Agenda item

External Audit Report, Letter of Representation and Statement of Accounts

1.   That the Audit and Governance Committee consider the findings,

recommendations and responses in the external auditor’s report ‘Audit

Results Report – ISA (UK and Ireland) 260 for the year ended 31 March

2020’.

 

2.   That the Audit and Governance Committee reviews the proposed ‘Letter of

Representation’, endorses the content and recommends approval by the

Council’s statutory officers.

 

3.   That the Audit and Governance Committee note the draft audited

‘Statement of Accounts’ and recommends its formal adoption.

Minutes:

The Committee considered a report on the External Audit Report, Letter of Representation and Statement of Accounts 2019/20.

 

The Head of Finance, in presenting the report, stated that the reporting deadline for the accounts had been revised and extended to November, due to the pandemic.   He reported that Ernst and Young’s work is substantially complete and they anticipated  providing an unqualified audit opinion on the Statement of Accounts, and an unqualified Value for Money conclusion.  The audit work identified two valuations of Council property that the auditors considered to be overstated and these were detailed in paragraph 3.2.3 of the report. It was noted that the accounts for the property at Bromyard Road had not been adjusted and this has been noted in the audit report as an unadjusted difference.

 

Mr Hassan Rohimun, representing Ernst & Young LLP, External Auditors, presented the External Audit Report to the Committee, Appendix 1 of the agenda item. The report covers the key issues arising from the Audit of the Statement of Accounts and the Value for Money conclusion. Mr Rohimun presented the report in sections identifying the key aspects and allowing members the opportunity to ask questions on each section.

 

Mr Rohimun proceeded to present the rest of the report and appendices and responded to Members questions accordingly, in particular the following sections of the report:

 

·         Section 8 – Data Analytics – use of graphs for improvement measures and time management, how can these be followed up in the future.  The Corporate Director – Finance and Resources agreed to work with the External Auditors to see how the findings can be explored.  A meeting to be arranged by the External Auditor with the Corporate Director – Finance and Resources.

·         Section 9 – Independence – an explanation of the Redman Review was requested (which was highlighted in Appendix C).  The External Auditor stated that the impact of the Redman Review would need a separate meeting as there were a number of recommendations made and suggested a sperate meeting to present this to Members.  The Chairman asked that this be presented by the External Auditors at a future meeting. 

 

The Head of Finance presented the Letter of Representation, Appendix 2. Members had no comments on the letter and agreed the letter would be signed in good faith.

 

The Head of Finance presented the Statements of Accounts 2019/20, Appendix 3 and responded to questions from Members.

 

In response to a query on employee benefits expenses, the Head of Finance agreed to provide a breakdown of the figures for 2018/19 and 2019/20 to explain the increase in the figures and circulate to the Committee.  He did state however that the increases were probably due to services now provided by the Council which were previously provided by a third party.

 

Reference was made to the pensions fund and climate change and the impact the McCloud judgement will have on an increase in pension liabilities.  In response the Corporate Director – Finance stated that he was conscious of the impact of global climate on investments and has taken into account the potential impact of the McCloud judgement in the forthcoming budgets.  He informed Members that regular updates are received on the County Pension Fund and how they are responding to climate change and would provide information at a future Committee meeting.

 

RESOLVED: That the Committee:

 

1.  note the findings, recommendations and responses in the external auditor’s report ‘Audit Results Report – ISA (UK and Ireland) 260 for the year ended 31 March 2020’.

 

2.   reviews the proposed ‘Letter of Representation’ and endorses the content and recommends approval by the Council’s statutory officers.

3.   note the draft audited ‘Statement of Accounts’ and recommends its formal adoption.

 

Supporting documents: