Agenda item

7.1

The Committee received a report from the Council’s external auditor, Ernst & Young.

7.2

Hayley Clark explained that Members had seen the majority of the report as part of a report which was presented at the last meeting therefore, they did not intend to go through the report in detail. As mentioned at the previous item, external audit was still working on closing some final areas of the accounts and that a status update had been given on those areas. 

7.3

Hayley Clark referred to an issue discussed at the last meeting, where the triennial issue could impact on the timeline. She mentioned that CIPFA (Chartered Institute of Public Finance and Accountancy) were producing guidance on this although she was yet to receive it. Therefore, she would monitor of this was to have any impact on signing off on the accounts.

7.4

Dan Spiller explained that he would update Members on the errors which were not included in the previous report presented at the previous meeting. These were: -

• Fraud Risk (page 9) – Calculation error which led to figure going over reporting threshold.
• Fraud Risk (page 10 & 11) – Calculation error due to double counting income/expenditure figures.

It was mentioned that these were not of significant impact.

7.5

Dan Spiller explained that the work carried out in relation to Infrastructure Assets was outlined at page 12 and 13 of the report.

7.6

Page 14 and 15 of the report gave further detail of the reporting external audit’s specialists had given in relation to PPE (Property, Plant and Equipment). It was mentioned that the main risk identified in this section related to the valuation of car parks. This issue related to the yield (6.25%) used by the Council’s valuation team being too strong for a valuation predicted on trading profit. External Audit expected a yield in the region of 11% to 12% for Council run/managed car parks.

7.7

Page 26 set out the audit differences between the Council and External Auditors and the adjustments that had been made by management. Page 27 identified the differences that had not been adjusted by management therefore Dan Spiller asked the Committee if they were comfortable with those areas identified.

7.8

It was mentioned that page 37 onwards in the report highlighted the control recommendations by external audit. The Committee were directed to the two red rating audits mentioned in this section.

7.9

Members of the Committee asked questions and following responses were provided: -

7.10

Dan Spiller explained that on page 27 of the report, the second column identified how services were really impacted. He added that none of the areas identified were of significant impact.

7.11

Hayley Clark mentioned there could always be lessons learnt when auditing the Council’s accounts year on year and that external audit carried out a briefing after the closure of an audit to discuss lessons learnt. This also gave external audit the opportunity to look at how they can audit the Council better going forward. She explained that although the Council had gone through changes, the Council always had an historic well run Finance team which helped the process. It was reported in the Value for Money section of the report that external audit had not identified any areas of significant weakness although due to the recent changes in the council system, she recommended that the Council closely monitor how this change could impact on the Council’s budgets, especially as budgets constraints are forever increasing.

7.12

The Chair thanked the Council’s external auditors Ernst & Young for their audit on the Council’s accounts.

7.13

RESOLVED: That (1) the committee noted the content of the report; and (2) gave approval to the Director of Finance and Commercial Services, in consultation with the Chair, to sign off the final version of Statement of Accounts and Letter of Representation.