Mrs Fineman, Head of Finance and Procurement introduced and summarised the contents of this report, which submitted the draft Annual Financial Report for 2018/2019 including the Statement of Accounts. The audit was almost complete as outlined in Grant Thornton’s Audit Findings Report. It was noted that the Auditors intended to issue an “unqualified” Audit Opinion, they had reported that draft statements were of a high quality and work had been completed 5 days earlier than anticipated.
Formal approval was required from the Audit and Governance Committee in order that the Annual Financial Report could be published before the statutory deadline of 31 July 2019. Mrs Fineman updated that it had been the intention for the accounts to have been signed off today following this meeting but for the matter indicated in note 19.1 of the statement of accounts, which related to a High Court judgement known as the “McCloud Pensions Case”. The Council’s Pension Fund Actuaries had indicated that the impact relative to this matter would be immaterial as far as the Council’s accounts were concerned but it remained for Grant Thornton along with other local authority auditors to decide how this matter should be reported within the accounts.
At the invitation of the Chairman, Mrs Jackson, Engagement Lead on the audit by Grant Thornton, confirmed the position already outlined by Mrs Fineman and additionally summarised the audit risks as set out in their Audit Findings document and also that sign off from the KCC Pension Fund Audit was also required before all matters could be finalised. The Chairman declared at this point his membership of the KCC Superannuation Committee.
Mrs Jackson also proceeded to explain and confirm her unqualified Value for Money conclusion, clarifying that this related not to the decisions made by the Council but to the appropriate control and governance procedures that were in place underpinning those decisions. In 2016/17 a public objection had been received in respect of the Calverley Square Project and had been fully investigated. In 2017/18 there were no new arrangements to be considered. She also confirmed the audit of payments through the reserves met relevant accounting standards and limits.
In respect of questions from members, Mr Colyer advised that in respect of the Extraordinary Full Council meeting on 17 June 2019, a Cabinet response was still awaited to the motions passed but there was no impact on the accounts for the period 2018/2019. He also explained that the Calverley Square project would continue to be reported to the Committee via existing Internal Audit processes and the Strategic Risk Review. Otherwise the delivery status of the Council’s big 8 projects would continue to be reported via Cabinet and there was an opportunity for any members to contribute to the Finance & Governance Cabinet Advisory Board beforehand. Mrs Fineman responded to member questions relating to Accounting Standards and Mr Colyer also responded to questions on the retention of Business Rates, issues over the setting of fees to enable cost recovery and central Government funding.
The Chairman and Vice-Chairman commended the Finance Team on an excellent set of financial statements and a positive end of year outturn.
RESOLVED – That the Audit and Governance Committee
1. Notes Grant Thornton’s Audit Findings Report;
2. Approves the draft Statement of Accounts and the Annual Governance Statement ;
3. Authorises the Chairman and the Director of Finance, Policy & Development to sign a Letter of Representation based on the draft Statement of Accounts (Appendix A) and the Audit Findings Report (Appendix B) of the agenda report; and
4. The Director of Finance, Policy & Development (Section 151 Officer) be given delegated authority in consultation with the Chairman to make any necessary amendments to the Statement of Accounts.