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 external auditors EY had submitted their ISA 260 report to the Committee at the beginning of the week. Officers had some issues with the report and had contacted EY who had responded by issuing an amended ISA 260 report. It was the amended report that was presented to the Committee for consideration.

EY had substantially completed their audit of the financial statements of the Council. One issue which had delayed matters was a failure by banks and financial institutions to confirm the receipt of bank, borrowing and investment confirmations. This had finally been completed on 27 September 2016.

EY had indicated that there was a significant delay in the issue of the Whole of Government Accounts (WGA) template that the authority needed to complete. As a result the deadline for completion and audit of the WGA template had been extended to 21 October 2016.

It was stated that EY would not be able to issue their audit certificate closing the 2105/16 audit until they had completed their work on the Council’s Whole of Government Accounts. They would conclude their work before the 21 October deadline and report any significant findings to the Council in their Annual Audit letter.

Members noted that EY had identified one unadjusted audit difference within the draft statements which management had chosen not to adjust as management consider it to be immaterial, both individually and in the aggregate, to the financial statements taken as a whole.

The Committee had considered and approved managements’ rationale as to why the correction was not made.

Two other issues were raised by EY:

·         The Council had used an internal valuer to undertake the valuation of certain property assets in 2015/16. The audit work had identified that the Council had not issued formal instructions to its valuer.

·         In testing expenditure EY had noted that the transactions recorded in the adult social care system were not reconciled to the general ledger.

In response management had indicated:

·           The requirement had been well established for a number of years and they were clarified verbally on an annual basis. They accept that these instructions should be documented and this matter would be incorporated within the 2016/17 timetable.

·           Management were seeking a response from the department concerned, however, they understood that the reconciliations were being undertaken and steps would need to be taken to ensure that these were evidenced for 2016/17 closure and audit purposes.

The Committee noted the contents of the EY Report to Those Charged with Governance (ISA 260), the draft letter of representation and management’s response.

A second Report to those Charged with Governance (ISA 260) was also issued in respect of the Havering Pension Fund accounts. No issues were raised.

The Committee noted the contents of the EY Report to Those Charged with Governance (ISA 260) and the draft letter of representation.

The EY representative had indicated that they would be issuing an unqualified opinion on the accounts and on the value for money conclusions.