Agenda item

Please be advised that the covering report is attached to the Agenda.

The following documents will follow:

1.       ISA260

2.      Statement of Accounts for 2017/2018

In presenting the ISA 260 report, the External Auditor, Dan Cook, advised that the audit of the Borough Council had been completed for the year ended 31 March 2018 and that the outstanding matters listed in their report had now all been concluded. He confirmed that they were issuing an unqualified audit opinion on the financial statements in the form at Section 3.  He acknowledged the assistance given by the S151 Officer and her team to carry out the audit, particularly with the new deadline of 31 July 2018 for the closure of accounts.  He considered that it was a good Audit outcome. 

Ernst and Young advised that the report was intended solely for the use of the Audit Committee, other Members of the Authority and senior management; it should not be used for any other purpose or given to any other party without obtaining the External Auditor’s consent.

The Committee’s attention was drawn to the following items:

·        All of the items listed as requiring completion had now been finalised.

·        Some issues had been corrected, but there were no unadjusted figures.

·        There were no additional areas of Risk identified that were not already included in the report.

·        The comments on the pension fund were the same for all Councils and was a difference in the reporting periods of the Actuary and the Pension Fund.

·        He had made a recommendation that procedures be reviewed prior to submission of the draft.

·        No risks were recognised in the value for money element of the audit.

·        The health check for the Council’s balances in 2021 was looking positive.

·        He confirmed that Ernst and Young were still independent from the Council.

·        He drew attention to the additional fees that they would be charging for which would have to be agreed with the PSAA.

Ernst & Young, the Group Accountant and the Executive Director responded to questions on the Statement of Accounts and the ISA260 relating to:

·        The long term debt written off was from Morston Assets who had gone into liquidation owing contributions to the Council for developments.

·        The earmarked reserves could be used at a later date, they had been increased over recent years to take into account the financial situation.

·        He confirmed that provided all the points and adjustments raised by the auditors had been completed the accounts were materially correct.

·        He agreed that checking had been carried out but some issues were identified with plant and equipment.

·        In response to the increase in fees and the point made about the potential for working closer with the internal auditors and using the information they had produced so bringing down the costs. He said they would continue to consider the option but internal audit worked from samples and the external auditors needed to carry out a substantive audit.

·        It was confirmed that there should be brackets round the figure in the table on p54.

·        The related party transactions showed there had been a small number of undeclared transactions, all of which had been rectified.

·        The categorising of the NWES investment to a loan was requested as he considered it was similar in nature to a loan.

The Chairman thanked Dan Cook from Ernst and Young for attending and answering questions from the Committee.

The Committee considered the Statement of Accounts (SOA) 2017/2018 which was  the final accounts set out in a format which included the Council’s balance sheet and associated notes.  The report also considered the report from the Auditor on the Accounts 2017/2018 – the International Auditing Standard (ISA 260).

The Committee was reminded that the Council must formally approve the SOA for 2017/2018 by 31 July 2018.  As the Council’s designated S151 Officer, the Executive Director, Finance Services, was responsible for the SOA and certified her acceptance of the accounts.  It was noted that associated with the final accounts the Council was required to sign off an Annual Governance Statement (AGS) which was separately listed on the Agenda.

On agreement of the Accounts, the Chairman and the S151 Officer signed the Statement of Accounts with a bracket amendment on p54, and the Letter of Representation on behalf of the Borough Council of King’s Lynn and West Norfolk.

RESOLVED:  The Audit Committee:

1)               Considered the comments of the Auditor in the ISA260.

2)               Approved the Statement of Accounts for 2016/2017 as now amended.