Monday 26 July 2010

A rather odd coincidence : The cost of auditing Barnet Council

I came across a rather odd coincidence whilst doing some background research for another blog on Barnet Council.  There is a document concerning the fees for auditing Barnet Council on the council website -
http://committeepapers.barnet.gov.uk/democracy/reports/reportdetail.asp?ReportID=9355

It contains the following detail :-

Audit fee Grant Thornton UK LLP  Grant Thornton House
                                                                                                          2010/11       2009/10
Financial statements, including WGA                                                 £210,000     £170,000
Use of Resources/VFM Conclusion [including risk based work]        £205,000     £245,000
Total audit fee                                                                                   £415,000     £415,000

Now I have no idea whatsover a local authority audit should cost. I'm sure this is great value, but there is one question I don't understand. It seems to me rather strange that in 2010-11 the price of the Financial statement goes up by exactly the same amount as the cost of resources goues down, giving a magic figure of £415,000. Was this just a remarkable coincidence? I do wonder whether the supplier has been challenged rigorously enough on price. It is rather clear from this document,  reading the "Risks" section that the whole Future Shape program is inherently "risky".

It looks to me as if there is scope within the audit package for a cost challenge. If the financial statements are cheaper this year, why has the cost of the resources increase? I'm sure it's value for money, but it struck me as rather odd. Anyway, as ever Council officials are welcome to leave a message explaining. In my experience, when dealing with vendors within my company, if there are nice little coincidences in quotations such as these, often a little more savings can be found when a cost justification is sought. Then again, it's my money I'm spending. Oh yes, I forgot, Barnet Council's money is mine as well. That's why I thought I'd ask the question.

1 comment:

Broadway Blogger said...

Certainly worth asking the question. It does seem rather strange.....