Agenda item

This paper presents the Audit Completion Report from Mazars and communicates their findings for the audit of the year ended 31 March 2016.

Members considered the Audit Completion Report from Mazars which detailed the findings of their audit for the year ended 31 March 2016.  Representatives from Mazars went through the key issues.

Members were informed that a local elector had lodged an objection to the Council’s accounts and that Mazars were currently considering the Council’s response to the issues raised in the objection.   Mazars were intending to give an unqualified opinion on the statement of accounts and a Value For Money (VFM) conclusion on 30 September 2016.  They would not, however, be able to certify completion of the audit until the objection had been determined, this was expected to be by the end of October 2016.

Members’ attention was drawn to section 3 of the Audit Completion Report, which detailed the significant findings.  Members were informed that particular consideration had been given to the management override of controls and also to pension entries.   The external auditors stated that their work had provided the assurance they sought and that there were no matters to bring to Members’ attention.

The external auditors informed Members of a significant matter that had required discussion with management.  This issue related to the revaluation of Council dwellings.  Whilst Mazars had accepted officers’ views on the matter, they had recommended that the Council reviewed its approach to the revaluation of Council dwellings in the years when a full revaluation was not carried out.  Officers had accepted this recommendation.

Members were informed that the recommendation in last year’s Audit Completion Report to resolve historic discrepancies in the Council’s bank reconciliation had been fully implemented and there were no outstanding issues.

Members’ attention was drawn to the Value for Money conclusion detailed in Section 6 of the report.  The external auditors stated that the Council had a good record of budget delivery and had achieved a better than expected outturn for both the General Fund and HRA in 2015/16.  It was noted that ongoing pressures on the public finances meant that the medium term financial position was challenging.

The external auditors explained that the additional detailed probe work had recently been concluded on the following:

·        Overall programme and project management arrangements

·        The Community Stadium Project

·        The Older Persons’ accommodation project

·        Integration of health and social care and the operation of the Better Care Fund

·        The “Future Shape and Size” programme, which considered the Council’s future operating model and how services might be re-shaped to meet the challenges faced by the Council

A separate report, setting out detailed findings and conclusions, would be discussed with officers and presented to the committee but summary conclusions were outlined in the Audit Completion Report and were as follows:

·        Improvements had been made to overall programme and project management arrangements.  It was, however, important that the recommendations arising from the recent review by Veritau were fully implemented.

·        As the procurement in respect of the Community Stadium was not yet completed, there were restrictions as to the information that could be made public because of commercial sensitivities. The external auditors stated that the Council had good arrangements in place, including a well-run procurement process.  It was the external auditors’ view that the Council could have provided more in its reporting, which may have given more assurance, but it was acknowledged that officers had sought legal advice as to what could be disclosed in public.

·        The work undertaken on the older persons’ accommodation programme had comprehensively addressed the issues that had been raised by Mazars previously.

·        As experienced nationally, there were some significant challenges in progressing the integration of health and social care services.  The Council had managed this difficult situation but there continued to be pressures and risks.

·        The Future Shape and Size programme was progressing well.  The external auditors did, however, recommend that milestones be included to show how the Council would move from where it was now to where it aimed to be.

Members requested that they received a copy of the report detailing the findings once this was finalised¹.

Members’ attention was drawn to the tables within the Audit Completion Report which outlined the Value For Money assessment.

The external auditors also drew Members’ attention to the progress made to date in implementing the recommendations arising from the Public Interest Report.  Particular attention was drawn to recommendations 4 and 5 which related to the putting in place of guidance.  The External Auditors stated that they believed this guidance to be important.

The external auditors expressed their appreciation of the support that they had received from the Council’s finance team during the carrying out of the audit.

Members sought clarification as to how the value of the Council’s housing stock was determined.  They were informed that this was a desk top exercise carried out by appropriately qualified professional valuers employed by the Council and who acted in accordance with the relevant guidance. The Finance Team would work with the Property Services team to ensure that the recommendation from the external auditors was taken on board and would be reflected in the next draft accounts.

The external auditors were asked how they were dealing with the valid objection that had been lodged to the accounts.  They stated that they were currently considering the Council’s response to the matter that had been raised and they outlined the options that were open to them.

Members queried the role of the Audit and Governance Committee in monitoring the implementation of the recommendations arising from the Public Interest Report.  It was noted that the Executive were leading on this issue.  Members requested that they be kept updated on progress regarding those recommendations which were still outstanding².

Resolved:  That the matters set out in the Audit Completion Report presented by the external auditor be noted.

Reason:     To ensure the proper consideration of the opinion and conclusions of the external auditor in respect of the annual audit of accounts and review of the council’s arrangements for ensuring value for money.