Agenda item

Members considered an External Audit report on the quality of the Statement of Accounts. The report was introduced by Mark Dalton and Mike Norman of Mazars, the Authority’s External Auditors. In presenting the report they highlighted the key headlines, these being

·                An anticipated unqualified Audit Opinion on the 2019/20 Statement of Accounts

·                Anticipated to have no significant weaknesses to report in relation to Value for Money, however the final report would be issued within 3 months of the audit judgement on the accounts.

·                The Whole of Government Accounts had not yet been issued to authorities to complete and the Auditors were awaiting instruction from the National Audit Office.

·                The quality of statements submitted had been high with few amendments being required

·                There have been no public objections to the accounts

The Auditor had highlighted within the report three significant risks and provided details of how these risks were addressed and their conclusion on the risks listed below;

·  Management override of controls

·  Net Pension Liability

·  Valuation of Property, Plant and Equipment

It was stressed that these were largely routine matters and not a qualification.

The Auditor highlighted the management judgement in respect of the Minimum Revenue Provision Policy in relation to Investment Properties and recognised that a voluntary revenue provision was made in 2020/21.  This matter would continue to feature on the Memorandum.

The audit had not identified any significant internal control deficiencies, and the Auditor confirmed that they had not encountered any difficulties in undertaking their work.  Thanks were expressed to the finance team for their co-operation.

The Auditor highlighted two material adjustments to the draft Statement of Accounts, relating to the Pension Liability valuation and the clarification, after the publication of the draft statements, of a change in the treatment of the Additional Restrictions Grant.

Debate ensued and in response to questions, noting that with all the adjustments requested, the bottom line had been affected by around £60k, less than the amount for a material consideration, Officers advised  this could not be treated as a simple post balance adjustment, the reasons for this were outlined and understood.

Members were advised audit procedures were designed to identify fraud whilst undertaking normal procedures and any concerns would certainly be brought to the attention of this Committee and the Management Team.  Not every individual transaction was checked, linked to the concept of materiality. Deeper investigations were undertaken should initial samples demonstrate a reason to do this.   

The Committee asked further questions seeking to understand when External Auditors may commence an investigation to particularly look for Fraud, would that be on request from Members?, or would that be when external circumstances were brought to the attention of External Audit? It was confirmed, that it could arise for a number of reasons, including those examples provided or by a concerned resident. It was further confirmed that media reports were borne in mind and that Auditors work was retrospective.

In response to questions, the Auditors confirmed that there were no concerns to bring to the Committee’s attention.  Financial sustainability of the Council was a matter to be addressed as part of the Value for Money Audit, the findings of which would be reported to a future meeting of the Committee. 

RESOLVED that the ISA 260 completion report be accepted and any recommendations with the ISA 260 be borne in mind when approving the Annual Statement of Accounts.