Agenda item

Final Accounts Update 2017/18 - Ernst & Young's Report (Report to Follow)

To consider the report (to follow) of the external auditors on the audit of the 2017/18 financial statements.

Minutes:

Suresh Patel presented this report, which summarised external audit’s preliminary audit conclusion in relation to the audit of the Council for 2017/18. He introduced Mark Russell, who had been an audit manager of the Council’s accounts since 2019 and was helping to complete the audit.

 

Executive summary

Suresh Patel reported that the external auditors had issued a qualified value for money conclusion on finance reporting and for the third consecutive year the Council had been unable to publish its accounts according to its timetable. There was no evidence of any deliberate errors, but one mistake in relation to NNDR income totalled approximately £3.5m. The report included recommendations for improvements and the Head of Finance explained that he would liaise with the external auditors on how to improve the whole process. Mark Russell added that a planning meeting would take place to discuss how the 2018/19 accounts would be audited.

 

Audit fee

Suresh Patel stated that the external auditors would be charging an extra £140,000 for the additional work carried out on this audit and this claim would be supported with detailed evidence. Members of the Committee and the Lead Cabinet Member for Finance were opposed to this level of increase, as the external auditors had been partly responsible for the delays and the extra work this incurred. Suresh Patel explained that these accounts were the most difficult he had encountered in 25 years and the charge was a fair reflection of the additional work involved. The Head of Finance explained that the Council’s contract was with the Public Sector Audit Appointments (PSAA) and any dispute regarding fees would have to be resolved by them.

 

It was noted that the annual fee of £52,000 would be reduced by 20% for the 2018/19 accounts.

 

Letter of representation

The Head of Finance agreed to get legal advice on possible amendments to the letter of representation.

 

Future accounts

Suresh Patel agreed to amend his comments on the risk relating to the signing off of the 2019/20 accounts, which related to timings and not processes. It was noted that the 2018/19 accounts would have to be signed off in the new year before the 2019/20 accounts could be finalised.

 

Final testing

Suresh Patel explained that the final testing was being carried out that morning. An error had been discovered on the creditors account, but this was not material. He predicted that the external auditors would be able to sign off the accounts in early January, following a thorough check.

 

It was suggested that this report should come back to the Committee, after external audit had approved the Accounts. However, this was countered with the view that providing there were no significant changes, the Committee should give delegated authority to the Chairman to sign-off the accounts. The Head of Finance explained that any adjustment to the 2017/18 accounts at this stage was historic and he recommended that the Committee agree the accounts. He added that for understandable reasons these accounts were being more thoroughly audited than any other accounts he had known.

 

A vote was taken and with 5 votes in favour and 1 against, the Committee

 

AGREED        to instruct the Chairman to sign-off the approved accounts, providing no material changes were necessary.

 

Councillor Mark Howell asked that his vote against be recorded.

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