Agenda item

The External Auditor to present a report summarising the results of the 2017/18 audit of the financial statements.

Steve Clarke, External Auditor

(a)  presented a report (copies of which had previously been circulated to Members) summarising the results of the 2017/18 audit of the financial statements;

(b)  highlighted

                      i.        audit of the Council’s financial statements was undertaken in accordance with the audit planning report (submitted to a meeting of this Committee on 6 February 2018), with  the exception of changes in materiality.  The planning report stated that the audit procedures would be performed using a materiality of £0.605m.  External Audit updated their planning materiality assessment using the draft financial statements and also reconsidered its risk assessment.  Based on its materiality measure of gross expenditure on provision of services, External Audit had updated its overall materiality assessment to £0.571m.  This resulted in updated performance materiality at 75% of overall materiality of £0.428m and an updated threshold for reporting misstatements of £0.029m.

                    ii.        subject to satisfactory completion of outstanding matters (eg submission of the whole of government account assurance statement), External Audit anticipated issuing an unqualified opinion on the Council’s financial statements.  It was noted that matters such as concluding the pension disclosures and final review of the Narrative Report and financial statements had been completed.

                   iii.        External Audit identified one unadjusted audit difference in the draft financial statements, relating to the valuation of the investments held within the Pension Fund.  Senior Management had chosen not to adjust the understatement of £0.147m, in relation to the pension scheme asset valuation used by the scheme actuary.  External Audit agreed that the impact was not material.

                   iv.        External Audit identified audit differences, which had been adjusted by Senior Management.  These were either classification errors or disclosure matters and had no impact on the overall reported financial position.

                    v.        External Audit’s planning report had identified key areas of focus for the audit of the Council’s financial statements.  Observations and conclusions on these matters were included within the report before Members.  There were no matters other than those reported by Senior Management or disclosed in the report to be brought to the attention of this Committee.

                   vi.        Some deficiencies in internal control had been identified, relating to

·         key contracts not included on the Contracts Register.  The Council would perform a refresh of the Contracts Register and would ensure it remained accurate

·         calculation of the bad debt provision.  The Council had updated the bad debt provision calculation for business rates and council tax.  The process for calculating the bad debts on other debts was being reviewed as well.

                  vii.        External Audit had identified one significant value for money risk over sustainable resource deployment and were comfortable with how the Council proposed to deal with this;

(c)  confirmed that there were no matters to report on the Council’s arrangements to secure economy, efficiency and effectiveness in its use of resources;

The Chair thanked Mr. Clarke for the work undertaken by External Audit and noted the findings in relation to the review of key contracts, highlighting that the Council would take action on this and Members would receive further information at the next agenda item. 

RESOLVED that the report be noted.