Agenda and draft minutes

Audit Committee
Monday, 29 July 2019 7.00pm

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

Contact: Michael Turner, Democratic Services Officer 

Items
No. Item

192.

Election of Chairman

Minutes:

In the absence of the Chairman, the Committee agreed to elect Councillor Gulvin as Chairman for this meeting.

193.

Apologies for absence

Minutes:

Apologies for absence were received from Councillors Hackwell and Tranter. 

194.

Record of meeting pdf icon PDF 298 KB

To approve the record of the meeting held on 27 June 2019.

Minutes:

The record of the meeting of the Committee held on 27 June 2019 was agreed and signed by the Chairman as correct.

195.

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:

Under section 100B of the Local Government Act 1972, the Chairman agreed that the report at agenda item 5 (Audit Findings Report 2018/19 and Statement of Accounts 2918/19) should be considered at this meeting as a matter of urgency because the next meeting of this Committee will not take place until 26 September 2019 and the issues raised within the Council’s External Auditor’s Audit Completion report, must, in accordance with the Accounts and Audit Regulations 2015, be considered by this Committee prior to publication of the Statement of Accounts by 31 July 2019. The report was not available in time for despatch with the main agenda as the Auditors needed additional time to complete their work.

                                                                           

 

196.

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

 

Councillor Gulvin disclosed that he was a Director of Medway Development Company.

 

Councillor Tejan disclosed that he had a registered business at the Innovation Centre.

197.

Audit Findings Report 2018/19 and Statement of Accounts 2018/19 pdf icon PDF 210 KB

This report considers the issues raised in the Council’s External Auditor’s Audit Findings Report, which incorporates the findings following the 2018/19 audit of the Statement of Accounts.

 

The Accounts and Audit Regulations 2015 require that the Audit Committee consider these issues prior to approval of the Statement of Accounts.

 

This item has been circulated separately to the main agenda. The Chairman of the Committee is of the opinion that it should be considered at this meeting as a matter of urgency as permitted under section 100B of the Local Government Act 1972 because the next meeting of this Committee would not take place until 26 September 2019 and the issues raised within the Council’s External Auditor’s Audit Completion report, must, in accordance with the Accounts and Audit Regulations 2015, be considered by this Committee prior to publication of the Statement of Accounts by 31 July 2019. The report was not available in time for despatch with the main agenda as the Auditors needed additional time to complete their work.

Additional documents:

Minutes:

Discussion:

 

Audit Regulations 2015 required that the Audit Committee consider these issues prior to approval of the Statement of Accounts.

 

Members also considered an addendum report which detailed amendments

to the Statement of Accounts.

 

The following issues were discussed:

 

Digital Transformation Programme  - noting the difference of opinion between the Council and Grant Thornton on whether the cost of the digital transformation Programme should be funded from revenue expenditure funded from Capital under Statute rather than recorded in the relevant service revenue line in the Comprehensive Income and Expenditure Statement, a Member asked Grant Thornton if this difference was significant. Grant Thornton replied that they were not questioning that the expenditure had occurred but rather how it should be accounted for and did not see this as a material issue.

 

Prior year recommendations – a Member referred to a number of recommendations from the previous year’s action plan which had not yet been completed and asked if Grant Thornton had any concerns about that. Grant Thornton commented that this was not unusual but would depend on the nature of the recommendation. Overall Grant Thornton considered a good level of progress had been made by the Council.                     

 

Review of financial instruments note, Capital expenditure and financing, accounting disclosures, REFCUS, LOBOS and NDR appeals provision – in response to a query about how these reviews were progressing, Grant Thornton advised that they were in the process of completing them and, to date, nothing had emerged which was likely to have an impact on the accounts.

 

Internal controls – a Member queried whether officers had been given too much authority in relation to large capital projects. Grant Thornton commented that they had not seen anything that indicated that was the case.

 

Journals – in response to a query about journals, Grant Thornton advised that these could be automatic or manual and were a mechanism to add information into the accounting system. Due to the very large number of journals a risk assessment approach had been adopted whereby a selection of journals which looked unusual were tested. No significant issues had been found from these tests. The Head of Financial Strategy added that a new system of electronic journal processing and approval would be tested soon and was due to be implemented in the later half of 2019 and would address the type of control failures identified by Grant Thornton.

           

Parking services overspend – in response to a query how this had arisen, the Chief Finance Officer advised that this was an under recovery of income rather than an overspend. Parking charges had been increased but the income targets set had not been achieved. Some Members argued a more realistic target should be set and the Chief Finance Officer replied that this would be considered as part of the Medium Term Financial Strategy (MTFS). In terms of why the targets had not been achieved, the Committee was advised that it had largely been due to behavioural changes, exemplified by fewer people parking in  ...  view the full minutes text for item 197.