Agenda item

The Council will receive a presentation from the External Auditor on the External Annual Governance Report.

Ms A Warner, representing KPMG, the Authority’s External Auditor, made her final presentation on the External Annual Governance Report 2017/18 as it was noted that KPMG would no longer be the Council’s Auditors from 2018/19.

Ms Warner outlined the roles and responsibilities of the External Auditor with specific reference to the work undertaken in relation to the Financial Statements, Use of Resources and Whole of Government Accounts.

The following points were noted:

·         An unqualified opinion was to be given on the Financial Statements, on the Use of Resources and the Whole of Government Accounts

·         The Accounts and Working Papers had been produced to a high standard and the Local Authority Finance Team had dealt with the audit queries efficiently and professionally

·         The following risks had been identified for 2017/18 all of which had been mitigated

o   The Valuation of the Local Government Pension Scheme pension assets and liabilities

o   The Valuation of Property, Plant and Equipment

·         One Value for Money Risk had been identified in relation to the Delivery of Budgets but this risk and also been mitigated

·         In relation to Audit Adjustments:

o   The following had been identified as part of the External Audit work all of which had been adjusted in the final version of the accounts:

§  An amendment to accounting treatment of early payment of pension deficit

§  Minor presentational adjustments in relation to notes to the accounts

o   There was one unadjusted audit difference identified in relation to the increase in valuation of pension assets arising from applying more timely assumptions for the return on investment.  The External Auditor had not required an adjustment in relation to this balance and this related largely to the timing of the accounts which had been reduced by two months compared to previous years

·         Three recommendations had been raised in the year:

o   To improve SAP IT controls

o   To ensure robust governance controls were in place in relation to the Glassworks project and to ensure that these were maintained

o   To ensure the receipt of related party declaration forms from all Councillors

·         The Annual Governance Statement complied with CIPFA guidance and was consistent with other information the Council published

Councillor Richardson (Chair of Audit), Councillor Gardiner (Cabinet Spokesperson for Core Services and Councillor Sir Steve Houghton CBE (Leader of the Council) all asked to place on record their thanks and appreciation for the work of the External Auditors and for the way in which the audit had been conducted both this year and in the 6 years previously.  They also recorded their thanks for the work of the Service Director Finance, for staff within the Finance Directorate and within Internal Audit, for SMT and all other staff who had contributed to the Annual Governance Report and ensuring that the Council received an unqualified opinion.  It was pleasing to note that the Authority was managing its finances correctly.