Agenda item

This report provides the Audit & Governance Committee with the outcome and findings of the external audit of the 2016/17 financial statements of S. E. Business Services Ltd, Surrey Choices Ltd and Halsey Garton Ltd.

Declarations of interest:

None

Witnesses:

Ciaran McLaughlin, Grant Thornton

Thomas Slaughter, Grant Thornton

Susan Smyth, Head of Strategic Finance, Surrey County Council

Key points raised during the discussion:

S. E. Business Service LTD.

1.     Representatives from Grant Thornton confirmed that there had been no significant issues found during the Audit. There was one adjustment to the group tax relief claim. The draft accounts had reflected the draft tax position so this had been updated in the final accounts to reflect the final tax position for the year.

2.     The Committee asked for clarification on who directed the outlined companies where it was confirmed that it was senior officers of the County Council. It was noted that the day-to-day operation of each company was the responsibility of the Directors (of each company) and the Shareholder Board was responsible for taking decisions on behalf of the Council that were more strategic in nature.

3.     It was confirmed that S. E. Business Services LTD was 100% owned by Surrey County Council (SCC) therefore all profits went to the Council. 

Surrey Choices

4.     Representatives from Grant Thornton stated that they had previously raised concern over some of the company’s processes but following the recent audit had confirmed they were now satisfied. One audit adjustment had been identified which was regarding the deferred tax charge for the period which affected the reported financial position; discussions were currently being had with management around what adjustment was required. It was noted that this would continue to be monitored and would be followed up on in the New Year.

5.     Members raised concern over the write-off of debt by Surrey Choices that was outlined in the report. Following further discussion it was agreed for the Chairman to meet with the Chairman of the Overview and Budget Scrutiny Committee in order to pass on the concerns of the Committee.

6.     Members queried the reasoning behind setting up the Local Authority Trading Company (LATC) as it meant the Council would be taxed. Officers stated that one of the reasons was to allow for greater use of personal budgets.

7.     On page 83 of the report, Members queried the figure which stated that the average life expectancy assumptions used by the actuaries for males was 67.5 years and 69.6 years for women. It was noted that there had been an error in the disclosure note but that the calculation was correct. 

Halsey Garton LTD

8.     A section of the report was discussed which stated that the company was free to determine when to sell a property asset, therefore it was unlikely that there would be a realised loss since assets would generally only be sold when it was beneficial to do so. When referring to this some Members saw it as unwise to state that it would be unlikely to lead to a loss as it was believed this should not be assumed. Following further discussion officers reaffirmed that it would be very unlikely.

Actions/ further information to be provided:

A1/17 - For the Chairman to speak informally to the Chairman of the Overview and Budget Scrutiny Committee to raise concerns over the debt of Surrey Choices.

Resolved:

The Audit & Governance Committee considered the contents of the 2016/17 Audit

Findings Report for S. E. Business Services Ltd, Surrey Choices Ltd & Halsey Garton

Ltd.