Issue - meetings

This report provides the Audit & Governance Committee with the outcome and findings of the external audit of the 2014/15 financial statements of S. E. Business Services Ltd.

Declarations of interest:

None.

Witnesses:

Thomas Ball, Manager – Grant Thornton

Nicola O’Connor, Finance Manager (Assets & Accounting)

David John, Audit Performance Manager

Key points raised during the discussion:

1.    The representative of Grant Thornton introduced the Audit Findings Report and suggested that overall it was a good outcome for SE Business Services Ltd.

2.    Members thanked Grant Thornton for bringing the issue of the unsigned contract to their attention and queried Grant Thornton’s views on carrying on business with an unsigned contract.  The Grant Thornton Manager stressed that First Community Health and Care was paying the fees in accordance with the draft contract.  With regard to audit, the unsigned contract did not have a big impact although it had been raised as a control point.  If it is not dealt with by the end of December it becomes a bigger problem. 

In response to a further query about risk, the Grant Thornton Manager agreed that in theory the unsigned contract was a risk as SE Business Services Ltd may not be paid in accordance with the draft contract.  However, SE Business Services Ltd had made a risk-based decision to continue.  As part of the audit, Grant Thornton had checked that SE Business Services Ltd was being paid in accordance with the draft contract.  Correspondence was also noted which showed this issue being followed up. 

In response to a question on why the contract remained unsigned, the Grant Thornton Manager assured the committee that SE Business Services Ltd had done everything it could to resolve the issue.  Members queried whether Grant Thornton’s relaxed attitude could lead to them being held responsible if the unsigned contract does lead to a problem.  It was clarified that Grant Thornton had raised this as a point in its Audit Findings Report and would follow up with the management at South East Business Services Ltd.  The responsibility to resolve the situation lies with them.

The Finance Manager (Assets & Accounting) assured the committee that this was a one off situation and a measured commercial risk was being taken to act on an unsigned contract.  To date, there had been no problems and the contract should be signed soon.

The Audit Performance Manager suggested that contracts should be signed as best practice as otherwise it can lead to uncertainty.  However, legal advice had allowed for tacit acceptance of contractual requirements. 

The Chairman proposed writing to the Director of Legal and Democratic Services to query the legal view on unsigned contracts.  This was agreed (Recommendations Tracker ref: A40/15).

Action/Further information to note:

Chairman to write to the Director of Legal and Democratic Services to query the legal view on unsigned contracts. 

RESOLVED:

That the committee NOTES the contents of the 2014/15 Audit Findings Report for SE Business Services Ltd.