Agenda item

To present to the Committee the External Auditor’s Annual Audit Letter for the year ended 31 March 2018.

The Committee had before it a report (A.2) which presented the External Auditor’s Annual Audit Letter for the year ended 31 March 2018 which primarily summarised the outcomes from various audit activities undertaken during the year.

Members were reminded that the Accounts and Audit Regulations required that:

(1)    A committee must meet to consider the letter as soon as reasonably practicable;

(2)  following consideration of the letter in accordance with paragraph (1) the authority must—(a) publish (which must include publication on the authority’s website) the audit letter; and (b) make copies available for purchase by any person on payment of such sum as the authority may reasonably require.

It was reported that there were a number of different strands of external audit work undertaken during the year such as specific activity in relation to the financial statements and value for money opinion. The outcomes from those activities were reported to the Council separately as they were completed during the year. The Annual Audit Letter was effectively an end of year report for the Council which captured and summarised those outcomes in one document. It was primarily directed to Members but it must also be made available as a public document.

The Committee was informed that the Annual Audit Letter relating to 2017/18 had raised no significant concerns raised. Page 15 of the Audit Letter highlighted the general risks associated with financial resilience / sustainability, which were actively being managed within the Council’s long term financial sustainability plan. That action had also been recognised within the Annual Governance Statement and updates would be provided to the Committee over the course of the year, with the first one set out within the Table of Outstanding Issues Report elsewhere on the agenda.

Members were made aware that External Audit had highlighted three issues for consideration in the future which were set out on pages 21 and 22 of the Audit Letter. Those issues were:-

(1)    IFRS9 Financial Instruments;

(2)    IFRS15 Revenue from Contracts with Customers; and

(3)    IFRS16 Leases.

The Committee was advised that responses to those issues would form part of the work that would be undertaken in 2019 to close the Council’s accounts and produce the formal Statement of Accounts for 2018/19 by the required statutory deadlines.

Kevin Suter, Executive Director (Ernst & Young) referred to the fact that this was the last Annual Audit Letter that E & Y would be producing before the end of their contract. He thanked the Officers and the Committee for all their help, courteous consideration of E & Y’s recommendations plus the Council’s positive actions taken in response to those recommendations.

Richard Barrett, Head of Finance, Revenues and Benefits Services, on behalf of the Council, placed on record appreciation of E & Y’s work, help and advice. He also paid tribute to the excellent working relationship that the Council had had with E & Y.

Mr Suter informed the Committee that an additional audit fee of £646 had been agreed by the Public Sector Audit Appointments Ltd in relation to the audit of the Comprehensive Income and Expenditure Accounts.

It was moved by Councillor Alexander, seconded by Councillor Bray and RESOLVED that the contents of the External Auditor’s Annual Audit Letter for the year ended 31 March 2018 be noted.