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 2015/16 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 2015/16.

In relation to the “value for money” conclusion, KPMG had acknowledged that a considerable amount of progress had been achieved during 2015/16 in line with the Corporate Improvement Plan.  However, because further work remained to be done for all the required improvements to be completed and become fully embedded, it had been necessary to issue an adverse opinion in 2015/16 as was the case in 2014/15.

Debra Chamberlain, KPMG, reported that the unaudited Statement of Accounts had now been subject to audit and no audit adjustments had been necessary other than a small number of presentation changes.  All of these changes had been incorporated into the final version of the Statement of Accounts and none affected the financial performance or financial position of the Council previously reported in the unaudited Statement of Accounts.

The Auditor’s ISA 260 report also confirmed that working papers were of a good standard and that audit queries were dealt with efficiently.  In terms of the areas of significant audit risk and areas of audit focus, KPMG had confirmed that no issues had been identified and that reasonable professional judgement had been exercised.  Two recommendations had been made in relation to the accounts production and audit process.

Section 4 of the ISA 260 set out the approach, risks, work and conclusion reached by KPMG on whether the Council had satisfactory arrangements in place to secure the economy, efficiency and effectiveness in the use of its resources.  The conclusion reached was that the Council had not had proper arrangements in place during 2015/16.  However, this was in the context of significant progress having been made in 2015/16 towards delivery of the Corporate Improvement Plan and recognition that the new senior management team were driving through continuing improvement in 2016/17.

Discussion ensued on the report with the following issues raised/highlighted:-

-          There had been a lot of investment into frontline services and support services within Children’s Services but still felt to be gaps

-          A report would be submitted to the Cabinet reviewing the Medium Term Financial Strategy, a significant amount of which would relate to CYPS and what was required for a sustainable position

-          It was not known if a qualified Value for Money statement would be achieved for 2016/17.  The first self-assessment would be submitted shortly and that would be tested through the document and discussions

-          The failure of the restoration of powers to the Council would not necessarily impact upon the view of KPMG: the bigger impact was in relation to the governance arrangements particularly for CYPS

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 2015/16 be approved for publication.

(3)  That KPMG be issued with the Letter of Management Representations.