Venue: Virtual Meeting Microsoft Teams
Contact: Matthew Nundy Email: Matthew.firstname.lastname@example.org
Cllr A Davison substituted for Cllr T Gosling
Cllr D Wells filled the vacancy at this meeting.
Declarations of Disclosable Pecuniary Interests and Personal or Personal and Prejudicial Interests (if any).
Member Councillor Wells
Minute Number 601
Nature of Interest Family member was a service user
Resolved – That the minutes of the proceedings of this committee held on 16 September 2020, having been printed and circulated amongst the members, be taken as read and correctly recorded and signed by the Vice-Chairman.
The Director: Governance and Partnerships submitted a report that informed the committee of the key issues arising from the council’s counter fraud work.
The committee was informed that the council’s framework to combat fraud, corruption and misappropriation was approved by the Audit Committee in April 2018. The framework followed national guidance as laid out in the document ‘Fighting Fraud and Corruption Locally - The local government counter fraud and corruption strategy 2016-2019’, published by the Chartered Institute of Public Finance and Accountancy (CIPFA) Counter Fraud Centre. It was based upon three key principles:
Ø Acknowledging and understanding fraud risks
Ø Preventing and detecting fraud
Ø Pursue - Being stronger in punishing fraud and recovering losses.
The Director highlighted the work carried out in each of these areas to demonstrate the council’s continuing commitment to minimise the risk of fraud. Attached to the report as an appendix was a fraud six-month progress report.
Following the verbal presentation, the Director responded to members questions.
Resolved - That the counter fraud work programme provided a sufficient level of assurance on the adequacy of the council’s counter fraud arrangements.
The Director: Governance and Partnerships submitted a report that summarised the management assessment of the council as it continued to operate as a going concern for the purposes of producing the Statement of Accounts for 2019/20.
The committee was informed that the council was required to compile its Statement of Accounts in accordance with the Code of Practice for Local Authority Accounting as published by the Chartered Institute of Public Finance and Accountancy (CIPFA). In accordance with the Code, the Council’s Statement of Accounts was prepared assuming that the Council would continue to operate in the foreseeable future and that it was able to do so within the current and anticipated resources available. By this, it was meant that the Council would realise its assets and settle its obligations in the normal course of business. As part of this process the Council’s appointed External Auditor required the Section 151 Officer to undertake a going concern assessment and assert if the Council could operate in the foreseeable future as a going concern.
As requested by the Council’s appointed External Auditor Mazars, and as part of the closure of the 2019/20 financial statements, a going concern assessment as at the Balance Sheet date of 31st March 2020 had been completed. Considering the Covid-19 outbreak and the significant additional expenditure, and lost income for the Council as well as the financial support provided by Government, this was increasingly important.
The CIPFA Code (para 22.214.171.124) stated “an authority’s financial statements shall be prepared on a going concern basis; that was, the accounts should be prepared on the assumption that the functions of the authority would continue in operational existence for the foreseeable future (see also paragraph 126.96.36.199 for bodies that followed the Code but may be discontinued without statutory prescription). Transfers of services under combinations of public sector bodies (such as local government reorganisation) did not negate the presumption of going concern”.
The concept of a ‘going concern’ assumed that an authority, its functions, and services would continue in operational existence for the foreseeable future. This assumption underpins the accounts drawn up under the Local Authority Code of Accounting Practice and was made because local authorities carried out functions essential to the local community and were themselves revenue-raising bodies (with limits on their revenue-raising powers arising only at the discretion of central government). If an authority were in financial difficulty, the prospects were that alternative arrangements might be made by central government either for the continuation of the services it provided or for assistance with the recovery of a deficit over more than one financial year.
Where the ‘going concern’ concept was not the case, particular care would be needed in the valuation of assets, as inventories and property, plant and equipment may not be realisable at their book values and provisions may be needed for closure costs or redundancies. An inability to apply the going concern concept would potentially have a fundamental impact on the financial statements.
The Director guided the committee through ... view the full minutes text for item 600.
Audit of Accounts 2019-20
MATTERS ARISING FROM THE AUDIT – The Director: Governance and Partnerships submitted a report informing the committee that the Accounts and Audit Regulations required the council to publish a statement of accounts each financial year. These accounts were the formal statement of the council's financial performance for the year and its financial position at the end of that period. A financial year ran from April to March.
The legislation relating to the timescale for the production and audit of the accounts was amended for the 2019/2020 financial year due to the Coronavirus Pandemic. These changes were incorporated into the Accounts and Audit (Coronavirus) Amendments Regulation 2020 (SI 2020/404).
The production of the draft accounts deadline moved from 31 May to 31 August 2020. The audit completion date moved from 31 July to 30 November 2020.
The Director confirmed that she approved the council’s unaudited accounts on 3 July 2020. This met the statutory requirement that they be approved by 31 August 2020.
The Accounts had been produced under International Financial Reporting Standards (IFRS).
The accounts had since been audited and the external auditors had set out their findings in a report. Members were required to consider the proposed amendments and approve the changes to the accounts that result from it. It was a statutory requirement that this process be concluded by 30 November 2020.
The International Standard on Auditing 260 – ‘The Auditor's Communication with Those Charged with Governance (ISA 260)’ required auditors to report certain matters arising from the audit of the council’s financial statements before giving an opinion on them.
The report from the council’s Auditors (Mazars) was attached to the report as an appendix. It set out the matters arising from the audit of the council’s 2019-2020 accounts. A copy of the amended accounts was attached as an appendix.
The main findings of the report were:
Ø It was expected that an unqualified opinion on the council’s accounts with an Emphasis of Matter paragraph be included in relation to uncertainty around valuations.
Ø It was expected that an unqualified opinion on the council’s arrangements for securing Value for Money would be raised.
Ø In relation to internal controls the report recommended that:
· a check was put in place to ensure the Pensionable pay figure within the annual actuarial report was checked to ensure it was the same as the figure provided
· valuation certificates included arithmetic checks to ensure they were accurate
· a comparison of new Property, Plant and Equipment valuations to net book values plus in-year depreciation took place at year-end, and
· the sample checks that were undertaken of authorised signatories on creditor invoices was documented.
The Director confirmed that a manager’s response had been provided for each of these areas and processes would be put in place to prevent them from occurring in the future.
Ø 1 unadjusted misstatement was identified in relation to the Cash Flow statement
· The cash flow statement included a balancing figure of £311k within the working papers.
The value was investigated ... view the full minutes text for item 601.
Any other items which the chairman decides are urgent by reasons of special circumstances which must be specified.
There were no other items submitted.