Agenda item

To inform the Committee of the result of the external audit of the Council’s 2017/18 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. 

Annex B to follow.

Will Forster left the meeting at 11:28am

Witnesses:

Nicola O’Connor, Finance Manager

David John, Audit Manager

Russell Banks, Chief Internal Auditor

Marcus Ward, Grant Thornton

Ciaran McLaughlin, Grant Thornton

Key points raised during the discussion:

1.     The Finance Manager introduced the report and highlighted that Members had previously attended a briefing session on the Surrey County Council (SCC) Accounts. Members noted that there had been changes to Annex A following the publication of the agenda. These were as follows:

·        Page 44 onwards – ‘Notes to the Accounts’ was replaced with ‘Notes to the Financial Statement’

·        Page 125 – ‘Firefighters’ Pension Scheme’ was replaced with ‘Firefighters’ Pension Scheme Financial Statement’.

·        Page 69 – Note 7 – highlighted that the Section 151 Officer had been replaced with an Interim Section 151 Officer.

2.     Annex B was published in a supplementary agenda on 23 July 2018. An amended Annex C was tabled at the meeting and is attached to these minutes as Appendix A.

3.     Members sought clarification on why the Value for Money (VFM) Conclusion had not yet been submitted. Representatives from Grant Thornton explained that work was delayed as SCC had separately requested the Chartered Institute of Public Finance and Accountancy (CIPFA) to carry out a review of the Council’s financial resilience that would have had considerable overlap with Grant Thornton’s work. It was then understood that the review was unlikely to overlap and that work would have to continue as previously planned. Due to this Grant Thornton was not in a position to issue the VFM conclusion on time. It was confirmed that the VFM conclusion would be issued in the coming weeks.

4.     Members requested that the recent CIPFA review be circulated to Committee Members once available.

5.     Members discussed the various figures in the Comprehensive Income & Expenditure Statement where it was requested that officers circulate an analytical review for more information.

6.     Members requested clarification on why income in relation to Place, Development & Waste had decreased, particularly as Community Recycling Centres (CRCs) had started charging some fees. Officers agreed to provide a response outside the meeting.  

7.     In the narrative report to the statement of accounts it was noted that it was estimated that over 23,000 children in Surrey are living in poverty. Some Members felt this could be further clarified to give better understanding around the definition of poverty. Officers noted Members comments and agreed to pass them on to the Communications Team.

8.     Officers highlighted that the Council continued to use short-term borrowing to cover short-term cash flow requirements, rather than borrowing long term.

9.     Members noted that the service had resolved an outstanding issue o in the firefighters’ pensions fund relating to injury awards.

10.  Members requested a clear copy of the 2017/18 Council income and expenditure graph on page 33 of the agenda. It was also asked if Members could receive a similar graph for the 2018/19 figures.

11.  Representatives from Grant Thornton provided a short summary of audit findings report. It was highlighted that they anticipated issuing an unqualified opinion on the accounts, following outstanding queries being resolved as outlined on page 3 of the supplementary agenda.

Actions/ further information to be provided:

1.     A10/18 - Members requested that the recent CIPFA review be circulated to Committee Members once available – Chief Audit Manager

2.     A11/18 - For officers to circulate an analytical review of the Comprehensive Income & Expenditure Statement.

3.     A12/18 - For officers to provide clarification on why the income in relation to Place, Development & Waste had decreased, given that the recycling centres had started charging fees.

4.     A13/18 - Members requested a clear copy of the 2017/18 Council income and expenditure graph and a similar graph for the 2018/19 figures.

Resolved:

Subject to the revisions/corrections agreed at the meeting, the Audit and Governance Committee:

1.          Approved the 2017/18 Statement of Accounts, as attached in Annex A, for publication on the Council’s website and in a limited number of hard copies;

2.          Considered the contents of the 2017/18 Audit Findings Report in Annex B;

3.          Agreed the officer response to recommendations of the external auditor;

4.          Noted the amended Director of Finance’s letter of representation, which was tabled at the meeting as Annex C;

5.          Determined that no issues in the Audit Findings Report needed to be referred to the Cabinet.

6.          Noted the revised Annual Governance Statement, as approved by Cabinet on 17 July 2018.