The Director of Corporate Services presented the Report on the Audited Accounts 2016/17, and highlighted the additional information in the Supplementary Agenda. She explained that the introduction of the Council’s new financial system in February 2017 had delayed the delivery of some information to the External Auditors, with the result that that the External Audit was not yet complete, specifically the Bank Reconciliation, the Working Papers and issues related to school PFIs. Concerns regarding next year’s deadline for the close of accounts on 31.7.18 had been discussed with the External Auditors. This year an additional fee had been charged as a result of the extra work.  The Director of Corporate Services reported that additional work had been identified as necessary to bring the working papers to the standard required by the auditors. She assured the Committee that next year the new system should make processes easier.  In response to a member question on the risk of fraud caused by the late bank reconciliation, The Director of Corporate Services assured Members that the Council was always mindful of fraud and worked with the Auditors to prevent this.

The External Auditors presented their report to the Committee and confirmed that they now had the bank reconciliation information and would be able to finalise the audit the day after the Committee. They asked the Committee to note that once all the outstanding matters were completed they expected to issue an unqualified audit opinion on the accounts 2016/17. They outlined the timetable that they and the Council would work to in order that the early deadlines of close of accounts for 2017/2018 were met and said they were pleased with the positive response they had received from the Council’s Financial Managers.  They explained that although the introduction of the new financial system had caused delays to this year’s accounts, they were now content that the issues would be solved before next year’s accounts.

In response to Members questions the External Auditors felt that the new system was necessary as the old system had limitations, was unsupported and did not support all of the External Audit analytical tools. The Director of Corporate Services explained that whilst the timing of the introduction of the new system was not ideal, there had been other factors that influenced the decision at that time.

The Committee noted that The Pension Fund Advisory Panel had just met, and the external Auditors were content with the accounting for the Pensions Fund.

Members asked questions seeking clarification on technical details of the accounts report. The Committee noted that the decision to sell the Wimbledon Car Park P4 had been put on hold when the original winner of the tender withdrew, but a sale could be pursued again as this decision has already been made. Members asked that the table at page 267 be provided in larger size next year. Members noted that there is a typographical error on page 9 table 2 of the report and that the table on page 22 shows the correct data.

Members requested that the Director of Corporate Services report back to the next meeting of the Committee with an update on all issues currently outstanding and any issues relating to the early closing of accounts in 2018.

The Committee agreed the recommendations contained in the report but the Chair agreed that he would sign the letters from recommendation 5 and 6 once the External Auditors were satisfied that all work was complete.

RESOLVED

1. That Committee approve the audited Statement of Accounts, including the Pension Fund Accounts (Appendix 2), subject to any further comments from the External Auditor.
2. That Committee note any comments made by the Pensions Fund Advisory Panel regarding the Pension Fund Accounts.
3. To note EY’s Audit Results Report (Appendix 4) for the Pension Fund accounts under the International Standard on Auditing (ISA) 260.
4. To note EY’s Audit Results Report (Appendix 3) for the Statement of Accounts under the ISA 260.
5. That the Chair signs the Statement of Responsibilities for the Statement of Accounts (Appendix 2, page 154) when the audit was complete.
6. That the Chair signs Letters of Representation (Appendices 3 and 4) for the Statement of Accounts and Pension Fund Accounts when the audit was complete.