Tim Harlock, Interim Chief Accountant, introduced the report asking the Committee to agree to a process to complete the signing-off of the Management Letters of Representation to the Auditors.

This would normally be a business as usual process but on this occasion, as it had taken so long, the Committee were being asked to note the situation and it was also being asked to agree that the Chair be a co-signatory to the letter.

However, the accounts were not quite ready to sign off and so the Committee were asked to agree to delegate to the Section 151 Chief Finance Officer to conclude the process and that the Chair sign at that point.

The committee discussed the report and considered a number of issues as set out in a presentation to the Committee. Some of the main points of discussion included:

·       Whether there was sufficient detail in the report. 

·       How land values were being calculated on the schools’ estate and whether these were appropriate and the valuations had been correctly conducted.

o   It was noted that external support was used in supporting the valuations and that the process would be monitored for future audits.

·       Importance to be confident of the valuations of assets in the proposed housing joint venture.

·       Working was ongoing in relation to net pension liabilities.

·       Related party and group accounts was an important area of work. It was noted that the King George’s Field Trust Board had become a bigger entity once its assets were fully accounted.

·       Group accounts take time, the plan is to get the single entity accounts signed off first for the older years and then move to producing group accounts for 2020/21 onwards.

·       There was still an issue in receiving related party declarations from retired councillors and officers are alert to the risks, better processes were being implemented for the future.

·       There was no apparent significant longer-term impact from the reduction in collection rates during the Covid-19 pandemic.

·       The biggest provision in the accounts was in relation to Business Rate Appeals. There is a nationwide backlog of appeals and this does have an impact.

·       Lots of work has been undertaken reviewing where cases of fraud may have had an impact on the financial accounts. The internal auditors investigate potential instances of fraud and report back in summary form on an ongoing basis to the Committee.  

·       It was recommended that a report is presented to the committee in response to fraud control recommendations.

·       The Committee would like to see the recommendations coming out of the review of the pension liability valuations, either as a report or a briefing depending on the level of issues shown.

Finally in response to questions, it was reported that mistakes had been corrected where they were material to the accounts and new processes embedded where possible. It was likely that there would still be some issues for the 2020-21 accounts but beyond that the newer procedures should result in  fewer issues. It was noted that Deloitte were expecting the Committee to confirm they were content that issues had been addressed and that the processes were in place to capture any future issues. They also reconfirmed their strong recommendation that the Committee receive a report addressing the control observations that they had presented in their January 2023 reports to the Committee. The Committee asked that such a report be prepared at the appropriate time.

Officers reported that the report for the 22-23 accounts should show the improvements that have been made and that a new register of recommendations from any statutory inspections was being created and monitored. 

The Committee thanked officers for the presentation and discussion. It was noted that the work on the pension liability was likely to conclude shortly before the next scheduled meeting of the Committee. Members therefore concluded that instead of delegating authority to sign off the letters of management, a report should be presented to the next meeting when it was hoped all matters would have been concluded. The recommendations were changed on that basis.

RESOLVED

1.    That the report be noted.

2.    That a further report be brought to the Committee at its next meeting to confirm sign off of the letters of management representation.