Agenda and minutes

Governance & Audit Committee
Wednesday, 25 July 2018 7.30 pm

Venue: Council Chamber - Time Square, Market Street, Bracknell, RG12 1JD. View directions

Contact: Kirstine Berry  01344 354068

Items
No. Item

12.

Declarations of Interest

Members are asked to declare any disclosable pecuniary or affected interests in respect of any matter to be considered at this meeting.

 

Any Member with a Disclosable Pecuniary Interest in a matter should withdraw from the meeting when the matter is under consideration and should notify the Democratic Services Officer in attendance that they are withdrawing as they have such an interest. If the Disclosable Pecuniary Interest is not entered on the register of Members interests the Monitoring Officer must be notified of the interest within 28 days.

 

Any Member with an affected Interest in a matter must disclose the interest to the meeting.  There is no requirement to withdraw from the meeting when the interest is only an affected interest, but the Monitoring Officer should be notified of the interest, if not previously notified of it, within 28 days of the meeting.

Minutes:

There were no declarations of interest.

13.

Minutes of previous meeting pdf icon PDF 150 KB

To approve as a correct record the minutes of the meetings of the Committee held on 27 June 2018.

Minutes:

It should be recorded that, for the Governance and Audit Committee meeting on 27 June 2018 apologies for absence had been provided in advance of the meeting by Councillors Leake and McLean.

RESOLVED that, subject to the amendments above, the minutes of the meeting of the committee held on the 27 June 2018 be approved as a correct record, and signed by the Chairman.

14.

Urgent Items of Business

Any other items which, pursuant to Section 100B(4)(b) of the Local Government Act 1972, the Chairman decides are urgent.

Minutes:

There were no urgent items of business.

15.

Financial Statements 2017/18 pdf icon PDF 237 KB

To approve the Financial Statements for 2017/18 and authorise the Chairman of the meeting to sign and date the Statement of Accounts on behalf of the Committee and sign and date the Letter of Representation.

Additional documents:

Minutes:

The Committee considered the Financial Statements for 2017/18.

Stuart McKellar, Borough Treasurer, and Arthur Parker, Chief Accountant, attended the meeting to brief members on the key points within the Statements.

 

The Borough Treasurer provided an introduction to the financial statements.

The Committee were advised that it had been a hard year for the finance team.  There had been a number of changes partway through the year, and some glitches had been experienced during the reconciliations, but the team had now resolved the issues and had rallied towards the end of the year.  Despite the challenging timetable and pressures the team had responded well and overall it had been a successful process.  The Borough Treasurer gave thanks to Arthur Parker, Chief Accountant and his team for their achievements.

 

The Chief Accountant highlighted some of the key points of note within the financial statements.

  • The actual outturn for the General Fund was within budget with an under spend of -£0.544m.  As a result of the underspend, the Council only had to withdraw £2.024m from General Reserves rather than the budgeted £2.568m and finished the year with a healthy balance.
  • There was an over spend within Children’s Social Care of £3.027m but this had been reduced to £1.139m by an allocation from the Contingency.
  • There was an over spend within Adult Social Care of £1.47m which had been offset by under spends on housing of -£0.531m and joint commissioning of -£0.310m primarily within the budget for grants and donations, and from additional Better Care and Health Care funding.
  • Within Environment, Culture and Communities there had been under spends of -£0.638m on waste disposal.
  • Higher cash balances had been sustained throughout the year resulting in lower borrowing and therefore interest payable plus a discount from paying pension fund contributions in advance resulted in a -£1.85m underspend.
  • There had been an under spend against the Minimum Revenue Provision of -£0.686m.

 

The Chief Accountant highlighted some changes in the statements.

  • The Comprehensive Income and Expenditure Statement includes a number of non cash items.  The deficit on provision of services is approaching £44 million (£43.885m).  The reason is that there was a £53 million loss on the disposal of property, plant and equipment which relates to 5 schools becoming academies where these assets were removed from the balance sheet.  This shows as a loss but this doesn’t impact on council tax and thus has no impact on the end of year underspend.
  • The Movement in Reserves Statement shows that General Reserves have reduced by the £2m to just over £9m in 2017/18.
  • Long term assets had increased significantly.   3 further investment properties had been purchased and there had been an increase in assets under construction with some still to be completed.
  • Within current assets there had been a significant increase in short term debtors, estimated to be around £13m. About half of this increase is due to the CIL construction industry levy where significant sums are receivable but payments are in instalments. 
  • Under Liabilities, there had been  ...  view the full minutes text for item 15.

16.

External Audit Results Report pdf icon PDF 103 KB

To receive a report by the Council’s external auditor summarising the work carried out to discharge their statutory audit responsibilities.

Additional documents:

Minutes:

The Committee received a report by the Council’s external auditor summarising the work carried out to discharge their statutory audit responsibilities.

 

Justine Thorpe, Audit Manager, Ernst & Young, attended the meeting to present the Audit Results Report to the Committee. 

 

The external auditor confirmed that they had substantially completed their audit of Bracknell Forest Council (The Authority) for the year ended 31 March 2018.  Subject to concluding the outstanding matters in the report, they confirmed that they expect to issue and unqualified audit opinion on the financial statements before the statutory deadline of 31 July 2018. They also had no matters to report on the Authority’s arrangements to secure economy, efficiency and effectiveness in the use of the Authority’s resources.

 

The Audit Manager explained to the Committee that clarity was needed as to whether the accounts prepared should use data provided to her by the auditor of the Pension Fund, which differed materially from that used to prepare the accounts, due to a timing difference and significant changes to Gilt values at the end of March.  Officers believed they had the most accurate information available at the time which is what they used to base their figures on but would review the new information provided.  Until this was clear, the accounts may need adjusting. 

 

Subject to resolving this matter, it was expected that Helen Thompson, Associate Partner Ernst & Young would provide her formal opinion and sign the accounts on Friday 27 July 2018.

 

Given this uncertainty, the Chairman suggested that his preference would be to sign the final accounts as close to the deadline of 31 July as possible.

 

The external auditor confirmed that the Authority’s financial team had provided high quality accounts and documentation and that overall it was a good audit for the team and the Council.

 

The Value for Money conclusion was clean, although the risk around the sustainability of the medium term financial plan was a common issue for all authorities.  It was noted that the Council has plans in place, with inevitable challenges.

 

The Chairman summarised that the Council had been let down by an external body. 

He gave thanks to and congratulated the Borough Treasurer and his team for the fact that the audit has nothing to note.

 

Clarity was sought as to where the “Key Audit Issues” section of the report was located.  The external auditor clarified this was covered in the section titled “Areas of Audit Focus”.

Action: The external auditor to amend the titles so they match.

 

It was observed that, on page 9 of the report in the “What are our conclusions?” box text, there is a misleading dotted line box at the bottom right hand of the page.

Action: The external auditor agreed to remove the dotted box from its position.

 

RESOLVED that the report by the Council’s external auditor summarising the work carried out to discharge their statutory audit responsibilities be noted.