Agenda item

5.1

The Interim Director of Finance introduced a report of the Interim Executive Director of Resources that communicated any relevant matters arising from the external audit of the 2013/14 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).

5.2

The Finance Manager (Strategic Finance) outlined the headlines from the Statement of Accounts, as summarised in the Foreword. In particular, she referred to savings achieved and the £415k overspend on the budget, the introduction of significant changes to local government finance and maintaining the level of reserves.

5.3

The Interim Director referred to the findings from the external audit which had identified an error which had not been amended in the accounts where the revaluation of a property asset had not been properly transacted. This was not considered material to the accounts and would be corrected on the 2014/15 accounts. It was intended that an unqualified audit opinion would be given by the External Auditor on the accounts in relation to internal controls and a qualified conclusion in respect of issues relating to Adult Social Care. Also no material uncertainties had been identified.

5.4

The Director, KPMG introduced the Report to Those Charged with Governance (ISA 260) that summarised the key findings from the audit of the Council’s financial statements for 2013/14 and the work to support KPMG’s conclusion on the Council’s arrangements to secure economy, efficiency and effectiveness in its use of resources (the value for money conclusion).  She referred to the summary of the headline messages relating to the control environment, completion of the report and value for money conclusion and risk areas. The controls over the majority of the Council’s key financial systems were sound but there were some weaknesses in respect of individual finance systems relating to pensions data flows and the Credit Clearing Account and a diminution of control following a review by the Council and change in the practice relating to journals. It was anticipated that an unqualified opinion would be issued in relation to the Council’s financial statements by 30 September 2014. The Director also outlined the specific value for money risks in relation to the Adult Social Care overspend and this meant that there would be a qualified opinion on the value for money conclusion.

5.5

In response to a question on the issue of the Council having discontinued its previous practice of requiring all journals to be authorised by an officer separate to the preparer and whether this should be permitted, the Director KPMG commented that other local authorities were making similar changes. One option could be to ask Internal Audit to undertake testing in this area as KPMG’s sample testing was small. The Interim Executive Director, Resources stated that it was about moving money between accounts and the level of risk was low. The Assistant Director of Finance added that there was no planned audit for this area of work and it was not considered a high risk.

5.6

Officers responded to further questions from members of the Committee on the External Auditor’s report relating to South Yorkshire Trading Standards Unit, the Credit Clearing Account and Adult Social Care.

5.7

In respect of the risk identified relating to savings plans, the Director KPMG indicated that due to the scale of the savings and the decisions that underpin those savings, it was accepted that some savings may not be achieved during the year as planned but that it was about how that would be addressed by management. The Chief Executive stated that the Council continued to deliver a balanced budget at the end of the year and he did not recall having to abandon an in year saving. However, achieving savings was becoming more difficult.

5.8

Officers also responded to questions on the Statement of Accounts relating to Corporate expenditure, how the expenditure spent outside the capital programme was managed and the Sheffield City Trust transactions.

5.9

Resolved: That the Committee:-

(a)

accepts the Report to Those Charged with Governance (ISA 260) 2013/14;

(b)

approves the Statement of Accounts for 2013/14;

(c)

requests the Chair of the Audit 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 the Finance Team for their work on the Statement of Accounts; and

(e)

thanks Sue Sunderland, David Phillips and her Audit Team at KPMG for their work on the ISA 260 report.