Meeting documents

·         Audited Statement of Accounts presented by Richard Ambrose – Director of Assurance.

·         BCC Audit Findings Report presented by Paul Grady (Grant Thornton).

·         Pension Fund Audit Findings Report presented by Thomas Slaughter (Grant Thornton).

Also contributing: Julie Edwards – Pensions and Investments Manager,

Elspeth O’Neill – Projects and Financial Accountancy Lead, Patrick McGovern – Pensions Board, Rachael Martinig – Accountant.

The Chairman welcomed

·         Mr R Ambrose – Director of Assurance

·         Mrs E O’Neill – Projects and Financial Accountancy Lead

·         Ms J Edwards – Pensions and Investment Manager

·         Mr P McGovern – Senior Finance Officer

·         Mrs R Martinig – Accountant

·         Mr P Grady – Grant Thornton – External Auditor

·         Mr M Ward – Grant Thornton

·         Mr T Slaughter – Grant Thornton

·         Ms A Robinson – Grant Thornton

Mr R Ambrose introduced the report and explained that this was the final set of audited accounts following the presentation of the un-audited accounts to the Committee at the last meeting.  Mr Ambrose explained that the accounts included the main accounts, the pension fund accounts and the value for money conclusion.

Mr Ambrose informed the Committee that the timetable for closing the accounts had been brought forward by two months compared to last year when the accounts were approved during September. Mr Ambrose acknowledged the good working relationship between Council officers and the Auditors, Grant Thornton, in achieving the smooth transition.

Mrs E O’Neill explained some of the adjustments that had needed to be made to the accounts following the audit, none of which affected the bottom line position or the level of general fund reserves.

Mrs O’Neill explained that three main adjustments to the accounts had been agreed:

·         Fully depreciated assets had been left incorrectly within the fixed assets register. Therefore an adjustment had been made to write out around £.2.5m of intangible assets and £13m of plant and equipment from the gross book value and the accumulated depreciation.

·         There had been around £4m of depreciation overcharged to the Comprehensive Income and Expenditure Statement (CIES) because of an issue related to useful economic lives of assets and how these had been updated in the asset register. An adjustment had now been made to reduce the charge.

·         There had been a presentation error of around £2m in the upward and downward revaluation movements in the revaluation reserve.  This had now been corrected.

Mrs O’Neil explained that a number of other items of disclosure had also been amended including some written disclosure; in particular the post balance sheet events note had been updated in relation to the Energy From Waste Plant.

Mrs O’Neill informed Members that full details were in the Audit Findings Report and that none of the adjustments had affected the general fund balance.

In response to a question about the level of general fund reserves, Mr Ambrose explained that the level of £16m or around 5% set at the February budget was about right and the final level had been £17m or about 6%. Mr Ambrose informed Members that this level was at the advisable minimum and that robust monitoring of budgets within year was essential so that action could be taken quickly to deal with forecast overspends. Mr Ambrose considered that the budget scrutiny process undertaken by the Finance, Performance and Resources Select Committee each year was important in setting the level of reserves taking into account the risks that the Council had identified.

The Committee was told that there were contingencies agreed in the budget setting to deal with budget overspends and that these were in addition to reserves. Mr Ambrose advised Members that contingencies could only be released to portfolios through a formal process involving himself, the Chief Executive and the Leader.  

The Chairman asked Mr P Grady from Grant Thornton Auditors to discuss the Audit Findings Report.

Mr Grady thanked everyone for their hard work and acknowledged the good working relationship with the finance team which had meant that the accounts could be closed early.  Mr Grady explained that none of the issues they had found in the un-audited accounts were as a result of speeding up the process and went on to highlight the following:

·         All outstanding actions had now been completed except one related to schools bank balance confirmations but that as these were not material they would not affect the signing off of the accounts subject to Committee approval.

·         There had been no risk of fraud found as a result of testing of revenue transactions with the Council.

·         There were no material concerns around the sufficiency of bad debt provision and size of unmatched income, however there could be potential to write off more older debt than was being done currently.

·         There was no evidence of the overriding of management controls.

·         There were no material issues related to operating expenses or payroll.

·         There was a difference of view between the Council and the Auditors in relation to the fair value of the loans from the Public Works Loan Board (PWLB). Grant Thornton had estimated a value £8.6m higher than the Council estimate, however this was not material and not considered to be a misstatement. 

The Chairman welcomed Ms J Edwards and thanked her and the team for their hard work in preparing the Pension Fund Accounts. 

Ms Edwards informed Members that some minor changes had been made to the wording in the Pension Fund Accounts after they had been to the Pension Fund Committee on 27^th July 2016.

Mr T Slaughter provided Members with an update on the Audit Findings Report for The Pension Fund and explained that the accounts had been closed earlier than usual in line with the main accounts.

Mr Slaughter explained that the accounts had been produced to a fairly high standard and that nothing had been found that would result in changes to the net asset statement or the fund account.  Mr Slaughter informed Members that a minor change had been made to the disclosure notes and that the letter to new starters had not been sent out although this had now been resolved.

Mr R Ambrose brought the Committee’s attention to the value for money conclusion and asked Mr P Grady to update the Committee.

Mr Grady explained that the value for money conclusion was an assessment of the Council’s arrangements to be able to achieve value for money and explained that there were no concerns around the arrangements in respect of financial planning, contract management or the Future Shape programme.  Mr Grady acknowledged that there had been a qualified opinion by the Head of Internal Audit in respect of historic legacy issues regarding internal controls but although important, they had not resulted in the auditors qualifying the value for money opinion.

Mr Grady acknowledged the positive direction of travel in respect of addressing issues from the Children’s Services Ofsted Inspection, however as there was still work on-going the auditors had qualified the value for money opinion in this area.  

In response to a question about whether 5% reserves were still appropriate, Mr Grady explained that this was reasonable given the level of risk. Mr Ambrose noted that 5% should be the minimum held in reserves and that the level of reserves should be linked to the level of risks.

RESOLVED

The Committee AGREED its response to the matters raised by Grant Thornton in their Audit Findings Report 2015-16 and that the Statement of Accounts for Buckinghamshire County Council and Pension Fund for the financial year ended 31 March 2016 be signed by the Chairman of the Committee.

The Committee APPROVED the Letters of Representation on behalf of the Council and Pension Fund and AGREED that it be signed by the Chairman of the Committee.

The Committee AGREED the response to the proposed action plan within the Audit Findings Reports for the Council and Pension Fund.