Issue - meetings

REPORT OF ERNST AND YOUNG

Final Audit Result Report in relation to the audit of North Hertfordshire District Council 2021-22.

RESOLVED: That the Final Audit Results Report 2021-22 was noted.

Audio recording – 4 minute 20 seconds

Debbie Hanson, Ernst & Young introduced the report ‘Final Audit Result Report 2021-22’ and stated:

·       This was an update to the report presented to Committee in March 2023.

·       The Pension Fund had a triennial valuation which commenced in March 2023.

·       Additional work was undertaken regarding the Pension liabilities, which concluded that the Pension Fund triennial valuation represented an adjusting post balance sheet event.

·       Work was now completed on the audit, and it would be an unqualified audit report, with no matters to report other than a very positive position.

Rachel Merez Ernst & Young presented the report ‘Final Audit Result Report 2021-22’ and further highlighted that:

·       An audit difference of £5.6m was highlighted at page 23 of the report, this related to an asset being recorded twice, and resulted in a final adjustment of £6.9M as at March 2022.

·       This also required adjustments in prior year £6.7M at March 2021 and £6M at March 2020.

·       As a result of this accounting error the Council was required by the Accounting Standards to present three years of balance sheets in their statement of accounts.

·       An additional adjustment (compared with the March report) of £1.5M was made in relation to the incorrect classification of assets.

·       The pension liabilities increased by £9.4M after the triennial valuation data.

·       The highlighted errors impacted unusable reserves only and had no impact on the General Fund.

·       Management has agreed to correct all identified errors affecting the primary statement except for the North Herts District Councils share of the errors identified by the auditor in their audit of the pension fund accounts, as these are not material.

·       The draft audit opinion status was presented on page 38 of the report.

In response to a question from Councillor Tamsin Thomas, Ms Merez advised that the report was submitted around a month prior to the meeting, and in that time the items outstanding had reduced further.

In response to questions from Councillor Tamsin Thomas, the Service Director – Resources stated that:

·       Increased training and awareness of CIPFA guidelines had been instigated to prevent the cashflow classification mistakes that had been highlighted in this Audit.

·       The cash reserves were invested over and over again during the year, in line with the treasury strategy. This therefore leads to large errors.

·       Fixed assets were tracked on a spreadsheet, and an error was identified on this spreadsheet. This error had now been rectified and improved for the 2022-23 audit.

·       The implementation of a new Finance IT system would streamline the Accounts production process.

Councillor Tamsin Thomas proposed and Councillor Mandi Tandi seconded and, following a vote, it was:

RESOLVED: That the Final Audit Results Report 2021-22 was noted.