Agenda item
Statement of Accounts 2018-19 Progress Update
Minutes:
Mr Kevin Bartle, Interim Divisional Director for Finance, Procurement and Audit presented the progress report in relation to the external audit of the Council’s Statement of Accounts 2018/19.
Mr Bartle said the set of accounts attached to the report was an attempt at restating the 2018/19 accounts. He said the previous set of accounts produced for the end of July 2019 had a significant number of audit queries and concerns and as such it was decided the accounts should be reproduced before presenting these to the Committee. Mr Bartle said it should be noted the impact of this had resulted in the re-opening of the 2017/18 accounts, with several material adjustments being made. He said whilst it was not a statutory requirement to bring the accounts to the Audit Committee, an officer decision had been made to share the extent of the work undertaken with Members for the sake of transparency. Mr Bartle said that in some areas work was still on-going, but Deloitte’s would undertake their detailed external audit of these accounts before examining the 2019/20 accounts. He referred members to paragraph 3.3 which set in detail the issues and action taken.
Mr Neville Murton, Corporate Director for Resources, then addressed the Committee stating he regretted the position the Council was in but wanted to reassure the Audit Committee more robust processes had been put in place to identify issues early. He referred to the table at paragraph 3.3 and said these covered a wide range of technical accounting issues. Prior to these issues being identified by Deloitte’s, the previous external auditors had given the Council a clean audit opinion for several years. Therefore, there were a few lessons the finance function of the Council needed to understand and learn. Mr Murton said a report by CIPFA, which was a pre-cursor to the Finance restructure, had stated the audit process and the successful production of the accounts was a strength of the Council. Hence this would need to be re-examined; how this can be so, when all these matters have arisen. Mr Murton went on to say that he would be commissioning an independent report which would report back to the Audit Committee, the lessons that need to be learnt and how and if the finance restructure had impacted on the production of the accounts. Mr Muton said he would bring back a clear and unambiguous evaluation for the Committee to consider.
In response to questions from Members the following was noted:
· Mr Murton confirmed his intention was to bring back the independent report to the Committee in November 2020, when the 2018/19 and 2019/20 accounts were to be signed off. He said the timescale may move due to the current situation with the pandemic, because discussions would need to take place virtually. Mr Murton added staff helping with the production of the accounts were interim appointments however he was seeking to recruit a permanent Chief Accountant as soon as the pandemic situation improved, and the jobs market was ripe for recruitment.
· In response to if the position of Chief Accountant was vacant prior to the interim appointment, Mr Murton confirmed the former Chief Accountant was involved in the production of the 2018/19 accounts and left the organisation in September 2019. Mr Murton said the finance restructure, which took place in April 2019, involved all staff having to be reassessed for posts in the finance team and the former Chief Accountant had been unsuccessful in securing a post however remained with the Council until September 2019.
· In response to how lessons learnt are being embedded into finance processes, Mr Murton said the Finance Improvement Team were ensuring further training and development of staff in key areas of recovery. Mr Murton said one of the challenges was the need to be consistent and to embed good practice, especially as the finance teams were centralised as part of the restructure. Mr Bartle added the interim appointees within his team were keen to ensure knowledge transfer took place and were running training courses on the need for enhanced working papers and the standard required. He said the production of the accounts not only involved finance staff but staff in the Services, where budget holders equally needed to ensure finance process were being followed.
· In response to how many posts were filled with interim staff, Mr Murton said there were quite a few interim and agency staff in post. He said three out of five Strategic Finance Officers were permanent members of staff however efforts were being made to recruit to the vacant posts which had been hindered slightly by the pandemic.
· In reply to if the independent review would be looking at the role of the pervious auditors and their liability, Mr Murton confirmed the review would do this. He said based on the findings and recommendations from the review, the Council would make a judgment on writing to the previous auditors plus the governing body for auditors to express dissatisfaction, especially as some of the issues highlighted by Deloitte’s are standard accounting issues which the previous auditors ought to have identified.
· Regarding the independent review Mr Murton confirmed this would look at the issues identified at paragraph 3.3 of the report and would question why processes had failed. He said he would expect the review to comment upon the quality of working papers, the testing and challenge of those documents. He said the report would put forward recommendations and resolution.
o ACTION: Mr Murton to share the terms of reference of the Independent review with members of the Audit Committee via email.
The Audit Committee RESOLVED to:
1. Note the revised set of accounts produced by officers to address the points raised by Deloitte.
2. Note the continuing progress made on the points raised by Deloitte in their report to this committee on 23rd July 2019.
3. Note further emerging matters.
Supporting documents:
- 2020 04 23 Statement of Accounts - Progress Update v3, item 4.1 PDF 274 KB
- Final_Accounts 1819 REVISED FINAL SIGNED APR 2020, item 4.1 PDF 2 MB