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 2013/14 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 2013/14.

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, 2014.

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 2013/14.

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 had been agreed with the external auditor and 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 anticipated 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, 2014 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 2013/14 the high standard of financial reporting that had been achieved in recent years since International Financial Reporting Standards (IFRS) were adopted.

This had been supported by the developments that had and were continuing to take place to facilitate financial reporting namely the introduction of a new general leger structure during the course of the year and improvements to year end closure procedures.

It also reflected the benefit of officers working proactively with External Audit from an early stage in the audit to discuss and seek agreement on significant/complex accounting issues and areas of audit focus.

However, since the production of the unaudited financial statements, the publication of the independent report into Child Sexual Exploitation had resulted in an additional contingency note being added to disclose the possible liability that may arise from claims against the Council.

KPMG also informed the Committee that they were at present considering the impact of the independent report on their assessment of whether the Council has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources (the so called Value For Money or VFM conclusion). As a consequence KPMG were unable at this stage to issue their VFM conclusion.

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 2013/14 attached at Appendix 2 be approved.

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