Agenda item

To receive the External Audit Finding Report from Grant Thornton [to follow] and for Members to raise any relevant questions and observations they may have.

Recommendation

It is recommended that the Audit Committee endorses the External Audit Findings Report.

Sophia Brown, Grant Thornton Engagement Manager, presented the 2016/17 Audit Findings Report to the Committee. She explained that since its publication, some of the areas shown as outstanding in the report had now been completed; these included work on plant, property and equipment; and work on financial instruments. The key messages of the report were that the draft financial statements had been prepared to a very high standard and that a minimal level of issues had been identified. Sophia added that Waverley was well placed to meet the earlier statutory accounts deadlines from next year.

It was queried whether from next year some areas would be able to remain outstanding as they did in this report. Sophia Brown clarified that this would be acceptable at this stage next year, as there were certain pieces of work that could only be completed at the end of the process. Iain Murray, Grant Thornton Engagement Lead, added that the County Council had been signing off their accounts at the end of July for the last two years, so there were no problems anticipated in respect of linking up with the County.

The Committee was informed that the Grant certification work on the Council’s Housing Benefit subsidy on behalf of the DWP would be completed by the end of November and that time had been allocated in October to undertake this. Iain Murray added that Grant certification work had not been included within the recent procurement process for the Council’s auditors and therefore this would need to be undertaken separately.

There had been no significant issues identified in regard to the risks as set out in the report, additionally Sophia Brown updated the Committee that there were no significant issues identified in relation to valuation of plant, property and equipment; or valuation of pension fund net liability as this work was shown as still outstanding at the time of producing the report.

One internal control issue had been identified regarding to related party transactions. At the time of drafting the report, eight declarations from councillors had been outstanding, however they had since all been received. Sophia Brown explained that this was still an issue as they should have been received before the financial statements were drafted, however, now that all declarations been received, there was no longer a need to include a specific reference to this in the letter of representation. Graeme Clark added that there had been a change to the way the information had been collected this year, using an online survey method. The response to this had been very good overall however inevitably there were some members who needed to be reminded. An ideal opportunity would have been to remind councillors at the April Council meeting, and this would be done in future years. It was also agreed that next year Graeme Clark and Cllr Gray would write a joint email to all councillors emphasising the importance of completing the declaration promptly.

The report set out the impact of one uncorrected misstatement from the prior year. This had been in relation to assets that had been incorrectly included in the Housing Revenue Account asset register. Cllr Holder queried how the new properties at Ockford Ridge were being recorded on the asset register. Graeme Clark explained that these were considered ‘assets under construction’ and he confirmed that any demolished properties had been removed from the register. Graeme added that the housing accountant worked very closely with the development team to ensure that everything was correctly recorded at year end.

In regard to Value for Money, two key risks had been set out in the audit plan, and the key findings in relation to these were set out in the report. The overall conclusion was that the council had proper consideration for Value for Money.

In conclusion, Graeme Clark stated that working to the new timetable had been a challenge, but that the Council had maintained a good relationship with the external auditors and he was pleased with the overall outcome. Iain Murray added that the accounts were of a high quality, and he had no concerns going forward. He complimented the Council on its ability to present the accounts in a clear and reader-friendly manner, which was particularly challenging given the frequently changing requirements for disclosure.

The Committee RESOLVED that the External Audit Findings Report be endorsed.