Agenda item

Report attached.

In accordance with Section 100B (4) 0f the Local Government Act 1972 the Chairman had agreed that the report should be considered to ensure that the Council was able to meet its statutory deadline and sign off the Statement of Accounts.

The Council’s Statement of Accounts was required to be published after the conclusion of the external audit of accounts; no later than 30 September 2016. Following approval by this Committee, the accounts must be signed by the Chairman of the Committee and the Chief Executive.

Back in March the Committee had noted the accounting policies applicable to the financial year 2015/16 and these were reflected in the draft statement of Accounts. As a result of the audit of the accounts, policy ii: Accruals of Income and Expenditure was updated to state:

“Outstanding creditors are written out of the accounts if they have not been billed for by the supplier after a period of two years.”

The draft accounts had been published in June and with one exception there had only been only minor amendments to the statement. The exception was the revaluation of the Council’s housing stock. The original figure had been based on an assessment by valuers at the beginning of the year. They had since indicated that changes in the market over the year required an uplift of 10% (£44m) in the value of the Housing stock.

The Committee expressed concern at the late circulation of the Statement of Accounts and asked the External Auditors to explain what had caused the delay. 

The External Auditors explained that Havering was lnew client which presented them with a challenge to understand how the council worked. Additionally OneSource also presented its own challenges.

As had been explained previously a key tool for Ernst & Young (EY) was their use of analytics. Unfortunately EY had experienced difficulty in downloading data from the Council’s systems. There had also been an issue with the treatment of school assets.

In 2 years’ time auditors would only have 8 weeks in which to complete the audit. They would need to start work earlier to meet the earlier deadlines.

The Committee had asked what plans were in place for next year.

A fresh challenge for 2016/17 would be the valuation of the Highways Infrastructure assets. The external auditors would be looking for the council to produce a template set of accounts as early as possible. They would look to start testing from month 9. The Chief Executive advised this would be a challenge for onesource as the assumption was that staff could be moved from one area to another to deal with peak workloads.

If the valuation of assets and the Pension Fund accounts could be completed early this would help.

The Committee had asked a number of questions and where officers were unable to provide a full answer it was agreed that a written reply would be provided to Members.

The Committee:

1.    Approved the Statement of Accounts confirming that no amendments to the accounts were required to be made to the accounts in respect of the items set out in the auditors’ report;

2.    Noted that the audited accounts must be published by 30 September 2016;

3.    Noted the amendments to the accounting policies arising from the audit of the accounts;

4.    Placed on record their thanks to both officers and the External Auditors for their hard work in finalising the Statement of Accounts on time.