opinion on the Council's financial statements on 23

September 2019.

Preparation of the financial statements

The Council presented us with draft financial statements in accordance with the

national deadline, and provided a good set of working papers to support them.

The finance team responded promptly and efficiently to our queries during the

course of the audit. However

• In some instances, delays were experienced in obtaining the information

requested. This was particularly the case when the requested information

originated from a source outside of the corporate finance team. A control

recommendation around the effectiveness of processes in place with teams

outside of corporate finance was raised in our Audit Findings Report.

• In some instances, management explanations for the inputs into and

assumptions behind key accounting estimates were not sufficient and

alternative audit procedures were required to ensure that the associated

account balances were not materially misstated. A control recommendation

around adequacy of support for key accounting estimates was raised in our

Audit Findings Report.

Issues arising from the audit of the financial statements

We reported the key issues from our audit to the Council's Audit and

Transparency Committee on 12 September 2019.

Annual Governance Statement and Narrative Report

We are required to review the Council’s Annual Governance Statement and

Narrative Report. It published them on its website within the Statement of

Accounts in line with the national deadlines.

Both documents were prepared in line with the CIPFA Code and relevant

supporting guidance. We confirmed that both documents were consistent with

the financial statements prepared by the Council and with our knowledge of the

Council.

Pension fund accounts

We gave an unqualified opinion on the pension fund accounts of Kensington and

Chelsea Pension Fund on 23 September 2019. We also reported the key issues from

our audit of the pension fund accounts to the Council’s Audit and Transparency

Committee on 12 September 2019.

Whole of Government Accounts (WGA)

We carried out work on the Council’s Data Collection Tool in line with instructions

provided by the NAO . We issued an assurance statement which did not identify any

issues for the group auditor to consider, aside from those identified through the

financial statements audit, on 23 September 2019.

Certificate of closure of the audit

We are unable to certify that we have completed the audit of the financial statements

of the Royal Borough of Kensington and Chelsea until:

• we are able to issue our conclusion on the Council’s arrangements for securing

economy, efficiency and effectiveness in its use of resources, which cannot be

issued until the Council’s predecessor auditors issue their value for money

conclusions in respect of the 2016/17 and 2017/18 audits; and

• your predecessor auditors have issued their completion certificates for the 2016/17

and 2017/18 audit years.


Value for Money conclusion

BackgroundWe carried out our review in accordance with the NAO Code of Audit

Practice, following the guidance issued by the NAO in November 2017 which

specified the criterion for auditors to evaluate:

In all significant respects, the audited body takes properly informed decisions

and deploys resources to achieve planned and sustainable outcomes for

taxpayers and local people.

Key findingsOur first step in carrying out our work was to perform a risk assessment and

identify the risks where we concentrated our work.

The risks we identified and the work we performed are set out overleaf.

As part of our Audit Findings report agreed with the Council in September

2019, we agreed recommendations to address our findings.

Overall Value for Money conclusionWe are unable to issue our conclusion on the Council’s arrangements to secure

economy, efficiency and effectiveness in its use of resources until the Council’s

predecessor auditors have concluded their audits for 2016/17 and 2017/18.


Value for Money conclusionValue for Money Risks


Medium Term Financial Planning

In the context of tightening central government

funding over recent years and a reduction in

useable reserves as a result of the expenditure

required to respond to the Grenfell fire, in the

medium term the Council will be required to

make significant savings in areas where these

have not previously been necessary, in order to

maintain financial balance.

As part of our work we reviewed the

Council’s Medium Term Financial

Strategy and examine underlying

assumptions and dependencies for

robustness. We examined in detail the

savings plans aimed at reducing future

funding gaps.

Whilst in the medium-term the financial outlook is more challenging than it has been in

previous years and has potential for volatility in relation to macro-economic and

national political factors beyond the Council’s direct control, we are satisfied that

arrangements are in place to support medium term financial sustainability. We are

therefore satisfied that this risk has been sufficiently mitigated.

Grenfell Fire – Response to Recovery

During the course of 2018/19 the Council’s

work with the local community in respect of the

aftermath of the Grenfell fire shifted from

immediate response to a focus on sustained

recovery. In particular, emphasis was placed on

community engagement and focus groups, as

the public inquiry into the fire remained

ongoing. Whilst the vast majority of affected

families have been successfully rehoused, the

fire and its aftermath will have ongoing financial

and wider implications on your resources for

the foreseeable future.

As part of our work we evaluated the

Council’s ongoing strategies and

arrangements for leading the recovery

from the fire and their assessments of the

financial and wider impact.

Due to the continuing uncertainties around the public inquiry and criminal investigation

into the Grenfell fire, and as the Council’s predecessor auditors have not yet issued

their VFM conclusions for 2016/17 and 2017/18, we are not yet able to draw definitive

conclusions around the arrangements in place and their sufficiency to secure economy,

efficiency and effectiveness in the medium term.


Value for Money conclusionValue for Money Risks


Cultural Change and Transformation

Following the cultural impact of the Grenfell fire,

the ongoing evolution of the pre-existing Tri-

Borough arrangement and the wider

circumstances in which you are now operating

as an organisation, you acknowledge that

change and transformation within the Council

will be required to meet the future financial and

operational challenges which you face.

As part of our work we reviewed

the Council’s plans for

implementing cultural change and

arrangements for designing,

implementing and monitoring any

specific programmes for

embedding your strategic

objectives through transformation

and change.

The Council has carefully considered how to reinvigorate the organisation to modernise and

become forward looking. The timeframes are ambitious and, in respect of the cultural change

element, unlikely to be realised completely within a short period of time. Early thinking is

promising, but many of the detailed arrangements are yet to be established, and these are

essential for supporting an organisation-wide transformation programme. A reliance on

external consultants is, to an extent, unavoidable, but care will need to be taken to ensure the

Council “owns” the change and feels able to drive its direction and delivery. It will be essential

that change becomes embedded and is not reliant on the continued presence of consultants

as this dovetails into business as usual, and that anticipated future training is identified at an

early stage.

A strong vision for the future is essential, to enable a target operating model to be developed

within a narrative that engages ‘hearts and minds’ and provides a direction of travel for future

transformation programmes to drive efficiencies, new ways of working and cultural change. Of

significant risk is the capacity of senior leadership, which will need to be able to devote

sufficient, significant time to this agenda whilst at the same time continuing to respond to a

variety of uncoordinated matters which continue to arise as a result of the Grenfell Tower fire.

It is important to start setting out the future of the organisation, as this will be essential in

driving embedded change owned across the Council, whilst continuing to respond to the

existing challenges.

Clearly identified and articulated benefits, set out in well documented business cases, with

early articulation of the ‘story to be told’ are essential if the anticipated benefits are to be

realised and expenditure on transformation to be deployed efficiently and productively. A

thorough understanding of the critical path analysis and interdependencies will also be key to

minimise the impact of slippage and enable effective prioritisation of delivery. Transparent and

effective oversight at the appropriate level, which is neither stifling to on-the-ground

innovation, engagement and ownership, nor too remote to identify early problems, will be key.

We will continue to review progress as the Council develops its early stage arrangements.


A. Reports issued and feesWe confirm below our final reports issued and fees charged for the audit and provision of non-audit services.

Fees

Planned

£

Actual fees

£

2017/18 fees

£

Statutory audit 93,497 113,297 121,425

Audit of Pension Fund 16,170 16,170 21,000

Audit of subsidiary company Repairs

Direct Ltd

15,000 TBC 6,000

Total fees 124,667 TBC 148,425

Reports issued

Report Date issued

Audit Plan February 2019

Audit Findings Report September 2019

Annual Audit Letter September 2019

Fees for non-audit services

Service

Planned

fees £

Audit related services

- Housing Benefit grant certification

- Teachers’ Pension return certification

- Certification of Housing Capital Receipts grant

- GLA grant compliance checklist

12,000

5,000

2,000

3,000

Non-Audit related services 0

Non- audit services

• For the purposes of our audit we have made enquiries of all Grant

Thornton UK LLP teams providing services to the Council. The table

above summarises all non-audit services which were identified.

• We have considered whether non-audit services might be perceived

as a threat to our independence as the Council’s auditor and have

ensured that appropriate safeguards are put in place.

The above non-audit services are consistent with the Council’s policy

on the allotment of non-audit work to your auditor.

Additional fees

Additional work was required during the year due to the impact of the

McCloud pensions ruling, to gain assurance over Property Plant and

Equipment and IAS19 pensions valuations, to gain assurance over the

completeness and accuracy of data transferred to the new general

ledger during the year and assess the effectiveness in operation of the

new system, and in auditing the specific accounting requirements and

disclosures arising from actions taken in response to the Grenfell Tower

fire. Fees variations are subject to PSAA approval

Our connections We are well connected to MHCLG, the

NAO and key local government networks

We work with CIPFA, Think Tanks and legal firms to develop workshops and good practice

We have a strong presence across all parts of local government including blue light services

We provide thought leadership, seminars and training to support our clients and to provide solutions

Our people We have over 25 engagement leads

accredited by ICAEW, and over 250 public sector specialists

We provide technical and personal development training

We employ over 80 Public Sector trainee accountants

The Local Government economy

Local authorities face unprecedented challenges including:

- Financial Sustainability – addressing funding gaps and balancing needs against resources

- Service Sustainability – Adult Social Care funding gaps and pressure on Education, Housing,

Transport

- Transformation – new models of delivery, greater emphasis on partnerships, more focus on

economic development

- Technology – cyber security and risk management

At a wider level, the political environment remains complex:

- The government continues its negotiation with the EU over Brexit, and future arrangements

remain uncertain.

- We will consider your arrangements for managing and reporting your financial resources as part

of our work in reaching our Value for Money conclusion.

- We will keep you informed of changes to the financial reporting requirements for 2018/19

through on-going discussions and invitations to our technical update workshops.

New opportunities and challenges for your community

Our quality Our audit approach complies with the

NAO's Code of Audit Practice, and International Standards on Auditing

We are fully compliant with ethical standards

Your audit team has passed all quality inspections including QAD and AQRT

Grant Thornton in Local Government

We work closely with our clients to ensure that we understand their financial challenges,

performance and future strategy.

We deliver robust, pragmatic and timely financial statements and Value for Money audits

We have an open, two way dialogue with clients that support improvements in arrangements

and the audit process

Feedback meetings tell us that our clients are pleased with the service we deliver. We are not

complacent and will continue to improve further

Our locally based, experienced teams have a commitment to both our clients and the wider

public sector

We are a Firm that specialises in Local Government, Health and Social Care, and Cross

Sector working, with over 25 Key Audit Partners, the most public sector specialist Engagement

Leads of any firm

We have strong relationships with CIPFA, SOLCAE, the Society of Treasurers, the Association

of Directors of Adult Social Care and others.

Our relationship with our clients– why are we best placed?

Early advice on technical accounting issues, providing certainty of accounting treatments, future

financial planning implications and resulting in draft statements that are 'right first time’

Knowledge and expertise in all matters local government, including local objections and

challenge, where we have an unrivalled depth of expertise.

Early engagement on issues, especially on ADMs, housing delivery changes, Children services

and Adult Social Care restructuring, partnership working with the NHS, inter authority

agreements, governance and financial reporting

Implementation of our recommendations have resulted in demonstrable improvements in your

underlying arrangements, for example accounting for unique assets, financial management,

reporting and governance, and tax implications for the Cornwall Council companies

Robust but pragmatic challenge – seeking early liaison on issues, and having the difficult

conversations early to ensure a 'no surprises' approach – always doing the right thing

Providing regional training and networking opportunities for your teams on technical accounting

issues and developments and changes to Annual Reporting requirements

An efficient audit approach, providing tangible benefits, such as releasing finance staff earlier

and prompt resolution of issues.

Delivering real value through:

Our client base and delivery We are the largest supplier of external audit

services to local government

We audit over 150 local government clients

We signed 95% of our local government opinions in 2017/18 by 31 July

In our latest independent client service review, we consistently score 9/10 or above. Clients value our strong interaction, our local knowledge and wealth of expertise.

Our technical support We have specialist leads for Public Sector

Audit quality and technical

We provide national technical guidance on emerging auditing, financial reporting and ethical areas

Specialist audit software is used to deliver maximum efficiencies

Our commitment to our local government

clients

• Senior level investment

• Local presence enhancing our

responsiveness, agility and flexibility.

• High quality audit delivery

• Collaborative working across the public

sector

• Wider connections across the public sector

economy, including with health and other

local government bodies

• Investment in Health and Wellbeing, Social

Value and the Vibrant Economy

• Sharing of best practice and our thought

leadership.

• Invitations to training events locally and

regionally – bespoke training for emerging

issues

• Further investment in data analytics and

informatics to keep our knowledge of the

areas up to date and to assist in designing a

fully tailored audit approach

© 2019 Grant Thornton UK LLP | Annual Audit Letter for the Royal Borough of Kensington and Chelsea | September 2019

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Documents

Annual Audit Letter 2018-19 - Royal Borough of Kensington ... · Our Annual Audit Letter (Letter) summarises the key findings arising from the work that we have carried out at the