Agenda and draft minutes

Extraordinary, Audit Committee - Monday, 22nd March, 2021 7.00 pm

Venue: Virtual

Contact: Madeleine Shopland  Democratic & Electoral Services Specialist

Media

Items
No. Item

51.

Apologies

To receive any apologies for absence

Minutes:

There were no apologies for absence.

52.

Declaration of Interest

To receive any declarations of interest

Minutes:

Councillor Imogen Shepherd-DuBey declared a Personal Interest regarding Item 56 Statement of Accounts 2019-20 on the grounds that she had money in the Berkshire Pension Fund.

 

Councillor Daniel Sargeant declared a Personal Interest in Items 55 Wokingham Borough Council Audit Results Report Year ended 31 March 2020 and Item 56 Statement of Accounts 2019-20 on the grounds that he was a Non Executive Director of Wokingham Housing Limited and Berry Brook Homes.

 

53.

Public Question Time

To answer any public questions

 

A period of 30 minutes will be allowed for members of the public to ask questions submitted under notice.

 

The Council welcomes questions from members of the public about the work of this committee.

 

Subject to meeting certain timescales, questions can relate to general issues concerned with the work of the Committee or an item which is on the Agenda for this meeting.  For full details of the procedure for submitting questions please contact the Democratic Services Section on the numbers given below or go to www.wokingham.gov.uk/publicquestions

Minutes:

There were no Public questions.

 

54.

Member Question Time

To answer any member questions

Minutes:

There were no Member questions.

 

55.

Wokingham Borough Council Audit Results Report Year ended 31 March 2020

To receive the Wokingham Borough Council Audit Results Report Year ended 31 March 2020.

Additional documents:

Minutes:

The Committee received the Wokingham Borough Council Audit Result Report Year ended 31 March 2020.

 

During the discussion of this item, the following points were made:

 

·       Helen Thompson, Ernst & Young advised that it was the third version of the report presented to the Committee.  She highlighted the key changes made to the previous version of the report.

·       The detailed testing and detailed work around valuations had been completed.  A summary of the changes made had been included but not the detail of each element of the work because the finance team were still working through the adjustments to the accounts. There was a total adjustment of between £45-50million downward valuation, compared to the previous figures in the Statement of Accounts. The adjustments that needed to be made to the Accounts had been agreed.  However, where adjustments were made, particularly in relation to Property, Plant and Equipment, it impacted a number of different areas of the Accounts, and these values were yet to be fully processed for Ernst & Young to ensure the audit adjustments were correctly processed.  This level of detail would be included in the audit results report in due course.

·       With regards to the pension fund audit assurance, Members were advised that the final letter from the Pension Fund auditor had still not been received.  It was anticipated that this would be received early April.

·       It had been requested that the accounting policies for the subsidiary companies and the Council be aligned.  This was complex and time consuming and would involve prior restatements.  The updated figures were expected shortly and would be checked.

·       The work around going concern needed to be completed.  The conclusion that the Council was a going concern was unlikely to change.

 

RESOLVED:  That the Wokingham Borough Council Audit Results Report Year ended 31 March 2020 be noted.

 

56.

Statement of Accounts 2019-20

To receive the Statement of Accounts 2019-20.

Additional documents:

Minutes:

The Committee received the Statement of Accounts 2019-20.

 

During the discussion of this item, the following points were made:

 

·       The Assistant Director Finance advised that the Accounts were nearly complete, apart from the item around the Pension Fund.  The Deputy Chief Executive had recently met with the Berkshire Treasurers and had been assured that this was forthcoming.  Nevertheless, the numbers from the Pension Fund had come through and had been agreed with Ernst & Young and applied into the accounts.

·       What had been put in the primary statements would be checked to ensure that they had casted through into the notes.

·       There was a difference of opinion with Erst & Young around the valuation of Carnival Pool.  The Council’s valuation had been based upon the capitalisation of the income.  That valuation had come in at nearly £10million.  There had also been valuation based on what was considered to be the market value of the property, which had been slightly under the original valuation based on capitalisation.  A mid point of £9.965milllion had therefore been used.  This was in excess of the valuation from Ernst & Young, which had been based on a South East area as opposed to a specific Wokingham area.

·       No changes were expected to the numbers within the Accounts but there may be changes around the narrative in relation to going concern.  Members were assured that Wokingham Borough Council was in the top 20 for resilience in unitary authorities.

·       Councillor Gee questioned whether the £45-50million had been put through the Accounts yet.  Helen Thompson advised that the adjustment would be made to the Accounts.  How that would be made up had not been included in the audit results report at this stage until the detail had been fully checked.  The Chief Accountant added that in terms of the very specific adjustments they had not been included in the report.  The adjustments agreed with the auditors had been listed.  The asset numbers would be added.

·       Councillor Gee questioned why Ernst & Young had not accepted the valuation of Carnival Pool from the Council.  Helen Thompson explained that Ernst & Young selected a sample of assets and asked their expert valuers to look at them.  The experts would take the information used by the Council’s valuers and look at it at a higher level.  The valuer would provide a reasonable range in which they would expect the valuation to fall.  Eleven assets had been selected for sample and the valuation of one of these, Carnival Pool, had fallen outside the range provided.  There had initially been a wider difference but following discussions this had reduced. 

·       Councillor Gee stated that the councillors had been told that they could rely on the accounts because they had been considered by the external auditors.  She had concerns about the difference in opinion regarding the valuation.  Helen Thompson emphasised that Ernst & Young were content that the Accounts were materially accurate.  The difference in the valuation was below the tolerable error threshold.

·       With regards to the valuation of investment properties,  ...  view the full minutes text for item 56.

57.

Draft Annual Audit Committee Report 2020-21 pdf icon PDF 117 KB

To receive the draft Annual Audit Committee Report 2020-21.

Additional documents:

Minutes:

The Assistant Director Governance presented the draft Annual Audit Committee report 2020-21.

 

RESOLVED:  That

 

1)       the Committee consider the draft Annual Audit Committee report 2020-21 and if they wish to make any changes.

 

2)       the final report be recommend to Council for agreement.