Crawley Borough Council’s concerns over audit costs
Crawley Borough Council is to ask its auditors to justify a 60 per cent increase in fees between 2018/19 and 2019/20.
During a meeting of the audit committee on Thursday (April 29), members discussed the bill from Ernst & Young for £90,824, saying it was some £40,000 more than expected.
The bill for the previous year was £56,499.
Tina Belben (Con, Pound Hill North & Forge Wood) stressed the need for a full breakdown of the fees, including which level of staff were involved in the audit – specialists or trainees – and the hours worked.
Mrs Belben, who is a qualified chartered accountant, added: “It’s very difficult because we’ve got no breakdown as to their hourly charge to compare to other accountants.
“It’s an enormous increase that they’re expecting us to swallow and it’s, in my opinion, unacceptable.”
A report to the last committee meeting, on March 3, showed the planned fees were £77,691.
This too had caused concern prompting both the chairman – Jennifer Millar-Smith – and the head of corporate finance to write to the Public Sector Audit Appointments Limited (PSAA) on the matter.
The fact the final fee was set at more than £90,000 did not go down well with Jonathan Purdy (Con, Three Bridges), who accused the auditors of wanting to ‘penalise their customers for complaining.”
In a statement to the committee, a spokesman for Ernst & Young said the audit of the accounts had presented ‘several different challenges’ including specific responses to Covid-19.
That pandemic work alone added £8,173 to the bill.
He added: “All Ernst & Young’s external audits in the UK are conducted in line with the quality standards set by the Financial Reporting Council which sets out how we do our work; with integrity, objectivity and independence.”
The spokesman pointed out that Crawley’s audit fee was £150,000 a decade ago and that the requirements for an external audit had ‘changed substantially’ since then.
The final say on the fees will go to the PSAA.
The committee recommended that Mrs Millar-Smith write another letter asking them to hold off on making a decision so that the council could receive a full breakdown of costs involved in the audit.
They also recommended that the matter be discussed at the next meeting of the full council.
Ernst & Young will be invited to send a representative, though the firm’s statement made it clear that it reserved the right not to do so as the meeting would be of no ‘additional value’.