Agenda item

[To note the report]

Richard Bacon and Sophia Mouyis from PricewaterhouseCoopers (PwC), the Council’s External Auditor presented their annual report to the Committee on the audit for the year ended 31 March 2015. In doing so they informed the Committee that they had completed the majority of their work.  Aspects relating to property valuations and the Council’s savings plans remained outstanding.  These areas of work had no impact on the overall financial standing of the Council and PwC anticipated making the 30 September 2015 deadline for publishing the statement of accounts.

Cllr Phil Bateman commented that the last five year had been difficult for both Councillors and employees and that PwC’s work had been a beacon for the Council.  He welcomed the positive comments PwC had made in presenting their report and noted with concern the comment made that after the Local Government Settlement Statement is  announced towards the end of the year, the Council in all likelihood would have to look at its non-statutory services. 

Referring to Minimum Revenue Provision (MRP) policy and PwC’s conclusion that the Council’s revised MRP policy does not comprise any illegal act based on the legal advice provided, Mike Ager, Independent Member asked whether the change in policy might rebound on the Council in years to come. PwC reported that the MRP was drawn by law and regulation.  The Council had concluded that its revised policy to be more prudent than the previous method; the key word being prudent.  The legal advice provided to the Council said that the approach the Council had taken on its MRP to be prudent. 

Cllr Stephen Simkins asked how exposed the Council was to interest rate rises.  He was informed that the Council’s Treasury Management Strategy was predicated on internal borrowing which had saved the Council a lot of money. The Council’s Medium Term Financial Strategy (MTFS) took into account the best offers available on interest rates, this was all hotwired into the MTFS.  If interest rates increase there is flexibility in the MTFS to take out short term borrowing to meet these costs.  Any such changes would be included in the budget setting process and communicated via briefings and in the report to Cabinet in November 2015 on the Council’s Draft budget 2015/16.  Since the Council would not receive its Settlement Statement from Central Government until just before Christmas, it would not know the full impact of changes. Joint briefings would go out as soon as the impact was made clear.

Terry Day, Independent Member queried whether PwC’s comment on ‘lack of leaver’s forms for staff using the Care First System’ highlighted a significant control problem or whether it should be seen as operational issue.  PwC explained that because they could not get full compliance with the test they had to undertake the audit work.  PwC undertook to consider the point made and make adjustments were appropriate.

Cllr Phil Bateman asked about the ‘Airport valuation’ and whether the drop in the estimated valuation of the Council’s investment was significant. PwC reported that there was no change to the holdings. They briefly explained the process of an annual review of the valuation of the investment and its apportionment across the Councils and that PwC had to check the value the Council had placed on the assets.  The valuation was a book entry.  It was not significantly different from the previous year’s valuation.

On the area ‘Compliance with Related Party Declarations’, Alison Dennant, Interim Democratic Support and Scrutiny Manager informed the Committee that the Director of Governance was working on actioning the Auditor’s recommendation to provide refresher briefings to Members’ on the requirements for related party declarations and on reviewing the declaration to ensure that it was compliant with the accounting standard. Councillor Collingswood, the Chair of the committee asked if this could be further picked up outside of the meeting

On PwC’s recommendation, the Committee queried whether the relevant Councillors had been made aware of the Auditor’s statement prior to the report being published.

At the end of the discussion, the Chair thanked PwC for their report and for responding to the Committee’s questions.  On behalf of the Committee he placed on record his thanks and appreciation to the Team at PwC for the expert work and advice and professionalism they had showed during their many years as the Council’s External Auditors.

Resolved:

That the 2014/15 report to those charged with governance from the Council’s External Auditors PricewaterhouseCoopers be noted.