Agenda item

The Committee received a report stating that in accordance with International Standard on Auditing (ISA) 260, the Council’s external auditor was required to issue a report detailing the findings from the 2017/18 audit and the key issues that the Committee should consider before the external auditor issues their opinion on the financial statements. It was advised that the ISA 260 report attached at Appendix A of the report had to be considered by ‘those charged with governance before the external auditor can sign the accounts which legally has to be done by 31st July, 2018.

It was reported that the external auditor expects to issue an unqualified audit opinion on the Council’s financial statements for 2017/18; subject to all outstanding queries being resolved to their satisfaction. KPMG also expected to issue an unqualified Value For Money (VfM) conclusion for 2017/18.

Members were advised that overall the ISA 260 report was an extremely positive one, with two adjusted audit differences. The report also detailed that overall good quality working papers with a clear audit trail were provided and generally responses to audit queries were provided timely.

It was further reported that the Chief Financial Officer & Assistant Director of Finance, as the responsible financial officer, re-confirmed on behalf of the Council that he was satisfied that the statement of accounts presented a true and fair view of the financial position of the Council at the end of the 2017/18 financial year and the Council’s income and expenditure for the 2017/18 financial year.

Following the introduction of the report, members made a number of comments as follows:-

With regard to the valuation of assets such as buildings, the Vice-Chair, Councillor R.A Jones asked why there was a need to have valuations every year. It was advised that it was a professional duty for KPMG to ensure that the materiality was accurate. If for any reason an adjustment was required there would need to be evidence provided. In reference to buildings, the Chair recognised that KPMG used square meterage. However what data base was used and were regional differences included. It was advised that regional variances were used and data provided from the estates department and the use of google sites were obtained to ensure the data provided was accurate.

Following on from the comments above, Councillor Mark Houlbrook asked whether the Council used one insurance company to insure its assets as there could be advantages gained for using one insurance company as a long term policy. Members were advised that the Council do use one insurance company for their assets and it was noted that a lot of work was carried out a few years ago on a re-tendering exercise. Committee were assured that officers revisit insurance policies annually and extension clauses were assessable which had saved quite a considerable amount of money in the past.

Kathryn Smart sought an explanation with regard to the recommendation at page 22 of the Appendix 1 “Universal Housing Password Controls”and why this had not been picked up. It was advised that St Leger Homes had tested the service, however not to the extent that should have been undertaken. It was also stated that whilst other controls were in place to highlight these issues, the comments would be taken on board and a suitable way of updating members on progress in implementing these recommendations would be found

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Kathryn Smart also queried the deadline date of the 31^st January, 2019 for” Link Asset Services Contract’ being some way off and the reasoning behind this. Officers advised that at present this issue was at an impasse regarding the form of contract to be adopted with neither party willing to adopt the others form of contract which was why the issue was taking longer to conclude. Officers also advised that when the Council go out to tender again, a different process would be followed to avoid this situation.

The Vice-Chair, Councillor R A Jones asked whether this service was available within a framework. It was reported that this was specific treasury management advice and the company were not likely to walk away from the contract. It was further noted this issue wasn’t considered as a high risk and there were limited players for this service within the market. Councillor Jones asked whether there was more the Council could do to engage with the market for this service. It was advised that the company in question were considered to be a good firm supplying treasury management servicesacross a number of authorities and were considered to be good value for money.

In conclusion, KPMG stressed that they would be providing a clear opinion in relation to resources and were comfortable on the delivery for value for money (vfm)

The team wished to thank Clare Partridge and all officers at KPMG  for their continued support. These comments were echoed by all members of the Committee.

            RESOLVED that:-

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

(2)        the Letter of Representation be endorsed; and

(3)        the Statement of Accounts 2017/18 be approved.