Decision details

Report of the external auditors following their audit of the Council’s statutory accounts. It allows the Committee to review the issues raised and assess the management response.

6.1       The Committee considered a report by the Chief Operating Officer which presented the ISA260 report to those charged with governance, ahead of the report being presented to the Governance Committee.

6.2       Philip Johnstone and Scott Walker of external auditors KPMG attended the meeting to present the report and key findings including the unqualified “true and fair” audit opinion and value for money conclusion that the Authority has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources.  The external auditors thanked the Finance Team for their dedication in preparing the accounts, which were of a very high standard, ahead of schedule.  This assisted the smooth auditing of the accounts, and prepares the Council to meet the revised audit timescale requirements in future years. 

6.3       Philip Johnstone highlighted the following points:

o   There were no uncorrected or material differences to report.

o   One asset previously identified as surplus was still occupied, and so reported as an adjusted audit difference.

o   The need for departments to report accurately anything that might affect the classification in the Property Plant and Equipment (PPE) balance.

o   The key significant risks remain: accounting for local authority maintained schools; assuring the fair value of PPE; management override of control and fraud risk of revenue recognition. 

o   With regard to Value For Money, there remains an outstanding objection to the Bexhill Hastings Link Road, which it was hoped would be settled presently and the opinion issued on the 2014/15 accounts, and the Better Care Fund has been added as an area of work as the joint arrangements are new. 

6.4       The Committee discussed the following areas in detail:

Accounting for local authority maintained schools

6.5       The schools will remain on the Council’s balance sheet until such time as the Diocese of Chichester can conclusively establish ownership and register their title.  The research into title has been protracted owing to the nature of the records and their archiving. The Committee commented on the issue of ownership of school buildings built by the Council on land that it is subsequently established is owned by the Diocese.  

Reserves

6.6       The Committee discussed the distinction between Useable and Unuseable reserves.  It was clarified that Useable reserves, such as the Schools General Fund, were those earmarked for specific purposes.  Unuseable reserves are those that can only be used at the direction of the Secretary of State, such as for the settlement of equal pay claims.   

6.7       RESOLVED to (1) note the report and its appendices;

(2) confirm that there are no concerns arising from the Independent Auditor’s (KPMG) Report or the management response to it, that need to be brought to the attention of the Governance Committee; and

(3) record their thanks to the Finance Team for their work in assisting with the external audit.