Agenda item

Report No: PAS/FH/18/025

The Committee received Report No: PAS/FH/18/025,  which presented the results of Ernst and Young’s (EY) audit of the financial statements for 2017-2018. The report set out 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 2017-2018 Statement of Accounts, signed by the Council’s Chief Finance Officer (Section 151 Officer) on 31 May 2018, had been updated to reflect adjustments recommended by EY from their audit work.  It should be noted by Members that these adjustments were all immaterial to the overall financial position of the Council and were in most cases, merely presentational changes.

A copy of the Audit Committee summary was attached at Appendix A, and were presented to the Committee by Mark Hodgson (Associate Partner) and Mark Russell (Manager) from EY.  Also attached at 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 St Edmundsbury Borough Council for the year ended 31 March 2018.

Mr Hodgson confirmed that all work on the audit of the Councils 2017-2018 financial statement had been concluded and no further errors had been identified.  Therefore, EY would be issuing an unqualified opinion on the Financial Statements for 2017-2018 this evening (25 July 2018) prior to the statutory deadline of 31 July 2018, stating the Council had proper arrangements in securing economy, efficiency and effectiveness in its use or resources. 

However, he wished to draw the Committee’s attention to five key areas:

1)   On page 5:  Outstanding audit work had been completed by 16 July 2018, and there were no further issues to report;

2)   Pages 9 to 13 (Significant risk) – Audit risks in audit plan – assurances had been gained, there were no matters to report;

3)   Page 21 (Audit differences) – There had been one adjusted audit error relating to the pension fund and liabilities, which was purely due to timing issues.  There were no unadjusted audit errors to report;

4)   Pages 23 to 25 (Value for Money) – One risk had been identified relating to governance arrangements moving to a single council, however due process had been followed;

5)   Page 24 (Value for Money) – An explanation was provided on the new chart setting out the “assessment of reserves position to 2021”.

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.

Members asked a number of questions in relation to the report, to which Mr Hodgson duly responded. 

In particular the Chairman questioned the Solar Farm audit fee, and asked whether this would be an annual or a one-off fee.  In response Mr Hodgson explained to carry out the audit of the solar farm valuation it needed an expert with specialist knowledge.  EY would also need assurance over energy prices.  Mr Hodgson was hopeful that there would be a reduced audit fee over time.

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, and presenting a positive report.

Councillor Simon Cole moved the recommendation, this was duly seconded by Councillor John Bloodworth, and with the vote being unanimous, it was:

          RESOLVED: That

1)   The unqualified opinion on the Financial Statements for 2017-2018 (as set out in the Audit Results Report – Appendix A) to Report No: PAS/FH/18/025 be noted.

2)   The Value for Money conclusion stating that the Council had proper arrangements to secure 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, attached at Appendix B to Report No: PAS/FH/18/025, be approved before the Audit Director issues his opinion and conclusion.

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