Agenda item
London Borough of Tower Hamlets - Report to those Charged with Governance (ISA 260) 2012/13
- Meeting of Meeting Moved from 17 September, Audit Committee, Thursday, 26th September, 2013 7.00 p.m. (Item 4.1)
- View the background to item 4.1
To receive the report of KPMG, the Council’s Auditors
Minutes:
At the Chair’s invitation, Mr Sayers of KPMG presented the Council’s Annual Governance report which reported the outcome of KPMG’s annual audit work for the Council according to the agreed external audit plan 2012-13.
Mr Sayers advised that:
· KPMG expected to issue an unqualified opinion and certificate concluding the 2012-13 audit, by 30 September 2013 subject to completing:
o the investigation of a number of outstanding enquires, the and
o the procedures specified by the National Audit Office on the Council’s whole governance account return.
· only two significant audit adjustments were identified
o accounting for employee annual leave that was not taken at the financial year end and
o a provision relating to the administration of Municipal Mutual Limited
· eight of the nine recommendations made in the previous year’s annual audit had been implemented.
· the audit had not identified any significant issues from the planning risks around property, pensions or VFM savings plans
· the control environment over all was effective and
· the report included eight recommendations, but none of these were considered to be at the highest (priority 1) risk level (see Appendix 1)
Further, he:
· confirmed that KPMG’s VFM conclusion would also be unqualified as KPMG was satisfied that the authority had made proper arrangements to secure economy, efficiency and effectiveness in its use of resources and
· noted the importance of completing the corporate governance review and implementing its recommendations.
In response to Member’s questions, the following matters were discussed:
Audit Adjustments:
? concerning an audit adjustment to reduce the net worth of the authority by £1.184M, the Committee was informed that there was no impact as, in practical terms, it was moving funds from an earmarked reserve to a provision.
Local Governments Electors Enquiries:
? concerning an enquiry relating to councillors’ expenses, the Committee was advised that this had been investigated and revealed no major issues. However, to improve governance further, the procedures were being revised.
? concerning an enquiry relating to the potential sale of a heritage asset, Members were advised some procurement procedures had been revised however the decision around which auction house and how the sale would be handled had not yet been finalised.
? concerning protocols for responding to these enquires; the Committee was advised that members of the public were permitted to lodge written queries with KPMG. Upon receipt, these would be assessed to ascertain whether it constituted an enquiry or an objections. If it was an enquiry, KPMG would determine whether it was best placed to investigate or consider referring it to the Council’s internal audit team. It was noted that none of the enquiries received during the year had become a formal objection.
· concerning whether investigations would be charged, the Committee was advised that the Audit Commission set a scale of fees for the audit. Any additional work, such as that required by enquires and objections relating to the accounts, needed to be agreed with the Audit Commission and was based on actual time needed and at the rates set by the Audit Commission.
RESOLVED:
1. That the report be noted taking in to the account the matters raised in the audit
- That the headline messages in Section 2 be noted
- That the key findings in relation to the 2012/13 financial statements set out at Section 3 be noted
- That the key findings in Section 4 from the work on VFM conclusion be noted
- That the recommendations set out at Appendix 1 be noted
- That progress in implementing previous year’s recommendations in Appendix 2 be noted
7. That the Council’s ISA 260 audit report be approved
Supporting documents: