Issue - meetings

(External Auditor) International Standard on Auditing 260 requires the External Auditor to report to those charged with governance certain matters before they give an opinion on the Statutory Statement of Accounts. The External Auditor has indicated that their audit of the Council’s Statutory Statement of Accounts for 2016/17 is nearly complete and that they wish to present their ISA260 report to this meeting. (AGC-007-2017/18).

The External Auditors introduced the audit report for the year ended 31 March 2017. They had substantially completed their audit procedures in accordance with the planned scope and their objectives had been achieved, subject to resolutions of matters set out in the report.  They had identified two further significant risks during their updated risk assessment, which were previously reported as ‘normal risk’. The two upgraded risks were Property, Plant and Equipment Valuations and Pension Liability; but given the size and sensitivities of these estimations the risks were considered ‘significant’. There were no other changes made to their risk assessments, although they would be making a small number of presentational changes, but nothing of significance.

They still had 10 outstanding matters to consider and would report back on their status at a future Audit and Governance Committee meeting.

They thanked the finance team for their help and for providing the information required.

Councillor Knapman commented that this was as good an audit report that he had come across, but wanted to know if the work would be done on time. He was told that it would be; they had the staff in place to finish it by the end of the week.

RESOLVED:

That the external auditors annual governance report for 2016/17 be noted.

(Director of Resources) To consider the attached report (FPM-012-2017/18). (The Annual Governance Report will follow as part of a supplementary agenda.)

The Director of Resources presented a report regarding the Annual Governance Report. The International Standard on Auditing 260 required the External Auditor to report to those charged with governance on certain matters before they gave an opinion on the Statutory Statement of Accounts.  The audit of the Council’s Statutory Statement of Accounts for 2016/17 would be presented to the Audit and Governance Committee on 18 September 2017.

The audit report highlighted the key findings of the financial statements of the Council for the year ending 31 March 2017, and the director of Resources advised the Cabinet Sub-Committee of the following key findings:

(a)          That the Property, Plant & Equipment valuations and Pension Liability assumptions had been classified as significant risks during the updated risk assessment. subsequent to the Planning Report on 10 March 2017;

(b)          That the final materiality was £2,000,000, which had been increased by £100,000 based on the gross expenditure in the current year’s draft financial statements;

(c)          That there had been no other significant changes to the planned audit approach or any restrictions placed upon the audit;

(d)          That the audit had not identified any material misstatements to date;

(e)          That a number of presentational changes had been made to the draft financial statements as a result of the audit;

(f)           That there had been no unadjusted audit differences;

(g)          That the there had been no significant deficiencies in internal controls;

(h)          That subject to the successful resolution of outstanding matters, it had been anticipated that a modified opinion on the financial statements for the year ended 31 March 2017 would be issued;

(i)            That there were no exceptions to report, in relation to the consistency of the annual governance statement;

(j)            That an unmodified conclusion on the Council’s arrangements to secure economy, efficiency and effectiveness in the use of resources was anticipated being issued; and

(k)          That the Council was below the audit threshold for a full assurance review of the Whole of Government Accounts return and no other powers or duties under the Local Audit and Accountability Act 2014 had been exercised.

Resolved:

(1)          That the External Auditor’s Annual Governance Report be noted.

Reasons for Decisions:

To ensure that Members were informed of any significant issues arising from the audit of the Statutory Statement of Accounts.

Other Options Considered and Rejected:

The report was for noting, no specific actions were proposed.