Agenda item

The Head of Finance presented this report on the proposed timetable for the completion of the external audit of both the 2017/18 and 2018/19 financial statements, which included the background to the current position. It was noted that:

·         The 2015/16 accounts were submitted on time, but were prepared by one officer who then left the Council, before the audit was completed.

·         The 2016/17 accounts were prepared by two contractors, who had left the authority by the time of the external audit.

·         The 2017/18 accounts were also prepared by contractors, before issues with the 2016/17 accounts had been resolved.

·         In early 2018 it was decided that the 2017/18 accounts should be drawn up again, with proper working papers.

·         Work on the 2017/18 was sporadic due to resource issues from both the Council and the external auditors.

Collection Fund and Asset Register

The Head of Finance explained that the last known correct figures for the Collection Fund were for the 2014/15 financial year, necessitating several months of work to prepare the correct figures for 2017/18. The data used for compiling the asset register proved to be unreliable as issues with the 2016/17 accounts had not been resolved. The register was redone and this part of the 2017/18 accounts now balanced.

Signing off 2017/18 accounts before working on 2018/19 accounts

The Head of Finance explained that a large amount of extra work had been generated by starting work on the 2017/18 accounts before issues identified with the 2016/17 accounts had been resolved. He explained that it was imperative that the 2017/18 accounts were agreed, before work on the 2018/19 accounts commenced and this might mean a short pause, whilst external audit examined the 2017/18 accounts. It was understood that preparatory work on the 2018/19 accounts was already being carried out. It was noted that Internal Audit would review the 2018/19 accounts before external audit.

Background to the current position

Councillor John Williams, the Lead Cabinet Member for Finance, stated that the current administration had inherited an unsatisfactory situation from their predecessors. The true picture had only become apparent following advice from a mentor and the work of newly appointed officers to the Council. It had taken the new administration 18 months, but the situation was now being rectified. Councillor John Williams expressed the view that the previous Portfolio Holder for Finance should have known that there was an issue with the 2017/18 accounts and acted accordingly. Councillor Heather Williams stated that she had raised issues with the accounts over a year ago and that it was not appropriate to bring party politics into the work of this Committee. She added that issues had been raised in February 2019 and no adequate response had been given by the current administration. Councillor Peter Topping stated that the issues with the 2017/18 accounts stretched across the two administrations. He pointed out that the Task and Finish Group set up to oversee the signing off of the accounts had only met once in May.

External auditors

Members of the Committee expressed disappointment at the fact that no representatives from external audit were present at the meeting. It was noted that the external auditors had been appointed for the authorities in the Eastern region by Public Sector Audit Appointments (PSAA), who had been appointed by the Local Government Association(LGA). The Council had the option of appointing its own auditor, but at the time the authority had decided to use the regional choice, as it represented best value for money and had already been selected by the LGA. It was understood that both Cambridgeshire County Council and the Peterborough and Cambridgeshire Combined authority were dissatisfied with their current providers. It was suggested that the Council should consider appointing a different external auditor. It was noted that there was a national shortage in accountants and auditors who had experience of working in local government.

Meetings of the Committee during 2018/19

The Chairman apologised for the fact that the Committee had not met for six months between September 2018 and March 2019, but he had been convinced to postpone the planned meeting until the accounts were ready to be signed off.

Recruitment in Accountancy

Councillor John Williams explained that a shared Accountancy service with Cambridge City Council had not been in the best interests of this authority, so the administration had decided not to pursue a shared service arrangement with Cambridge City Council.

The Head of Finance explained that the Council had appointed a number of qualified accountants, who have since gained experience of working in local government. Training was being offered to other staff, including the AAT qualification. He was confident that both the 2017/18 accounts and 2018/19 accounts would be signed off by the end of the year.

Honest reporting

The Head of Finance was thanked for his honest and comprehensive report. Councillor Brian Milnes stated that in his view, previous reports to the Committee had been too optimistic and had not fully described the difficulties the Council faced with the recruiting of staff and managing the process of getting the accounts signed off. Councillor Heather Williams suggested that the Committee should be concentrating more on the future than making political points regarding the past. Councillors Eileen Wilson stated it was necessary to examine the past to inform the future. Both councillors expressed an interest in sitting on the Task and Finish Group.

Recommendations

Councillor Peter Topping suggested that the Committee be provided with details of the necessary work required in closing the accounts, with every factor given a Red, Amber or Green (RAG) rating, with an explanatory commentary. Councillor Heather Williams suggested that the Task and Finish Group meet monthly.

The Chairman stated that the aim was to get the 2017/18 and 2018/19 accounts signed off by the end of the year.

The Committee AGREED to

A)        Hold monthly meetings of the Audit of Accounts Task and Finish Group.

B)        Instruct the Group to identify the work that needs to be done to ensure that the 2017/18 and 2018/19 accounts are signed off by the end of the year.

C)        To instruct the Group to report back to the Committee with any concerns regarding this deadline.