Council faces six-figure bill for value for money report (From Hereford Times)

Council faces six-figure bill for value for money report

3:00pm Friday 22nd February 2013 in News By Bill Tanner

CASH-strapped and cuts slashed Herefordshire Council faces a six-figure bill for a value for money report.

The £164,803 sum – as proposed – covers the cost of an outside audit of the council’s accounts over 2012/13.

But even that fee represents a reduction of well over £100k on the bill for the year before, which came in at nearly £275k.

The Audit Commission appointed Birmingham based Grant Thornton UK LLP as Herefordshire Council’s auditors, a service that the firm expects to offer for at least the next five years. It is also the Audit Commission that sets the scales of fees for this service.

This week, the council’s audit and corporate governance committee was told that the council’s scale fee for 2012/13 would be £164,803, down 40 per cent - or £109,869 - on the £274,672 total for 2011/12.

For that sum the council gets a full audit of its financial statements and conclusions on the “economy, efficiency and effectiveness” of the way it uses resources – the value for money element.

Under the Audit Commission Act, Grant Thornton must be satisfied that the council has “adequate” arrangements in place to secure that value for money, focusing on securing financial resilience and prioritising resources within tightening budgets.

Over 2013/14 the council faces a cut of nearly £5.5m in central government funding alone working to a budget of £145m and a shortfall of around £10m overall. The council’s survival as a fully-functioning unitary authority depends on a medium term savings plan that can cope with more cuts coming its way and keep services within resources.

The committee was told that the basis of the fee included “certain assumptions” such as Hoople – the company set up by the council to provide public sector support services –providing “appropriate access and working papers of the required standard.”

Oversight of the Hoople contract is a responsibility of the council’s chief
finance officer.

Grant Thornton confirmed its appointment as the council’s auditor in December last year. Then, the council was told that Grant Thornton would bill quarterly in advance and, given the timing of its appointment, would bill for two quarters dated December 2012.

A break down of billing for the main audit fee is:

• December 2012 - £82,401
• January 2013 - £41,201
• March - 2013 - £41,201

Audit planning and other interim procedures start next month with the annual audit letter summarising the findings expected out in October.