Decisions
External Audit updates
This page shows the decisions made by any committees looking at the matter. This might include agreeing the Terms of Reference for the inquiry or deciding to hold a public consultation on the matter.
02/08/2021 - Trafod y farn Archwilio Allanol (Adroddiad ISA 260) ar gyfer y flwyddyn ariannol 2020-21
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.
Actions
·
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.