Agenda item

The purpose of this report is to inform the Committee of the result of the external audit of the council’s 2012/13 Statement of Accounts, to receive the external auditor’s Audit Findings Report and to approve the council’s letter of representation from the Chief Finance Officer & Deputy Director for Business Services.

Declarations of Interest:

None.

Witnesses:

Kevin Kilburn, Deputy Chief Finance Officer

Sheila Little, Chief Finance Officer

Nikki O’Connor, Finance Manager (Assets, Investment and Accounting)

Andy Mack, Engagement Lead (Grant Thornton)

Kathryn Sharp, Audit Manager (Grant Thornton)

Key Points Raised During the Discussion:

1.    The Chairman pointed out that the draft accounts had been thoroughly reviewed at the previous Audit & Governance Committee meeting and that this meeting should focus on any changes and the external audit opinion.

2.    The Finance Manager (Assets, Investment and Accounting) introduced the report and highlighted key changes.  She informed the Committee that the draft Statement of Accounts had been ready and submitted for audit before the end of May.  The audit had been substantially complete by the end of July.  Due to this, a provisional high level timetable for 2013/14 had been agreed which would allow an audited report to come to Committee before the end of July 2014.  Following the audit, six recommendations were made.  A number of amendments were made to the draft accounts which do not alter the Council’s budget outturn position.  It was also pointed out that external audit’s final opinion would be issued after a small number of items are signed off by the auditors.  Confirmation from one bank of the year-end investment was awaited but the Finance Manager (Assets, Investment and Accounting) was not concerned that there was a problem.  With regard to the testing of the Whole of Government Accounts (WGA) and Teachers’ Pensions Returns, these were due to be completed next week.  The Finance Manager explained that the Treasury had issued its WGA guidance very late and that this had caused delays across all local authorities.

3.    The Chairman queried whether the addition of a post balance sheet event to Note 6 affected the budget for 2013/14.  The Finance Manager (Assets, Investment and Accounting) explained that an adjustment for the Council’s estimated share of liabilities in relation to refunds of business rates to ratepayers who have successfully appealed against the rateable value of their properties had already been incorporated into the 2013/14 budget.  The Deputy Chief Finance Officer confirmed that there were potential liabilities which would be reviewed when setting the 2014/15 budget but that they did not affect the budget for 2013/14.

4.    The Finance Manager (Assets, Investment and Accounting) confirmed that all the points raised about the draft Statement of Accounts at the previous meeting of the Audit & Governance Committee had been incorporated in the final papers.

5.    The Chief Finance Officer explained to the Committee that the Government was consulting on two options for the new homes bonus.  She was working with colleagues to draft a response.  While responses to technical consultations do not normally go to Cabinet for approval, the Leader had requested a paper to go to Cabinet collating draft and final responses to ongoing consultations.

6.    The Engagement Lead (Grant Thornton) introduced the external audit findings.  He thanked the Council officers for their support and informed the Committee that the Statement of Accounts were good and were underpinned by a good set of working papers and strong process.  He confirmed that there was a good range of skills in the Council’s Finance Team and that the new timetable for 2013/14 for realistic and credible.  The Engagement Lead (Grant Thornton) confirmed that the planned audit fee, which included a 40% reduction on previous years, was achieved and no increase in the planned fees was necessary.  

7.    The Audit Manager (Grant Thornton) informed the Committee that Treasury Guidance had now been received on the Whole of Government Accounts.  Testing of the Whole of Government Accounts and Teachers’ Pensions Returns would be completed soon and then the final audit opinion would be issued.

8.    The Chief Finance Officer highlighted the contributions of the whole Finance Team in getting the accounts completed to a high quality and within such a fast timescale.

9.    The Chairman queried whether all the petty cash balances were necessary.  The Finance Manager (Assets, Investment and Accounting) responded that accounts were reconciled on a quarterly basis.  At the end of the year, a signed certification of the balance is required.  The team who has responsibility for collating certifications changed this year so there have been some delays in receiving all account certifications.  Seven of the 121 petty cash accounts certifications were outstanding as at the time of the committee meeting.

10.  The Chairman questioned the disclosure of Anchor’s ability to exploit some of the capacity of care homes as a deferred income liability.  The Finance Manager (Assets, Investment and Accounting) assured the Committee that the disclosure was correctly stated.

11.  The Chairman congratulated officers for a joined up approach and audit.

The Committee considered the recommendations for item 7 after consideration of item 8 ‘Surrey Pension Fund Local Government Pension Scheme Accounts 2012/13 and Grant Thornton Audit Findings for Surrey Pension Fund Report’.

Actions/Further Information to be Provided:

None

Next Steps:

The Audit & Governance Committee to approve the audited 2013/14 Statement of Accounts in July 2014.