Agenda and minutes

The reports were not available to the public within the necessary strict statutory timeframe governed by the Local Government Act 1972, section 100B(4) as amended by the Local Government (Access to Information) Act 1985, however as the Authority’s accounts needed to be signed off quickly and efficiently the Chairman had agreed the items should be considered at the meeting given the public had notice of the agenda and were at liberty to attend for comment.

An apology was received from Councillor Fred Jackson.

Members are asked to consider any pecuniary and non-pecuniary interests they may have to disclose to the meeting in relation to matters under consideration on the agenda.

None received.

RESOLVED: - That the Minutes of the last meeting held on 20 July 2021 be confirmed as a correct record and signed by the Chairman.

Report now attached.

The Director of Corporate Services presented the report.

The draft Statement of Accounts for the financial year ended 31 March 2021 presented to Resources Committee and Audit Committee in July confirmed that: i) the unaudited Statement of Accounts would be signed by the Treasurer to certify that it presented a true and fair view of the financial position of the Authority as at 31 March 2021; ii) this would be subject to review by the Authority’s external auditors, Grant Thornton; iii) that a further report would be presented to the Audit Committee in September, following completion of the external audit; and iv) at that meeting the Chair of the Audit Committee would be asked to sign the final statement of accounts, as well as the Treasurer.  In light of this the Committee noted and endorsed the report and accounts.  Subsequent to that the full set of accounts was submitted for audit to Grant Thornton. 

The Statement of Accounts had been updated to reflect the following changes identified during the audit (as reported in the Audit Findings Report – elsewhere on the agenda) and a revised statement of accounts was considered by Members.

Adjusted Misstatements

There were no adjusted misstatements impacting the key statements.

Misclassifications and disclosure changes

A number of misclassifications and disclosure changes which had been adjusted in the accounts were noted as follows: -

·         Accounting policies – in the draft financial statements i) the accounting policy for provisions was very brief; ii) there was no accounting policy for joint control; and iii) there was an accounting policy for non-current assets held for sale, even though the Authority did not have any – auditor recommendations were: - i) to include more detail in the accounting policy for provisions; ii) include a policy for how joint control was accounted for; and iii) to remove the policy for non-current assets held for sale.

·         Assumptions made about the future and other major sources of estimation and uncertainty – disclosure was made that Local Government Pension Scheme property related assets were subject to material valuation uncertainty at the LCPF which was not the case – auditor recommendation was therefore to remove this disclosure.

·         Critical judgements – i) additional reliefs S31 grant 2020/21 were disclosed as a critical judgement.  These did not appear to be critical judgements and should be disclosed elsewhere; and ii) disclosure of the judgements around the Authority’s assessment that North West Fire Control Limited was a joint operation and that group accounts were not required were not included in the note, but would be useful for users of the accounts to understand these judgements - auditor recommendations were: i) remove the going concern as a critical judgement disclosure; and ii) consider whether business rates additional reliefs s31 grant 2020/21 would be better disclosed as an estimation uncertainty if there was a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and iii) include a discloser of judgements around  ...  view the full minutes text for item 18-20/21

Report now attached.

As part of the year-end process the Authority was required to sign a letter of representation. This letter confirmed that the Authority had disclosed all relevant information in its accounts for the year in question and that all issues which should have been brought to the attention of the auditors had been.

The Treasurer confirmed he would sign the letter, as there were no issues which he felt required disclosure.

RESOLVED: - That the Audit Committee authorised the signing of the letter by the Chair of the Committee.

Report now attached.

Mr Smith, Key Audit Partner attended the meeting remotely to answer any questions.  He introduced the report and confirmed that many areas of the audit had been completed which included processing samples of debtors, creditors, income and expenditure which had been identified as an outstanding matter on page 97 of the agenda pack.  Other items outstanding included completing work on journals, PPE valuations and pension valuations, a response from Lancashire County Pension Fund auditor to a request for assurance over IAS 19 was awaited and clearance of issues from the audit quality review process.  Mr Smith advised that it was more difficult to deliver the audits remotely but there was a lot of hard work being done to meet the deadline of Thursday, 30 September 2021.  Mr Smith then introduced Mr Ayre, Audit Manager to present the report.

Under the statutory Code of Audit Practice for Local Government bodies the Authority’s external auditors, Grant Thornton were required to issue a report to those charged with governance summarising the conclusions from their audit work. 

Mr Ayre advised that at the time of writing the report the audit work was substantially complete and there were no matters of which they were aware that would require modification of the audit opinion or material change to the financial statements, subject to outstanding matters, as mentioned previously.

There was one recommendation relating to self-authorisation of journals as set out on page 20 of the report (page 114 of the agenda pack): -

“Our risk assessment of journal controls noted that there are no automated controls on the finance system to prevent members of finance staff approving their own journals. Whilst our audit work on journals so far has not identified any significant issues as a result of this weakness in internal controls, we recommend that the authority establishes an authorisation control to reduce the risk of financial reporting fraud and/or error in future.”

The response to this was “We have considered the recommendation. We believe our financial monitoring processes are sufficient to identify if such an instance occurred. Neither ourselves, nor internal and external audit, have discovered any instances of error or reporting fraud that the implementation of this would have prevented. Hence, given the size of our finance team (3.5 FTE including the Head of Finance), we don’t feel that introducing further controls is practical or proportionate to the risk.”

There were no adjusted misstatements impacting the key statements. There were several minor disclosure omissions in the draft accounts which had all been rectified.

The Director of Corporate Services advised that the deadline to publish the audit findings report was Thursday that week.  If this was not possible it would be necessary to publish an explanation as to why there was a delay and then publish the report when able.  He advised that it was expected there would be many authorities unable to publish on time.  Mr Smith advised that incomplete audits was a current issue across the public sector with less than  ...  view the full minutes text for item 20-20/21

The next scheduled meeting of the Committee has been agreed for 10:00 hours on 30 November 2021 in Washington Hall, Service Training Centre, Euxton.

Further meetings are:    scheduled for 29 March 2022; and

                                           proposed for 26 July 2022 and 27 September 2022.

The next meeting of the Committee would be held on 30 November 2021 at 10:00 hours in Washington Hall, Service Training Centre, Euxton.

Further meeting dates were noted for 29 March 2022 and agreed for 26 July 2022 and 27 September 2022.