Agenda item

Members considered a report reviewing the accounting policies, actuary assumptions and materiality levels that will be used for the preparation of the 2017/18 accounts.

There was also the opportunity for the External Auditor to explain the process of External Audit of the Statement of Accounts, and the approach to the Value for Money Audit 2017/18.

The following points were highlighted:

·         The report sought to give assurance that WLDC were well under way in terms of the timetable, and outstanding tasks.  Some of the formalities within the report were around the approval of the accounting policies;

·         The Community Infrastructure Levy (Cil) had been introduced; however no income had been received from this scheme as yet;

·         The materiality level for WLDC, i.e. the level at which items were disclosed within the Statement of Accounts was set at £750k.  The external auditors have set their level at £850k;

·         The earlier closedown deadline would mean that Governance and Audit committee would not see the statement of accounts prior to issue.  They would be signed by the Section 151 Officer by 31 May, and then passed to the external auditors.  There can be circulated to Governance and Audit Members when they are ready to go to the auditor, before the accounts are finally due to be signed off in July;

·         In terms of the External Audit Plan, there were two things require by statute.  Firstly an opinion on the accounts, and secondly a ‘value for money’ conclusion;

·         The materiality level that the external auditors used determined what level of error could influence users of accounts when making their decision.  Although external audit have a materiality level of £850k, they do not audit to this level;

·         There were three significant risks identified in relation to the external audit for 2017/18:

1.    Valuing of equipment; some council assets have not been valued for 3-4 years, so the value of these assets needed to be reassessed.  This would only ever be an estimate, is a significant value in the accounts, and was a material value;

2.    Pensions liabilities risks – the estimated liability was just under £36.5 million.  This would be audited from two angles – the information provided to the actuary, and the pension fund element.  It was a material value, and a figure outside of WLDC control;

3.    Faster close – the fundamental challenge was to maintain the approach taken in previous years, and to deliver accounts by the end of May.

·         Areas of audit focus were also highlighted; these included commercialisation, and relationships with other companies;

·         No conclusion would be provided on whether WLDC were providing a value for money service; however, the external auditors’ job was to make sure that all of the appropriate measures were in place to provide value for money;

·         The main risk on value for money was the medium term financial plan – this was common with all authorities;

·         The planned audit fee was the same as last year’s fee.

·         The resources were in place to provide the external audit within expected timescales;

There then followed some discussion on the signing off of accounts, and the dates that Members would receive the unaudited accounts.  It was deemed not beneficial to send out the unaudited accounts by email to Members; however an extra training session, prior to the Governance and Audit meeting in June was agreed that could deal with the unaudited accounts.  The unaudited accounts would be brought to Governance and Audit committee in June.

Lastly, the external auditors declared that they had carried out some non-audit work with the Challenge and Improvement committee.

                                    RESOLVED:

(1)  To approve the Accounting Policies (as included at Appendix 1 of the report);

(2)  To note the pension assumptions (Appendix 2 of the report);

(3)  To note the risk assessment (Appendix 3 of the report);

(4)  To approve the proposed materiality levels as included at section 4 of the report, including the revisions detailed at 5.7 of the report;

(5)  To note the key closedown dates at section 7.6 of the report;

(6)  To accept the main accounting changes for 2017/18 and onwards as shown at section 8 of the report;

(7)  To accept that in future years, due to the earlier deadline the Unaudited Statement of Accounts will be circulated after issue by the Section 151 Officer;

(8)  To note that accounting policies for group accounting and accounting for the Community Infrastructure Levy are now required;

(9)  To note and receive the External Audit information contained within the report at Appendix 4.