Agenda item

To inform the Committee of the result of the external audit of the council’s 2014/15 Statement of Accounts, to receive the external auditor’s Audit Findings Report and to approve the council’s letter of representation from the Director of Finance. 

Declarations of interest:

None

Witnesses:

Kevin Kilburn, Deputy Chief Finance Officer

Jonathan Evans, Principal Accountant – Financial Accounting

Andy Mack, Engagement Lead (Grant Thornton)

Kathryn Sharp, Senior Manager (Grant Thornton)

Thomas Ball, Manager (Grant Thornton)

Matt Dean, Audit Manager (Grant Thornton)

Key points raised during the discussion:

1.    The Principal Accountant introduced the report and highlighted the amendments made to the Accounts since the draft accounts were produced and presented to external audit in May 2015.  These related to a collection fund adjustment and schools accounting.

2.    It was confirmed that delays to collection fund figures being provided to the county council were due to just three borough/district councils: Mole Valley District Council, Reigate and Banstead Borough Council, and Surrey Heath Borough Council.  Officers confirmed that they had informed accounting staff in the borough and district councils of the relevant deadlines and had agreed a later deadline in response to requests by the councils.  The issue of deadlines was also raised at the Surrey Treasurers meeting.  It was suggested and agreed that the Chairman should write to the Leader and Chief Executive, copying in the Audit Committee Chairman, of each of the three local authorities, stressing the importance of meeting the deadlines on provision collection fund figures (Recommendations tracker ref: A28/15). 

3.    The committee was informed that officers were seeking legal advice with regard to accounting for foundation schools.  Grant Thornton representatives confirmed that they were comfortable with how the Council had dealt with this issue.  They would be surprised if the legal advice went against the Council’s interpretation.  Resolution was being pursued as high priority as there could be implications for budget planning and the council tax precept for 2016/17.

4.    Regarding the Value for Money opinion, the Chairman queried the meaning of the qualification on an ‘except for’ basis.  The Engagement Lead for Grant Thornton explained that the audit had to pay regard to the Ofsted review.  The opinion is likely to be that the council has put in place proper arrangements for securing economy, efficiency and effectiveness ‘except for’ this one area.  However, the findings were now being dealt with.  Members queried why audit processes hadn’t picked up the issues in Children’s Service.  The Chief Internal Auditor highlighted that the Children’s Safeguarding Quality Assurance Process audit had found that significant improvement was needed.  She also informed the committee that Internal Audit was involved in quality assurance during the improvement programme for Children’s Service.

5.    The Principal Accountant introduced a schedule of changes, addressing amendments requested by external audit.  This is attached as Annex B to the Minutes.

6.    The Engagement Lead for Grant Thornton expressed thanks to the officer team from Finance for their support during the audit of the council’s accounts.  He highlighted the short timescale within which the accounts have been completed and pointed out that, as in two years the statutory deadline for publication of the audited accounts would be July, the council may wish to consider how it can further shorten the timescales to stay ahead of the competition.  The Chairman responded that speed should not compromise the information included in the accounts. 

Action/Further information to note:

The Chairman to write to the Leader and Chief Executive, copying in the Audit Committee Chairman, of each of the three local authorities, stressing the importance of meeting the deadlines on provision of collection fund figures.

RESOLVED:

That the Committee:

      i.        APPROVES the 2014/15 Statement of Accounts for publication on the council’s website and in a limited number of hard copies;

     ii.        NOTES the contents of the 2014/15 Audit Findings Report;

    iii.        AGREES the officer response to recommendations of the external auditor;

   iv.        NOTES the Director of Finance’s letter of representation; and

    v.        Agrees not to refer any issues in the Audit Findings Report to Cabinet.

Committee next steps:

None.