Agenda item

Julian Ricket of PricewaterhouseCoopers introduced a report on the External Audit Reports in relation to the 2012 Annual Audit Letter, Grant Claims: Annual Certification Report and the Report to Management: Interim and Final Audit 2012/13. 

Key points highlighted within the report included:

• Purpose of the Annual Audit Letter and PwC’s responsibility; 
• PwC’s issue of the completion certificate on 25 September 2013, in accordance with the requirements of the Audit Commission Act 1998;
• Audit findings, which included accounting for new academy schools, valuation of property and accounting for the Local Authority Mortgage Scheme (LAMS); 
• Final PwC fees;
• There were no major issues highlighted within grant claims and returns;

• PwC recommendations for prior years management reports had been implemented and there were no issues carried forward;

• Ten new control issues had been highlighted for 2012/13;
• There were no high priority categorisation for Peterborough’s internal controls;

·         The Annual Certification report summarised the work undertaken by PwC on claims and returns for housing council tax benefit, national non domestic rates and teachers pensions agency return;

·         The number of errors identified had been in relation to the teachers’ pension which had been due to the new certification instructions issued quite late in the process; and

·         PwC’s fees in relation to the claims compared the previous year.

Julian Ricket PwC and the Head of Strategic Finance responded to questions and comments raised by Members.  In summary responses included:

• The audit fee of £183k, had included audit work undertaken by PWC on audit of the statement of accounts, conclusion on arrangements for use of resources and certifying claims and returns. The fee had been reduced compared to the 2011/12 charges;
• The summary of ten errors highlighted within the Report to Management although categorised at medium or low, had been highlighted for shared transaction services. It was not unusual for Local Authorities to experience a breakdown in transition;
• PCC had demonstrated good management responses to the issues highlighted and PwC had been reassured by the comments that the actions would be followed up in 2013/14;
• The number of issues highlighted within the external audit report had been inherited issues arising from the outsourced shared transaction services that transferred to Serco;
• Although inherited issues, Serco would be required to demonstrate that they were dealing with the issues highlighted by PwC and provide PCC with assurances that improvements were being implemented;
• Issues that related to the audit data control integrity would be undertaken by PCC’s Audit Team.  A data breach would be reported to the Compliance Team in accordance with the data breach policy, which would also be reviewed by PCC’s Audit Team;
• The Council Tax support issues currently being experienced due to an increase in residents being expected to pay council tax, had overwhelmed the resources teams in terms of dealing with telephone queries.  Going forward, Serco was exploring ways in which to improve customer services in relation to Council Tax support;
• The additional certification fee of £9,960 in 2012/13, had been due to additional testing performed as a result of errors in the initial sample tests conducted by PwC;
• PCC was currently in discussions with Serco in order to recover the additional fees incurred due to errors.  It was envisaged that the fee recovery from Serco would result in the reduction of errors being experienced going forward; and
• The grant funded arrangement for Council Tax had ended in 2013/14, which would also provide a reduction of costs from PwC.

The Committee:

Endorsed the final reports produced by external audit namely:

i)      2012/13 Annual Audit Letter

ii)     Grant Claims; Annual Certification Report; and

iii)    Report to Management: Interim and Final Audit 2012/13.