Agenda and minutes

Audit Committee
Monday, 30 July 2018 7.00pm

Venue: Meeting Room 9 - Level 3, Gun Wharf, Dock Road, Chatham ME4 4TR. View directions

Contact: Michael Turner, Democratic Services Officer 

Items
No. Item

207.

Apologies for absence

Minutes:

An apology for absence was received from Councillor Tejan. 

208.

Record of meeting pdf icon PDF 87 KB

To approve the record of the meeting held on 27 June 2018.

Minutes:

The record of the meeting of the Committee held on 27 June 2018 was agreed and signed by the Chairman as correct. 

209.

Urgent matters by reason of special circumstances

The Chairman will announce any late items which do not appear on the main agenda but which he/she has agreed should be considered by reason of special circumstances to be specified in the report.

Minutes:

There were none. 

210.

Disclosable Pecuniary Interests and Other Significant Interests pdf icon PDF 211 KB

Members are invited to disclose any Disclosable Pecuniary Interests or Other Significant Interests in accordance with the Member Code of Conduct.  Guidance on this is set out in agenda item 4.

 

Minutes:

Disclosable pecuniary interests

 

There were none.

 

Other significant interests (OSIs)

 

There were none.

 

Other interests

 

There were none.

 

211.

Audit Completion Report 2017/18 Statement of Accounts 2017/18 pdf icon PDF 97 KB

This report considers the issues raised in the Council’s External Auditor’s Annual Governance Report, which incorporates the findings following the 2017/18 audit of the Statement of Accounts. 

Additional documents:

Minutes:

Discussion:

 

Members considered a report detailing the issues raised in the Council’s External Auditor’s Audit Completion Report, which incorporated the findings following the 2017/18 audit of the Statement of Accounts. Members also considered an addendum report detailing amendments to the Statement of Accounts as well as a paper tabled at the meeting setting out further amendments.

 

As this would be the last year BDO would be auditing the Council’s accounts under the current contract, Members and Officers thanked David Eagles and his team for their support and advice over recent years.

 

BDO explained the key audit findings, as set out in the report, and advised that most of the outstanding matters had been resolved and they anticipated issuing an unmodified opinion on the accounts, adding that the confirmation letter from Barclays Bank had not yet been received.

 

Members discussed the following issues:

 

Disclosure of Exit Packages - a Member noted that the exit packages disclosure note had not been prepared in line with the Code requirements and asked if the Council was comfortable with the current position and whether the issue raised by BDO was unique to Medway. BDO advised that the issue was about in which financial year the disclosures should be made. The Chief Finance Officer commented that once an agreement had been reached about an employee leaving the organisation, then provision was made in the accounts for that even if the payment was to be made in the following financial year. He was therefore confident that the financial information was reported correctly. The Chief Finance Officer confirmed that all exit packages were included in the accounts.

 

S106 developer contributions -BDO had concluded that Section 106 developer contributions should be recognised on receipt but accepted it was a subjective judgement as to when to recognise grants as income. The Chief Finance Officer clarified that the Council’s position was to recognise these contributions once they were used due to the risk, however small, that the contribution may have to be returned to the developer. This difference of opinion was not uncommon across councils. The Council’s position had been strengthened by recent decisions by the Planning Committee to tighten the timescales and conditions for S106 contributions

 

Related party transactions - a Member referred to the finding that there was a risk some related party transactions may not be disclosed in the accounts as a result of Member declarations of interests not being received. Officers assured Members that the issue was not due to Members not having disclosed interests on time but a matter of internal communications.

 

Reserves – noting that reserves had reduced by one third over the last two years, some Members queried what BDO considered to be an acceptable level of reserves and at what level reserves had to reduce to for this to be a concern for BDO. BDO advised that the level of reserves was a matter for each Council having regard to local circumstances and risks and there was no set figure/percentage for an  ...  view the full minutes text for item 211.

212.

External Audit Grant Claim Report pdf icon PDF 143 KB

This report and appendix presents the work carried out by BDO, the Council’s external auditor, in respect of the certification of grant claims for the financial year ended 31 March 2017. The report is presented to the Audit Committee to comply with governance requirements.

 

Additional documents:

Minutes:

Discussion:

 

Members considered a report which presented the work carried out by BDO, the Council’s external auditor, in respect of the certification of grant claims for the financial year ended 31 March 2017.

 

BDO advised that a report would be submitted to the Committee later in the year on the certification of benefits claims for 2017/18.

 

Decision:

 

The Committee agreed to note the external auditor’s grant claims and returns certification report for 2016/2017, as set out at Appendix 1 to the report.