Agenda item

Consideration was given to a report which summarised the findings of the External Auditor on the audit of the 2012/13 Statement of Accounts.

The Deputy Director of Strategic Finance reported that there was an overall decrease on the Balance sheet of £40.2m which had been mainly caused by the writing out of £38.4m of community schools as a result of them acquiring academy status.

Deloitte reported that, subject to completion of some minor procedures, an unmodified opinion would be given and the Statement of Accounts would be given a ‘true and fair’ view. In addition an unqualified conclusion would be issued on the Council’s arrangements for securing value for money.

Deloitte reported that the audit process for 2012/13 was efficient and rigorous and commenced in June and was carried out by auditors familiar to Hillingdon which required less officer input and time.

Reference was made to a number of significant audit risks where no significant issues had been identified by Deloitte.

Issues raised by Members on the identified audit risks were as follows:

• Risk Management and Internal Audit Control Systems – Reference was made to the Council’s Capital Budgeting process and Deloitte’s comment that a capital monitoring system should be designed which was risk focussed and highlighted where projects were not progressing against agreed milestones. The Director of Finance reported that the issue was around how much time and effort was put into Capital Budgeting and that most Capital works were tied to school years and not to the financial year. Officers were working closely on financial year phasing for Capital Budgets.
• Audit Committee Terms of Reference – Reference was made to Deloitte’s comment regarding recommending that the Council reviews the CIPFA guidance around the right of access to individuals for Audit Committees. Members noted that the Audit Committee had to work within the rules of the Constitution of the Council and the impact of the changes brought about by the changes in the Committee’s Terms of Reference could be evaluated in the annual review of this Committee’s effectiveness which would take place at the end of this Municipal Year. The Chairman noted that the change would thus affect the whole of the current financial year, and may be referred to again by Deloitte in their 2014 Audit Report.
• Annual Governance Statement (AGS) – A revised AGS was circulated at the meeting. Discussion took place on paragraph 18 of the AGS, particularly in relation to the recent changes which had been made to the Audit Committee’s Terms of Reference. The Chairman considered that the Committee was no longer independent, and it was agreed that paragraph 18 be amended to read “”An independently chaired Audit Committee” rather than “An independent Audit Committee”.
• Google Apps – Mail archives and back ups – Concern was expressed at this oversight which had since been rectified. It was noted that Internal Audit would be carrying out a review in this area.
• Pensions Schemes Basis of Estimation – Concern was expressed at financial assumptions in relation to the significant reduction in the discount rate used by the actuary for the LPFA Pension Fund for 31 March 2013. It was agreed that an explanation for this be emailed to Members.

RESOLVED -    

1.        That the Committee considered and approved the Statement of Accounts for 2012/13, subject to the amendment made to the AGS.

2.  That the Auditors findings and adjustments as outlined in Appendix 1 to the report be noted.

 3.   That officers be congratulated for presenting an excellent Statement of Accounts.