Agenda item

To receive the 2019/20 Annual Audit Letter.

The Committee received the 2019/20 Annual Audit Letter.

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

·       The 2019/20 Annual Audit Letter summarised the outcome of audit work during that period.

·       An unqualified Audit Opinion and Value for Money conclusion had been issued.  The Audit had been certified as completed on 6 August.

·       Helen Thompson thanked Council Officers for their support in completing the audit.

·       A summary of findings against each of the risks had been included within the report.

·       The material downward adjustment to the Property, Plant and Equipment assets was highlighted.  This had arisen as a result of a number of factors.  The additional work required to gain assurance regarding the IF19 Pension liability, and the additional work required regarding the Group Accounting disclosures, was also highlighted.

·       The fee had been drafted and would be discussed with management.  The Committee would be updated in due course.

·       Councillor Gee sought clarification on the 5.25% net return on the investment properties.  Helen Thompson agreed to feed back to the Committee.

·       Councillor Gee questioned whether the two recommendations relating to the Audit Committee were being carried out.  The Assistant Director Governance referred to the review of the Audit Committee’s effectiveness.

·       Councillor Sargeant commented that there were a lot of recommendations from EY within the Audit Letter.  He questioned how the Committee could be assured that the recommendations were being given to the appropriate officers for consideration.  The Assistant Director Governance commented that he and the Assistant Director Finance undertook this.  However, additional assurance could be provided to the Committee on progress made against EY’s recommendations.

·       In response to a question from Councillor Shepherd-DuBey regarding the Revenue Expenditure Funded from Capital Under Statute (REFCUS) and Peach Place, Helen Thompson stated that the way in which it had been treated under the REFCUS criteria was initially incorrect.  It had been amended and reclassified in a revenue grant.

·       Councillor Shepherd-DuBey sought clarification regarding the £1.3million of Capital Receipts.  Helen Thompson explained that it had been questioned because of the way in which the Council had addressed the flexible use of capital receipts.  Legislation required that a strategy be approved in advance.  The Council had documented this through inclusion in the Medium Term Financial Plan, however there had not been a specific formal approval mechanism in place.  This had been addressed retrospectively in the Capital Strategy.  The issue identified was related to process.

·       Councillor Shepherd-DuBey noted that some of the land and buildings had not been revalued as of 31 March 2020 and questioned when this would be carried out.  She was informed that the Council’s policy was to revalue assets on a 5 year cyclical basis, which was in accordance with CIPFA Policy. 

·       Work was being undertaken regarding the alignment of the accounting polices between the Council and subsidiaries.

·       In response to a question regarding the Community Investment Group the Assistant Director Finance commented that the Public Works Loan Board guidance about what could be borrowed, had changed.  As such the focus of the group had changed to a more community-based investment criteria.  The Group’s terms of reference had been revised and would be considered by the Executive in future.

·       In response to a question from Councillor Loyes regarding residual risk, the Assistant Director Governance responded that whilst the Council was on an upwards trajectory with regards to how it managed risk, there were some helpful further suggestions from EY.  A more detailed Corporate Risk Register would be presented to the Committee’s November meeting.

·       Councillor Ross asked about the inspection period for members of the public to consider the draft statement of accounts, and how this was advertised.

RESOLVED:  That the 2019/20 Annual Audit Letter be noted.