Agenda item

To receive a report seeking Members approval to the Council’s final audited Statement of Accounts and to consider any material amendments identified by the Council or recommended by the auditors.

Further to minute 10 of the meeting held 24^th June 2016 where the Committee considered the unaudited 2015/16 Statement of Accounts, the Deputy Chief Executive submitted a report seeking approval to the Council’s final audited Statement of Accounts for 2015/16. The report also sought consideration of any material amendments identified by the Council or recommended by the auditors.

The report set out the key findings of the external audit undertaken by KPMG. A copy of the “Management Representation Letter” dated 16^th September 2016 was attached as Appendix A of the report along with the full KPMG External Audit Report 2015/16. Prior to the meeting, the Committee received a supplementary pack containing revisions to pages 10,13 and 21 of the report from KPMG

The Principal Financial Manager presented the report and highlighted the following issues: 

·  KPMG anticipated being able to issue an unqualified opinion on the 2015/16 Statement of Accounts;

·  There were no unadjusted audit differences affecting the financial statements;

·  KPMG’s review of the Annual Governance Statement had concluded that it was not misleading or inconsistent with information they were aware of from their audit of the financial statements;

·  KPMG’s review of Value For Money (VFM) arrangements had concluded that the Council had made proper arrangements to ensure it takes properly informed decisions and deployed resources to achieve planned and sustainable outcomes for taxpayers and local people

·  Post balance sheet events and other adjustments had been recognised since the draft accounts were considered by the Committee as detailed below. These resulted in a revised increase in the Council’s net worth for the year of £65m (in comparison to the £66m shown in the draft accounts) :

-  an increase in the level of the provision for appeals against business rates valuations to £23.2m

-  the levy payable to the Leeds City Region Pool had reduced by £0.3m

-  a small number of corrections to revaluations of the Council’s fixed assets had been identified during the summer, resulting in an increase of £2.6m in General Fund assets and a £2.3m reduction in the value of HRA dwellings classed as “assets for sale”

-  no further post balance sheet events had occurred since the Committee papers were circulated

·  The accounts had been certified by the Responsible Finance Officer as a true and fair view of the Council’s financial position as at 31st March 2016.

Mr R Walker, KPMG attended the meeting and presented KPMG’s report to the Committee, highlighting the overall positive opinions which they anticipated being able to issue. On the outstanding matter of the audit of the PFI valuation, he provided the Committee with assurance that this was not a material issue and would not delay completion of the Accounts.

Discussions considered the following matters:

·  Business Rate risks - noting Central Government’s assurance that Local Authorities without Devolution powers should not be disadvantaged

·  Whether disclosure requirements for related party transactions are greater for those Members who are responsible for portfolios. It was confirmed that the related party disclosure requirements for the Statement of Accounts are the same for all Members

·  The analysis of expenditure and income for individual directorates - in particular the comparison figures for employee expenses for the periods 2014/15 and 2015/16 – further information was requested to explain the differences

·  The Council’s reserves total – noting that consideration of financial resilience was included within the KPMG report. The Head of Corporate Finance reported that the level of council reserves was considered in the medium term financial strategy to be reported to Executive Board in September and thereafter by Full Council through the annual budget setting process

·  Revaluation gains and losses on fixed assets and pensions liabilities

RESOLVED -

i)  To receive the report of the Council’s external auditors on the 2015/16 accounts and to note that there are no unadjusted audit differences required to the accounts.

ii)  To approve the final audited 2015/16 Statement of Accounts and the Chair be authorised to sign the appropriate section within the Statement of Responsibilities on behalf of the Committee.

iii)  That on the basis of assurances received, the Chair be authorised to sign the management representation letter on behalf of the Corporate Governance and Audit Committee.

iv)  To note KPMG’s Value For Money (VFM) conclusion that the Council has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

v)  To request that further information be circulated on the reasons for the significant changes in employee expenditures reported in some directorates

(Councillor Flynn left the meeting at this point)