Agenda item

Report No: PAS/FH/17/024

The Committee received Report No: PAS/FH/17/024, which presented the results of Ernst and Young’s (EY) audit of the financial statements for 2016-2017.

The report set out those issues they were formally required to report on to those charged with governance. 

The report also included the results of the work that EY had undertaken to assess the Council’s arrangements to secure value for money in the use of its resources.

The Council’s unaudited 2016-2017 statement of accounts, signed by the Council’s Chief Finance Officer (Section 151 Officer) on 30 June 2017, had been updated to reflect adjustments recommended by EY from their audit work.  Members were advised that the adjustments were all immaterial to the overall financial position of the Council and were in most cases merely presentational changes.

There had been one unadjusted item that had been highlighted in the Annual Results Report relating to the retention of monies held as a result of the acquisition of Greenheath Energy Limited.  The sum of £75,000 was immaterial to the overall financial position of the Council and had been corrected in the current financial year 2017-2018.

A copy of the Audit Committee summary was attached at Appendix A, and were presented to the Committee by Mark Hodgson (Executive Director) and Mark Russell (Assistant Manager) from EY.  Also attached as Appendix B to the report was a Letter of Representation, on behalf of the Council in accordance with the audit of the financial statement for Forest Heath District Council for the year ended 31 March 2017. 

Mr Hodgson confirmed that all work on the audit of the Councils 2016-2017 financial statements had been concluded and no further errors had been identified.  Therefore, EY would be issuing an unqualified opinion on the Financial Statements for 2016-2017 this evening (21 September 2017) prior to the statutory deadline of 30 September 2017 stating the Council had proper arrangements in securing economy, efficiency and effectiveness in its use of resources.  He wished to thank the Assistant Director (Resources and Performance) and her team who had been helpful and instrumental in making this a very smooth audit for EY.

However, he wished to draw the Committee’s attention to a couple of key areas:

1)   It had been a good audit with few issues;

2)   On page 5: EY would be working towards a £0.702m materiality;

3)   On pages 12 – 13: One significant issue had been identified relating the acquisition of the Solar Farm.  It had been agreed that the £75,000 unadjusted error would not be adjusted and had been included in the letter of representation attached at Appendix B to the report.

4)   Audit Issues: there had been no other unadjusted errors to report.

5)   Only the standard representations had been requested, which included one specific minor exemption for Greenheath Energy Limited.

6)   Section 5 (Value for Money): One significant VFM risk related to the purchase of Greenheath Energy Limited.  However, EY had gained comfort from the acquisition and the that the Council had taken appropriate advice at all stages.

7)   Audit Fee: Additional audit costs had been incurred in respect of audit assurance work on the purchase of Greenheath Energy Limited, which had been agreed with the Assistant Director (Resources and Performance).

Following the presentation discussions were held on Solar Farm and it was noted the Council’s project value of £14.15m sat within a reasonable range (£14.02 to £15.28m).

The Chairman, on behalf of the Committee wished to thank the Assistant Director (Resources and Performance) and the Finance Team for their outstanding work and also wished to thank EY for their audit work.

The Portfolio Holder for Resources and Performance also wished to thank EY and the finance team for their outstanding work.

Councillor Chris Barker moved the recommendation, this was duly seconded by Councillor Christine Mason and with the vote being unanimous, it was:

          RESOLVED: That

1)       The unqualified opinion on the Financial Statements for 2016-2017 (as set out in the Audit Results Report – Appendix A), issued by the Auditor be noted.

2)       The Value for Money conclusion stating that the Council had proper arrangements in securing economy, efficiency and effectiveness in its use of resources (Appendix A) issued by the Auditor be noted.

3)       The Letter of Representation on behalf of the Council (Appendix B) be approved before the Audit Director (EY) issues his opinion and conclusion.

4)       The Chief Finance Officer, in consultation with the Chairman of the Performance and Audit Scrutiny Committee be given delegated authority to conclude the signing of the accounts.