Agenda item

8.1

The Committee considered a report of the Interim Executive Director, Resources that communicated any relevant matters arising from the external audit of the 2014/15 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).

8.2

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, as a result of the external audit of the accounts, the necessary amendments had been made to the Statement of Accounts and agreed with the External Auditors. There was also one uncorrected error relating to a transaction that had been applied contrary to the new guidance in accounting for schools’ assets. As the amendment of the previous year’s figures would have involved a significant number of amendments having to be made and was below the threshold to be considered trivial by the External Auditors, the figures would be amended for the 2015/16 accounts.

8.3

Sue Sunderland (Director, KPMG) presented the external audit of the accounts and thanked Clair Sharratt and the Finance Team for their hard work and the quality of the accounts and indicated that the amendments had been fairly minor. The only outstanding issue related to the Whole Government Accounts and this was expected to be completed by 28 September and an unqualified opinion issued on the accounts. She confirmed that the accounts would not be amended for the issue relating to the transaction relating to schools’ assets due to the amount involved. She was satisfied that the Council had arrangements in place to address the remaining risks relating to Adult Social Care and the need for saving plans for future years and would give an unqualified value for money conclusion. The continuing issue relating to pension data flows would be revisited in 2015/16 when the new pension system was able to monitor performance of data flows from other bodies.

8.4

Officers responded to questions from members of the Committee relating to non-audit work, reserves and the bad debt provision for short term debtors, as follows:-.

·         The Director, KPMG stated that there was a limit on the amount of non-audit work they could undertake and this could be up to 20% of the audit fee or £18k whichever was the greater and this year it would be 20%. This required the approval of the Public Sector Audit Appointments (PSAA) Ltd and one of the considerations was whether the work created a perceived threat to KPMG’s independence. Initially, the PSAA had not allowed KPMG to undertake the work on the ‘Adult Social Care - Financial Grip’ report but this work had now been approved. There was a rigorous process in place for consideration of the non-audit work and KPMG took its independence seriously.

·         The Interim Director of Finance indicated that a prudent amount of reserves relating to the General Fund were held back but no more than was needed. This involved an assessment of all the risks.

·         The Acting Senior Finance Manager indicated that it was prudent to make a provision for bad debts for short term debtors.

8.5

The Chair (Councillor Steve Jones) reported that Sue Sunderland was attending her last meeting of the Committee.

8.6

Resolved: That the Committee:-

(a)

accepts the Report to Those Charged with Governance (ISA 260) 2014/15;

(b)

approves the Statement of Accounts for 2014/15;

(c)

requests 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;

(d)

thanks Clair Sharratt and her Finance Team for their work on the Statement of Accounts and Sue Sunderland, Simon Dennis and the Audit Team at KPMG for their work on the ISA 260 report; and

(e)

places on record its appreciation to Sue Sunderland for her work as the Council’s External Auditor and offers its best wishes for the future.