Agenda item

To receive the 2018/19 Audit results report.

The Committee considered the 2018/19 Audit results report.

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

·         Helen Thompson advised Members that the Audit Results report had been produced largely in advance of the Committee’s July meeting.  Since September, Ernst & Young had been seeking an update from the pension fund auditors.  A completed audit opinion had been issued on the Pension Fund on 10 December.  Under the ‘IAS 19 protocol’, the pension fund auditor should carry out a number of procedures to enable the Council’s auditors to issue their own assurance.  The IAS 19 letter had been received on 24 January and the pension fund auditor had not completed all the requested work, stating that some of it had been outside the scope of their audit.  Council officers had requested an updated actuary’s report from the pension fund from which a revised set of statements had been produced.  Ernst & Young had been reviewing the revisions.  Since the IAS 19 letter had been received, discussions had been had regarding how the required assurance could be received, in order to issue an audit opinion.  Assurance had not been received on the value of benefits paid on the Council’s behalf, but the remainder of the audit had been completed.  A further statement of accounts would be produced once the IAS19 work had been fully completed, and any other adjustments made.

·         In response to a Member question, it was confirmed that an adjustment had been made for the McCloud judgement.

·         Councillor Gee asked why there was a need to value the benefits paid to pensions.  Helen Thompson emphasised that the figure sat on the balance sheet.  The pension liabilities for the Council was £291m and £298m for the Group.  She went on to refer to Note 19 of the Statement of Accounts, Defined Benefit Pension Schemes.  In response to a Member question, Helen Thompson confirmed that the way in which the pension fund would be audited had been previously agreed.

·         Councillor Burgess asked about the summary of unadjusted differences.  Helen Thompson indicated that the reference to ‘NNDR appeals provision included in accounts as only 90% of calculated gross provision: as such, this is understated in the CIES by 10%’ - £441k should be removed, as this was no longer a judgemental difference.

·         It was noted that the total value of investments within the Pension Fund had been revised, with the valuation of these assets being reduced by £74.5m in total.  Councillor Gee questioned whether this would increase the amount the Council would pay regarding pension contributions.  It was confirmed that the latest triennial review (December 2019) had included both the asset valuation and the impact of the McCloud settlement in its assessment and this had increased the cost to the Council over the review period.  Budget provision had already been made for this.

·         Councillor Shepherd-DuBey asked whether a change in political leadership and senior management was still considered a value for money risk.  Helen Thompson explained that the value for money arrangements covered 1 April 2018 to 31 March 2019 and that the next year’s report would reflect that the situation had become more settled.

·         With regards to the preparation of the Medium Term Financial Plan (MTFP), Councillor Gee felt that Members not having sufficient time to review the MTFP was a risk.  The Head of Finance indicated that they were published within the access to information deadline and also that parts of the budget had already been taken to Overview and Scrutiny.  Councillor Gee suggested that Members be given more time to review the documents.

·         Councillor Shepherd-DuBey asked about the Audit of Accounts – Notice of Public Rights.  Helen Thompson clarified that members of the public had had the appropriate time to review the accounts; however, the exact timeframe had been incorrect.  The deadlines set through the Audit and Accounts Regulations had changed over the last couple of years, and this had not been picked up.

·         In response to a Member question, the Head of Finance indicated that officers tried to make the accounts process as smooth as possible.  Councillor Gee asked whether officers could look at the date for the closure and publication of the accounts.  The Assistant Director Governance suggested that the Committee could respond to the consultation on the Government’s independent review (the ‘Redmond review’) on the accounts deadlines when it was issued.

RESOLVED:  That the 2018/19 Audit results report be noted.