Agenda item

This report considers the issues raised in the Council’s External Auditor’s Annual Governance Report, which incorporates the findings following the 2013/2014 audit of the Statement of Accounts. 

Discussion:

The Chief Finance Officer advised the Committee that the draft Statement of Accounts for 2013/2014, that had been approved by the Audit Committee on 17 July 2014, had been revised and circulated as Supplementary Agenda No 1 with the changes highlighted in yellow. A number of revisions had subsequently been made by the External Auditor which were highlighted in green in Supplementary Agenda No 2 that was tabled at the meeting. The Committee were assured however that these revisions had not affected the bottom line figures as set out in the draft statement of accounts.

Robert Grant and Kerry Barnes from BDO, the Council’s External Auditor, provided an overview of the External Auditor's report. This included the key findings from the audit of the accounts set out in detail at Appendix 1 to the report.

The External Auditor confirmed that many of the changes were relatively minor and that none of the changes had required adjustment of the bottom line figures as set out in the draft statement of accounts.

The External Auditor advised that Medway Council could rely on the work of Council’s internal audit team. The External Auditor confirmed that the Annual Governance Statement was presented in accordance with the CIPFA/SOLACE standards. The External Auditor advised that their examination of value for money had shown that the Council had adequately addressed reductions in spending and taken into account budget and service pressures. They had concluded that governance was strong with appropriate financial controls in place.

The External Auditor and officers responded to Members’ questions on the accounts, as amended. This included: noting new initiatives such as Medway Norse; amending the wording that related to the Health and Wellbeing Board, (as the Board as it was not responsible for the Children’s Services Plan,); and discussions regarding the use of non-clearing banks and instant access accounts.

Members noted that the draft statement of accounts agreed by Audit Committee on 17 July, had been presented to the External Auditor after the end of June deadline, and were advised that this would be noted by the Audit Commission. It was emphasised that it was important that the accounts were published by 30 September to ensure compliance with regulations. The Committee stressed the need for a quick turn-around of the final changes needed by the External Auditor to ensure the accounts were published on time.

Members recognised that on-going financial pressures will impact upon the ability of the Council to deliver continued service improvements, and that, despite a lower starting base than last year, the Council was in a relatively good place, as supported by the report of the external auditors.

Members thanked the External Auditor and Medway Council staff involved in the production of the accounts and stressed that the transfer of corporate knowledge, in relation to the compilation of the accounts, addressed future staff changes.

The Committee noted that the auditor was satisfied with the Annual Governance Statement and would be issuing an ‘unqualified’ opinion on the accounts and value for money conclusion.

Decision:

The Audit Committee:

(a)       noted the issues raised and judgements made by the External Auditor as presented in Appendix 1, and agreed the proposed response as set out at Appendix IV to the External Auditor’s Annual Governance Report.

(b)             agreed the revised Statement of Accounts as set out in Supplementary Agendas No 1 and No 2.

(c)             agreed the Management Representations Letter, attached at Appendix VI of the Annual Governance Report.