Agenda item

The Committee considered the Annual Audit Letter 2014/15.

John Gregory from Grant Thornton, the Council's external auditor introduced the report and highlighted the following points:

·         This Annual report was an update of his report to Committee in June 2015. An unqualified audit opinion had been given on the accounts, the value for money and Pension Fund

·         Discussions had been held and continue to be held with officers about the delays to last year's audit and the associated additional fees. He was optimistic that these delays would not re-occur in this year's audit

·         He had reported in June that there was likely to be additional fees. Discussions had been held with the Chief Financial Officer at the conclusion of the accounts and an additional fee of £8,900 had been agreed

·         A fee of £4,200 had been agreed for audit work associated with teacher's pension return. A fee of £3,000 had also been agreed for audit work associated with HCA compliance audit – gypsy and traveller sites. Although this work was requested to be done by the Council, it was a requirement that an independent reporting accountant such as the external auditor undertook the work

·         The Government was introducing changes in the way the accounts would be produced for implementation in 2018. The Government had effectively brought the accounts process forward by 2 months. He did not anticipate that there would be a problem for this Council as it already produced its accounts in advance of the statutory deadline. 

In the ensuing debate, the following principal points were raised:

·         The representative of the Chief Financial Officer explained that the Council was already producing the accounts within the proposed timescale set out by the Government in its revised legislation therefore he anticipated very little disruption to work practices as a result. The Council had taken on board the advice from the external auditor about improving processes for next year  and had adopted a different approach whereby the 2015/16 accounts had been divided into different sections of work with the aim that the work was handled more effectively and dealt with earlier. Grant Thornton had approved these processes. There were significant changes in the accounts in relation to disclosure and discussions had been held with highways engineers to include an entry on the balance sheet for highways infrastructure. The Council had an action plan in place to improve capital transactions across property services. The Annual Governance Statement process had been reviewed and the risk management group would now be involved in the process  

·         The inclusion of highways infrastructure on the balance sheet was welcomed however would the timescale for the production of the accounts be affected by this extra work? John Gregory commented that Grant Thornton was running a series of workshops in the new year. The aim was to work with clients to gain an understanding of the process as early as possible to avoid issues later in the accounts process

·         In response to a query, the representative of the Chief Financial Officer explained that the difficulties experienced by the external auditor in accessing Council documents had now been resolved. It related to a concern officers had about the release of sensitive information to external agencies. The Council now had an agreed process with Grant Thornton to handover data in an encrypted and password protected way

·         In response to a query, John Gregory explained that the formal objections to the accounts related to the 2013/14 accounts and had been dismissed. The fee of £30k related to this work. Nothing had been heard since from the objectors for the 2014/15 accounts. The certified Certificate of Completion for 2014/15 accounts had been signed and therefore there was no further statutory right of objection.     

RESOLVED that the Annual Audit Letter 2014/15 be noted.