Agenda and draft minutes

Audit Committee- Statement of Accounts, Audit Committee
Tuesday, 17th September 2019 6.00 pm

Venue: Committee Room 2, City Hall. View directions

Contact: Alison Hewson  (01522) 873370 Email: alison.hewson@lincoln.gov.uk

Items
No. Item

17.

Confirmation of Minutes - 18 July 2019 pdf icon PDF 98 KB

Minutes:

RESOLVED that the minutes of the meeting held on 18 July 2019 be confirmed.

18.

Declarations of Interest

Please note that, in accordance with the Members' Code of Conduct, when declaring interests members must disclose the existence and nature of the interest, and whether it is a disclosable pecuniary interest (DPI) or personal and/or pecuniary.

Minutes:

No declarations of interest were received.

19.

External Audit: Audit Completion Report pdf icon PDF 75 KB

Additional documents:

Minutes:

The Council’s external auditors presented the audit completion report which summarised the findings from the 2018/19 audit.

 

The external auditor’s work on the financial statements was substantially complete and, subject to satisfactory conclusion of any outstanding work, they would propose issuing an unqualified audit opinion by 30 September 2019. As part of the audit, the internal controls in place relevant to the preparation of the financial statements had been considered, with three recommendations resulting from this work made as follows:

 

·         production of draft accounts and working papers;

·         incomplete disclosures for pension fund plan assets;

·         investment property valuations.

 

Further details of these recommendations were outlined in section 4 of the external auditors’ report at Appendix A.

 

In relation to misstatements in the accounts, there were a number of misstatements identified that were above the threshold level of £53,000, all of which were adjusted for as part of the audit process and had been reflected in the Statement of Accounts. Other thresholds for specific areas were highlighted in the report. Further details of these misstatements were provided in section 5 of the auditors’ report at Appendix A. It was reported that there were no unadjusted misstatements.

 

The Statement of Accounts included on the agenda for this meeting at item 20 reflected a fully amended version of the document.

 

It was reported that the Council’s arrangements for securing economy, efficiency and effectiveness in its use of resources were adequate. The external auditors therefore proposed issuing an unqualified opinion on the Council’s value for money arrangements.

 

As part of presenting this item, the external auditors took the Committee through each page of the report and highlighted any key issues, particularly with regard to:

 

·         the audit approach;

·         significant findings;

·         internal control recommendations;

·         summary of misstatements;

·         value for money conclusion.

 

Councillor Tom Dyer made the point that the external auditor’s report was two months late and therefore took the opportunity, on behalf of the Committee, to thank the City Council’s staff who had worked overtime to ensure that everything could be submitted on time.

 

With regard to the recommendation regarding investment property valuations, Councillor Dyer asked whether this would create a cost implication for the Council. It was noted that this work would not incur additional cost, but it would incur additional officer time, however, the Property Team had been reviewing in-year valuations already and this should not create an additional burden on the team.

 

Councillor Jackie Kirk sought some clarity as to the language used in the report, particularly under the production of draft accounts and working papers under section 4 of the report, which stated that ‘although the team managed to prepare a complete set of financial statements by the statutory deadline, which were received on 31 May 2019, these were of a standard that fell below our expectations’. She requested an explanation as to the words ‘fell below our expectations’.

 

The external auditors explained that the draft accounts received were below the standard that was expected and gave a number of examples such  ...  view the full minutes text for item 19.

20.

Statement of Accounts 2018/19 pdf icon PDF 143 KB

Additional documents:

Minutes:

The Council’s Chief Finance Officer:

 

(a)       presented the Statement of Accounts for the financial year ended 31 March 2019.

 

(b)       reported that the Statement of Accounts for 2018/19 provided a comprehensive picture of the Council’s financial circumstances and were compiled to demonstrate probity and stewardship of public funds.

 

(c)        reported that the Council was statutorily required to publish its Statement of Accounts for 2018/19 with an audit opinion and certificate by no later than 31 July 2019.

 

(d)       reported that, following updated information on pension judgements, changes had been made to the Statement of Accounts to adjust for the impact of the amended Actuary report. The impact of these judgements to the Council was £621,000 in relation to the McCloud judgement and £294,000 for the GMP equalisations changes.

 

(e)       reported that the Council must make the Statement of Accounts available for public inspection for 30 working days. Following notification from the Council’s external auditors, this ran from 3 June 2019 until 11 July 2019 and the external auditor was available to answer questions during this period. It was reported that no questions had been asked.

 

(f)        reported that the Council was required to provide a documented annual review of the effectiveness of its governance arrangements which sat alongside the Statement of Accounts, known as the Annual Governance Statement. The overall level of assurance provided in 2018/19 was substantial and was in line with the Council’s Code of Corporate Governance. It was noted, however, that IT Disaster Recovery had been defined as a significant issue which would be the focus of 2019/20 and regularly reported by management to the Audit Committee.

 

(g)       presented the following aspects of the Statement of Accounts:

 

·         the Comprehensive Income and Expenditure Statement;

·         the Balance Sheet;

·         general balances;

·         earmarked reserves;

·         liquidity;

·         debtors;

·         creditors;

·         non-current assets;

·         pensions;

·         officer remuneration;

·         borrowing;

·         investments.

 

(h)       invited members’ questions and comments.

 

It was RESOLVED that the Statement of Accounts be recommended to Council for approval, with any further changes to the Statement of Accounts arising from the conclusion of the external audit being delegated to the Chief Finance Officer who will report any such changes to the Chair of the Audit Committee.