Agenda item

To consider the Audit Commission’s annual governance statement 2010/11. 

The committee considered the Audit Commission’s draft annual governance report 2010/11.  Maria Grindley introduced her report. 

The committee noted that it had a responsibility to approve the statement of accounts by 30 September each year.  The committee could rely on the external auditor to test that the statement of accounts was correct.  The Audit Commission had found that the overall process in compiling the accounts was sound and robust, subject to assurances. 

The main message for the council was that this was the first year it had to present its accounts in line with the new international reporting standards.  Most councils had struggled with the complexities of the new format.  For this council, there were only a few minor corrections.  The officers had corrected the final version of the statement of accounts. 

Maria Grindley reported two amendments to her draft report.  The first was to remove the requirement on the council to include pension costs in the gross expenditure.  The second was that there had been an overstatement in the income and expenditure account relating to the grounds maintenance contract.  This needed recording in the correct place but it had no effect on the bottom line of the account. 

One recommendation from the Audit Commission required the council to have an audit trail to show correct property valuations.  The committee noted that the officers had followed the correct procedure but had not recorded the valuation correctly.  The committee asked that the officers introduced the correct audit trail, as set out in the action plan appended to the Audit Commission’s report. 

The committee was pleased to note that the Audit Commission had given an unqualified opinion to the statement of accounts.  The committee thanked all officers involved in preparing the statement of accounts. 

The committee was asked to agree to the chairman and the chief finance officer signing a letter of representation.  The letter to the Audit Commission confirmed that the council had:

• complied with statutory authorities – the council had not acted beyond its powers
• provided all supporting records to the auditor
• informed the district auditor of any fraud or suspected fraud
• complied with all laws, regulations, contractual arrangements and codes of practice
• ensured that all accounting estimates included fair values
• disclosed all related party transactions
• disclosed all subsequent post balance sheet events

The committee noted that despite reminders, four former councillors had not completed a related party transactions disclosure in April 2011.  The Audit Commission was content that the council had made every effort to obtain this information and accepted that the former councillors had no transactions to record. 

The committee agreed to the chairman signing the letter of representation to the Audit Commission.  

RESOLVED: to

(a)               note the adjustments in the financial statements (appendix 1 to the Audit Commission’s annual governance report 2010/11);

(b)               note that the Audit Commission gave an unqualified opinion to the statement of accounts 2010/11;

(c)               approve the letter of representation for signature by the chairman and the chief finance officer on behalf of the council, before the Audit Commission issues its final opinion and conclusion; and

(d)               agree the action plan (appendix 4 to the Audit Commission’s annual governance report 2010/11).