Agenda item

Consideration was given to a report presented by Simon Tompkins, Finance Manager, which advised on matters arising from the external audit of the Council’s 2012/13 Statement of Accounts as presented in the External Auditor’s ISA260 report and, in acknowledging these findings, requested that the Audit Committee approve both the Letter of Management Representations and the audited Statement of Accounts 2012/13.

The unaudited Statement of Accounts had now been subject to audit and any necessary changes discussed and agreed between the Section 151 Officer and the Auditor. The Statement of Accounts, in its revised form, now required approval by Members prior to publication before the end of September, 2013.

The Auditor’s ISA 260 report set out in detail the outcomes from the audit including any changes made to the unaudited Statement of Accounts 2012/13.

Overall, the ISA260 report was an extremely positive one and considered the accounts to be of a high quality. Only a few minor presentational changes were identified all of which have been corrected in the final version of the Statement of Accounts.

None of the presentational changes made affect the financial performance or financial position of the Council reported in the unaudited Statement of Accounts.

In addition, the report confirmed that:-

·                Controls over key financial systems were sound.

·                The audit process was fully supported through good quality working papers and timely responses to audit queries.

·                There were no other matters which needed to be reported to Audit Committee.

As a result of these positive assurances, KPMG anticipate being able to give an unqualified opinion by 30th September that the Council’s Statement of Accounts provides a true and fair view of its financial position at 31st March, 2013 and its income and expenditure for the year then ended (see page 3 of the report).

These findings demonstrated that the Council had been able to sustain in 2012/13 the high standard of financial reporting that had been achieved in recent years since International Financial Reporting Standards (IFRS) were adopted.

Achieving these excellent outcomes for the Council was testament to the continuing professionalism of all staff engaged in the accounts production process both within Financial Services and other Directorates.

It also reflected the benefit of officers taking a proactive role in identifying potential risks so that a dialogue could take place with the External Auditors at an early stage to discuss and seek agreement on significant/complex accounting issues affecting this year’s accounts.

Representatives from KPMG anticipated issuing an unqualified opinion on the accounts by the 30^th September, 2013 and from the audit identified no audit adjustments.  Work had taken place throughout the year with officers to discuss specific risk areas, which had been addressed appropriately.  

The critical accounting matters related to Digital Region Limited and Mutual Municipal Insurance. KPMG found that the Council had made appropriate provision in the financial statements for both items.

KMPG were satisfied that the internal audit was compliant with the Code of Practice for Internal Audit in Local Government and concluded that the Council had made proper arrangements to secure economy, efficiency and effectiveness in its use of resources.  Nevertheless an inspection by the National Audit Office could not be ruled out.

Discussion ensued on whether the National Audit Office might carry out a review of the Digital Region project and whether the Council had any plans to renegotiate the PFI contracts for schools.  The Committee also received an update on the Iceland Banking situation.

Resolved:-  (1)  That the Auditor’s ISA260 report to those charged with governance attached at Appendix 1 be approved.

(2)  That the Statement of Accounts 2012/13 attached at Appendix 2 be approved.

(3)  That the Letter of Management Representations attached at Appendix 3 be approved.