Issue - meetings

To consider a report providing an update on the Council’s Financial Statements.

Charlotte Goodrich and Neil Hewitson, KPMG, attended the meeting to present the Annual External Audit Report for 2015/16.  The report summarised the key findings arising from an audit of the Council’s 2014/15 financial statements and a Value for Money judgment on the Council’s arrangements to secure economy, efficiency and effectiveness in its use of resources.

It was reported that, although filing deadlines had been missed, KPMG had issued a clean audit statement on the Council’s 2014/15 Financial Statements.  The Auditors concluded that whilst the Council had made proper arrangements to secure economy, efficiency and effectiveness in its use of resources and to ensure financial resilience in 2014/15 there had been concerns about the capacity of the Finance Team and the application of core financial controls which had impacted on the Council’s financial control and efficiency and productivity during the 2014/15 financial year. Consequently a Qualified (Except for) conclusion in relation to the Council’s ability to secure Value for Money was issued.

It was recognised that the introduction of a new financial ledger system on 1 April 2014 had been a challenge for the Council and had had a detrimental impact on the consistency with which financial controls were applied in-year and meant that the monitoring of actual expenditure against budgets did not take place as regularly as it should have done during 2014/15.  A number of key recommendations had been identified as a result of the audit and it was expected that addressing these would ensure that future audits had more positive outcomes.

The Auditors thanked all members of staff involved in the audit for their hard work and assistance.

Arising from the Committee’s questions and comments the following points were noted:

·         Officers had found the new financial ledger system to be much more user friendly than the previous one, which had been over twenty years old, and its structure meant that reporting was now much more streamlined than in the past.

·         Many of the issues identified by the audit related to technical matters rather than to the way that money was being handled.  In addition, many of the matters that had been scrutinised by the audit had never been subjected to an audit and this had highlighted a significant number of matters that had required addressing.

·         Although the deadline for filing the Council’s 2014/15 Financial Statements had been missed no penalties could be levied against the Council however it was not considered good practice to miss the filing deadlines.

The Executive Head of Finance acknowledged that the limited resources available had impacted on the implementation of the new financial ledger system and that this had caused negative consequences for the Council.  Additional resources had been engaged to assist with the year-end processes and the situation would be reviewed in May 2016.  If this review identified the need for ongoing additional resources then these would be identified.

The Committee thanked all those who had been involved in implementing the new financial ledger system and the audit for their work.  ...  view the full minutes text for item 18