Agenda item

7.1

The Committee considered a report of the Interim Executive Director, Resources that communicated any relevant matters arising from the external audit of the 2015/16 Statement of Accounts.  Appended to the report were the Statement of Accounts and the External Auditor’s Report to those Charged with Governance (ISA 260).

7.2

Clair Sharratt (Acting Senior Finance Manager, Strategic Finance) presented the report and highlighted that the External Auditors intended to issue an unqualified audit opinion on the accounts and an unqualified value for money conclusion.  A number of minor misstatements and presentational errors had been identified by officers, and others had been identified as a result of the external audit of the accounts, and the necessary amendments had been made to the Statement of Accounts and agreed with the External Auditors.  There was also one error identified relating to a National Non-Domestic Rate debtor balance, and this has since been corrected for in the final Statement of Accounts.

7.3

The Acting Senior Finance Manager (Strategic Finance) also referred to one other material change since the draft version of the accounts had been produced, which concerned an adjustment required to reclassify the bond repayments for the Major Sporting Facilities.

7.4

Trevor Rees (KPMG) introduced the external audit of the accounts and thanked Clair Sharratt and the Finance Team for their hard work and co-operation.  Alison Ormston then outlined the headline messages for the Council, as set out in section 2 of the KPMG report, the financial statements in relation to two significant risk areas and two other areas of focus, as set out in section 3, and the value for money conclusion set out in section 4.  In particular, she commented on the six specific risk areas identified by KPMG, their recommendations and the management response, as set out in Appendix 1 of the report.  She also drew attention to the additional audit fee that had been agreed with the Council, detailed in Appendix 3.

7.5

Officers and the representatives from KPMG responded to questions from Members of the Committee, including some communicated by the Chair on behalf of Liz Stanley, as follows:-

·         The request for the Committee to receive a report on the governance arrangements for the Council’s ICT systems would be facilitated as part of the standard arrangements for reporting back to the Committee on the progress on implementing recommendations made by the External Auditor.

·         An explanation was provided for the increase in Reserves balances during 2015/16, where a repayment was made to Reserves for a prepayment that had been made in a prior year for the pension deficit, and the change in treatment for the major sporting facilities (MSF) assets, which released revenue funds, subsequently credited to reserves.

·         On the issue of impairment of doubtful debts, it was reported that collection rates continued to improve and the actions being taken to reduce the level of sundry debts were outlined to the Committee.

·         The composition of the Council’s surplus assets and the arrangements in place for disposing of those assets, was outlined to the Committee, and it was reported that the current valuation of £97m was a reduction from £121m in 2014/15.

·         On the issue of reconciliation of housing benefits transactions to the source data from the Academy Housing Benefits system, it was confirmed that appropriate reconciliation work had now been undertaken and future transaction arrangements would include submission of source data to support the monthly reconciliations.  In terms of the potential for this to occur in other service areas and ensuring the lessons learned are shared corporately, it was reported that officers had recently agreed to reinstate a central control team, which would address these issues.

·         The recommendation relating to the long term debtor valuation for the major sporting facilities (MSF) had been made purely to acknowledge that although a valuation had been undertaken, this matter was of a specialist nature and thus it was recommended that a full specialist valuation of the related MSF assets should be undertaken in the 2016/17 period and also as required in the future.

·         As regards the concerns highlighted in relation to IT system assurance, it was recommended that in view of the number of systems and operating models in place, improved oversight and awareness of decision making was required, hence the recommendation to develop an IT assurance framework.

7.6

RESOLVED: That the Committee:-

(a) accepts the Report to Those Charged with Governance (ISA 260) 2015/16;

(b) approves the Statement of Accounts for 2015/16;

(c) authorises the Chair of the Committee to sign (i) the Letter of Management Representations in order to conclude the audit and (ii) the Statement of Accounts; and

(d) thanks Clair Sharratt and her Finance Team for their work on the Statement of Accounts and Trevor Rees, Alison Ormston and the Audit Team at KPMG for their work on the ISA 260 report.