Trafod y farn Archwilio Allanol (Adroddiad ISA 260) ar gyfer y flwyddyn ariannol 2020-21
Decision Maker: Senedd Commission Audit and Risk Assurance Committee
Is Key decision?: No
External Audit Updates
The Assembly Commission Audit and Risk Assurance Committee considers the Wales Audit Office planned audit activity and reviews its results.
ARAC (03-21) Paper 3 – ISA260 Report
4.1 The Chair welcomed Ann-Marie Harkin and Gareth Lucey to the meeting.
4.2 Audit Wales (AW) commented on the superb support received from Nia Morgan and the Finance team and thanked everyone involved for all their efforts in what was the second year of completing the audit remotely. Ann-Marie noted that the completion of the accounts so early was a great achievement with very few issues arising. Ann-Marie apologised for the confusion over who would sign the accounts and confirmed that she would be signing them on behalf of the Auditor General for Wales due to his previous employment at the Commission.
4.3 She highlighted one uncorrected misstatement of £273,000 for what Audit Wales considered to be misclassification of capital expenditure. Ann-Marie acknowledged that this was a grey area in accounting terms but Audit Wales technical team had advised that it be recorded as capital as opposed to revenue expenditure. She advised that this was well below the threshold of materiality and had no impact on the audit opinion.
4.4 Audit Wales intended to issue an unqualified audit opinion on the accounts.
4.5 Nia welcomed the opportunity to raise her concerns with the Committee about what she believed was the inconsistent approach taken by Audit Wales on this type of spend. She highlighted that, in previous years, more significant spend on building improvements had been correctly stated in the accounts as capital spend. She had discussed the issue at length with her team and Audit Wales and considered this to be a disagreement as opposed to an error as implied in the ISA260 report.
4.6 Nia also wanted to record her thanks for the phenomenal effort by members of her team to achieve such a successful and timely outcome.
4.7 The Chair thanked Nia and Audit Wales for the courteous and diplomatic way in which they had expressed their difference of opinion and acknowledged the frustration around the inconsistency and late identification of the issue, particularly given its low value. He encouraged both parties not to let this issue adversely affect their good relationship and to liaise closely on the treatment of future investment in the estate in the accounts. The Chair requested details of the advice provided by the Audit Wales technical team to inform the future treatment of this type of spend. Whilst noting this was not standard practice, Audit Wales agreed to share the technical advice with the Commission. The Chair welcomed the unqualified audit opinion and the early completion of the audit which was an excellent achievement. He would welcome feedback from the lesson learned sessions at the Committee’s autumn meeting including details of any future discussions..
4.8 The Chair was pleased to hear that the Auditor General for Wales would sign the accounts next year and would arrange to meet with him privately over the summer. Ann-Maire assured the Committee that he had been fully sighted on the accounts.
· Audit Wales to share advice from technical team with the Commission’s Finance Team.
· Nia Morgan to feedback to the Committee on discussion with Audit Wales around accounting for capital and revenue expenditure.
· Chair to meet Auditor General to follow up the issues raised.
Publication date: 02/08/2021
Date of decision: 18/06/2021
Decided at meeting: 18/06/2021 - Senedd Commission Audit and Risk Assurance Committee