Agenda item

To receive the final Statement of Accounts for the year ended 31 March 2014 incorporating the Annual Governance Statement together with the annual report to those charged with governance following their scrutiny by External Audit

The Executive Director of Finance introduced a report to Audit Committee Members, which had detailed the external audit outcome of PricewaterhouseCoopers (PWC) statement of accounts for 2013/14.  The Executive Director of Finance also advised the Committee that there were a number of recent changes requested by PwC. The details of the changes were circulated at the meeting and have been attached at appendix one of these minutes. 

The key points within the report included:

• Technical issues raised around the assets and valuation;
• Issue with the County Council’s provision of a valuation of a fund, which was inaccurate and would be taken forward by PCC;
• Council Tax Benefit reform outcome had been positive; and
• In terms of the Local Authority Mortgage Scheme, there had been difference of opinion between PCC and PwC on the accounting treatment, however, PwC was not minded to challenge that treatment.

Julian Rickett from PwC, the Council’s External Auditor, also highlighted key points to the Committee, which included:

·   Executive summary;

·   Audit approach;

·   Thanks relayed to Officers for co-operation throughout the process;

·   Significant audit and accounting matters;

·   Accounting issues;

·   Misstatements and significant audit adjustments;

·   Related parties;

·   Internal Controls;

·   Risk of Fraud;

·   Fees Update; and

·   Management Representation Letter.

         The Executive Director of Finance, Head of Strategic Finance and PwC responded to      comments and questions.  In summary responses included:

·         There had been no plans for the Council owned Children’s Centres, which were currently not in use;

·         The conclusion on the ‘Authority’s arrangements for resources’ had related to a final piece of quality review, which would be undertaken until signed off;

·         Reassessment of the risks had been due to changes arising from the Audit Commission and had affected all Authorities;

·         The difference in opinion with regards to the valuation methods undertaken for Council assets had been between PwC and Wilks Head and Eve (WHE). The Council would not instruct its valuers over which methodology to adopt, unless a specific issue had arose;

·         PwC were content with WHE’s valuation undertaken of the Council’s assets; the issue had been over the methodology used for the valuation of land. The difference of opinion raised, had not created a significant issue over the truth and fairness of the accounts;

·         There had always been an element of judgement applied for the valuation of assets; 

·         A reference to land in the accounts referred to a school in Hampton where the Council owned the building but not the land.  The situation was rare and not common practice;

·         The Council’s use of PwC was due to end in 2015/16.  There would be a two year rotation cycle applied before the Council was permitted to commission the services of PwC.  Prior to this, the Audit Commission normally requested that the lead Partner was rotated. The Council was in a position to challenge the Audit Commission and request that the lead Partner remained for a further year if desired;

·         The most efficient position would be to retain the PwC lead Partner for a further financial year;

      The Committee

1.    Received and approved the report to those charged with governance (ISA260) 2013/14 Audit from PricewaterhouseCoopers (PwC, the Council’s external auditors; and

2.    Received and approved the audited Statement of Accounts 2013/14.

      The Committee also agreed that:

1.    Councillor Murphy would provide the Head of Strategic Finance and the Cabinet Member for Resources, with details of the requests made to officers in relation to the future of the Children’s Sure Start Centres; and

2.    The Head of Strategic Finance would provide a briefing note to Members of the Audit Committee regarding Children’s ‘Sure Start’ Centres following further clarification from Councillor Murphy.