Agenda item

This item was considered before the Statement of Accounts.

Under the statutory Code of Audit Practice for Local Government bodies our external auditors, Grant Thornton were required to issue a report to those charged with governance summarising the conclusions from their audit work.  Members considered this report which was presented by Mr Baker.

Mr Baker advised that the statutory deadline to complete the audit work had been brought forward to the end of July which meant a more pressured timescale however,it was noted that at the time of writing the report the audit work was substantially complete and there were no issues that would require further modification of the audit opinion or material change to the financial statements.

As such the anticipated audit opinions were:-

·        The anticipated audit report opinion would be unqualified;

·        The External Auditors anticipated issuing an unqualified value for money conclusion.

In response to a question raised by Councillor Smith regarding the frequency of property valuations, Mr Baker confirmed that 20% were fully revalued with the rest updated using a desk top evaluation.  The Director of Corporate Services advised that this Committee considered how property was valued from changes identified in the code of practice a number of years ago (resolution 15/13 refers) which set out that the same type of assets be valued at the same time; whereas the Authority commissioned revaluations of its assets on a rolling basis given the majority of buildings were fire stations.

As reported on the agenda (Revisions to the Statement of Accounts 2018/19) there was one adjusted mis-statement relating to costs associated with both the Fire-fighter Pensions scheme and the Local Government Pension Scheme, which arose from a legal challenge in respect of alleged unlawful discrimination arising from the Transitional Provisions in the Firefighters Pension Regulations 2015. Initial accounting advice provided by CIPFA was to treat this as a contingent liability, however following the Supreme Court’s refusal to allow an appeal the accounting policy adopted by external auditors required the additional liability to be recognised in the accounts.  It was noted that the fee charged included an additional £2k in respect of the additional work for this which brought the total fee to £26k.  The proposed additional fee was consistent with similar audited bodies and ultimately required Public Sector Audit Appointments approval before final agreement.

The Director of Corporate Services highlighted that this year’s audit had been challenging for all involved.  He advised that this appeared to be a national issue affecting the majority of local government audits this year across all audit firms.  Discussion took place regarding this, and specifically the impact of additional work around pension adjustments and building valuations, the revised auditing timeframes, further fee reductions and the capacity to undertake the work in the required timeframes.  Both the Director of Corporate Services and External Audit Partner felt that national issues required addressing and better planning was needed to ensure the right timeframe and resources were in place in future.  All staff were commended for their efforts to achieve the deadline.

The auditors had identified 3 minor misclassification and disclosure changes required (as set out on page 20 of the Audit findings Report).  However, it was worth noting that the auditor reports highlighted “The financial statements were received on time….. and were prepared to a good standard”.

RESOLVED: -   That the Committee:-

i)    Noted and endorsed the matters raised in the report;

ii)   Noted the unqualified opinion on the financial statements;

iii)  Noted the value for money conclusion.