Agenda item

REPORT OF ERNST AND YOUNG

To consider the Audit Results Report.

RESOLVED: That the Audit Results Report was noted.

Audio recording – 14 minutes 2 seconds

Debbie Hanson, Ernst and Young, gave a presentation and advised:

·         The audit was substantially complete and this report was drafted on 24 February 2023. Not expecting to find anything that would change the Accounts.

·         There were no changes to the audit scope since the December presentation.

·         Performance and overall materiality had been reviewed and remained appropriate.

·         Expect to issue an unqualified opinion.

·         Work undertaken on Value for Money identified no significant issues.

·         The Value of Money risk assessments were not fully complete but were not expected to identify any issues.

·         Certificates were unable to be issued alongside the audit opinion due to ongoing authority sampling that the National Audit Office (NAO) may require.

·         Have identified some audit adjustments which are outlined in the report.

·         Page 72 detailed control environment recommendations in relation to the fixed asset register cash flow statement.

·         The Council have already committed to take action to address these recommendations, which was positive.

In response to the question from Councillor Tyler, Ms. Hanson advised that there was no timescale on when certificates could be provided.

Rachel Merez, Ernst and Young, gave a presentation and advised:

·         There were no issues identified in Misstatements to due to fraud or error and inappropriate capitalisation of Revenue spend.

·         No material errors were found in valuation of Investment properties.

·         PPE valuation balance identified a few issues such as a duplicate asset in the fixed asset register relating to Museum Services development valued at £5.6million.

·         As this would impact the prior year’s figures, would require adjustments to the comparative years too.

·         The Council had identified other assets that had the same issue, but the impact was not as material and adjustments will be made.

·         Revaluation reserves had identified issues. Some upward movement had gone to revaluation reserves instead of provision of services. Other assets were being queried from this issue, but there was no impact on the General Fund.

·         £1.5million of other land, buildings assets needed to be reclassified to other PPE categories, which management had opted to adjust for.

·         A minor disclosure point was raised which related to the Summary of Assets valued each year. Management has agreed to include this in the Statement of Accounts.

·         In relation to the net pension liability value, Ernst and Young were waiting to receive the assurance letter from the pension fund auditor.

·         In relation to the Net Pension Liability Value, the Assurance Letter from the Pension Fund Auditor had not been received. A draft version had one minor error and adjustment.

·         The Council had received an updated actuary report which showed an increased value of pension liability by £2million which they had agreed to adjust.

·         Benefits paid was included in the Assurance Letter from the Pension Fund auditor and identified a difference of £617k in net pension benefit. This did not affect the overall balance of Pension Liability.

·         Growoing concern work now complete and no issues found.

·         Other differences in the report related to the classification of short-term creditors and grants received in advance. The difference of £2.6million did not impact the total asset balance.

·         Treatment of some transactions within the cash flow statement had been adjusted by management.

·         One of the investment confirmations from Santander had not been received yet. Ernst and Young as well as Council management were chasing the confirmation.

Ms. Hanson and Ms. Merez thanked the Finance Team for their support during the audit.

The Service Director – Resources advised that the Council was chasing the investment confirmation from Santander.

In response to the question from Councillor Clare Billing, the Service Director – Resources advised that the Council were looking at simplifying the Fixed Asset register and learning from error. Adjustments would also be made for other errors.

In response to the question from John Cannon, Ms. Hanson advised that the 2022/23 Audit would start just before Christmas. It was likely that the deadlines in the Accounts and Audit regulations would not be met. The longer-term aim was to complete audits in a more compressed timetable.

Councillor Terry Tyler proposed, Councillor Clare Billing seconded, and after a vote, it was:

RESOLVED: That the Audit Results Report was noted.

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