Annual Audit Letter for the year ending 31 March 2018
Report of the External Auditors.
Kevin Suter, Executive Director, Ernst & Young began by saying this would be his last meeting as he would be handing over to Mark Hodgson for 2018-2019 Audit. He thanked Officers and Members for their support during his time.
He advised the purpose of the document presented to Members was to convey the results of the audit in a less formal form. It was aimed at the wider stakeholder audience and the public if they wished to engage. He advised there was no new information in the document.
Members attention was drawn to Section 6 which had been added as an illustration as to how audit was changing. Instead of random sampling of transactions it was more risk focussed. There was the ability to gather information in more detail, system journals could go out on a weekend but manual journals should not be done at weekends as they were done by Officers who work 9-5 weekdays. This was only made possible due to the progression in technology
It was highlighted to Members that Section 7 gave details of the new accounting standards being introduced this year. There were three new accounting standards which could delay the achievement of the deadline of July. Whilst the new revenue recognition scheme might not have a material effect on Local Authorities there would be a need to demonstrate why it does not apply. On page 45 the new leasing standard was explained. This is applicable in 2019-2020 but in this year’s account there was a requirement to make a disclosure about anticipated impacts so there was a need for the process to be done sooner.
Alison Chubbock, Chief Accountant and Deputy Section 151 Officer advised that work was in progress to review these new standards and she had no major concerns. IFRS 9 would not have great deal of impact as the Council invested in simple cash deposits with banks and building societies but a piece of work to show this would be done.
IRFS 15 again there were no issues with the Council’s own accounts but there was a potential adjustment to be done with the group accounts with Breckland Bridge. She reported the investigation had started and she was confident it would be straightforward.
IRFS 16 leases, she advised this did not apply to leases out to other people (so it didn’t apply to rental income from commercial tenants) it was only relevant when the Council leased from other companies, most of the Breckland leases were small value items for example photocopiers which may not be impacted by the new standard, but we are awaiting final CIPFA guidance.
Members were advised that the document would be published on the website.
The Chairman confirmed the Panel had considered the document and its contents and were happy for it to be published.
The Chairman thanked Kevin on behalf of the Committee for his unfailing good humour and support to the Committee and for producing the audit over three years. He wished him well for the future.