Agenda item

The Committee received a report on the Statement of Accounts and Annual Governance Statement 2018/19 – ISA 260 Report to those charged with Governance.

It was reported that in accordance with Internal Standard on Auditing (ISA) 260, the Council’s external auditor was required to issue a report detailing the findings from the 2018/19 audit and the key issues that the Committee should consider before the external auditor issues their opinion on the financial statements. A copy of the ISA report was attached at Appendix A to the, report; this had to be considered by Committee before the external auditor signs the accounts which legally had to be done by 31st July.

The External Auditor (Grant Thornton) provided Members with their findings which were contained within pages 75-109 of the report. Members were advised that they were expected to issue an unqualified audit opinion on the Council’s financial statements for 2018/19; subject to all outstanding queries being resolved to their satisfaction and an unqualified Value for Money (VfM) conclusion for 2018/19.

It was noted that overall, the ISA 260 report was a positive one, with five adjusted misstatements.

In response to a query raised on the red indicators shown on pages 10 and 11 of the document, it was reported that all arrangements were now in place and amendments had been identified and addressed to a satisfactory position.

The Chair asked whether a further final report would be forwarded for signing off. It was advised that this was not the intension and whilst there was an issue being worked upon with regard to South Yorkshire Pensions, it was the intension for the Statement of Accounts to be signed off today. However, if there were any changes, these would be discussed with the Chair.

In relation to a number of queries raised by Councillor David Nevett, Officers provided the following details:-

·         With regard to the £5.7m undercharged depreciation for Schools and Children’s Centres, it was advised that schools were valued as at 1^st April 2018 and then again as at 31 March 2019. No depreciation had been charged on these assets for 2018/19 and the net cost of services was consequently understated. This error has been identified and the accounts have been amended.

·         In relation to the peppercorn rent for the CAST theatre. It was reported that the Theatre should have been properly valued on a leasehold basis in 2013, at which time, the impairment resulting in the downward revaluation should have been recorded in the 2013/14 financial statements. A prior Period Adjustment was required impacting on the Authoritys opening balances. Again the error has been recognised and the accounts have been amended.

·         With regard to Council Dwellings, these were valued as of the 1st April, 2018. Further correspondence with the District Valuer indicated that the Beacon Values had increased between 0% to 2%. The Council agreed that the midpoint 1% increase was appropriate and the accounts have been amended to reflect this change.

·         In relation to austerity, the Director of Corporate Resources gave a brief update to members stating that the graphs provided within the report showed a strong position. As part of the Medium Term Financial Strategy (MTFS) proposals were already being worked upon and it was intended that these would be considered at Cabinet on 1 October 2019. She indicated at present there was no clear understanding with regard to future settlement funding available, so the Council needs to prepare for every eventuality. As stated earlier, it was the intention for this to go out for consultation in October and it was envisaged that settlement information would be known in December. She stressed that the Council needed to continue to be as lean as possible whilst providing good services at a lower cost. There was also a need to improve services and processes even when austerity was over and continue to be adaptable to what resources are available.

·         With regard to the audit adjustments highlighted at page 100 of the report, it was noted that these were all now completed.

In addition, it was reported that the Council was also required to prepare, approve and publish an Annual Governance Statement (AGS) in accordance with the Accounts and Audit Regulations and professional accounting practice. Since the draft AGS presented to Committee in April, there had been no further significant issues identified and the current issues contained within the AGS had been reviewed and reflected the latest position.

            RESOLVED that:-

(1)        the contents of the external audit ISA 260 report be noted;

(2)        the contents of the letter of representation be endorsed;

(3)        the Statement of Accounts 2018/19 be approved; and

(4)        the Annual Governance Statement 2018/19 be approved.