Issue - decisions

The committee received a report from the Director of Resources seeking approval of the 2012/13 Statement of Accounts.  The report included the Audit Results Report from the Council’s external auditors,  Ernst and Young (EY), setting out details of their work, findings and conclusions regarding the 2012/13 Accounts

In response to a question from Councillor Herbert, Mark Hodgson, the Council’s external auditor, confirmed that the value for money aspects of the audit had been undertaken in accordance with the Code of Audit Practice, having regard for the following two criteria (as published by the Audit Commission in November 2012):

-        The authority has proper arrangements for securing financial resilience.

-        The authority has proper arrangements for challenging how it secures economy efficiency and effectiveness.

However, there was an obligation for auditors to take into account previous Audit Commission criteria around good governance. The report therefore reported an exception in respect of significant weaknesses in the Councils arrangements for ensuring appropriate internal controls in the preparation of the 2013/14 budget.

In response to questions from Councillor Herbert, Mr Hodgson confirmed the following:

       i.          Whilst EY had been notified of a breach in the Council’s systems of internal control, it was not the role of external audit to monitor the figures on a day to day basis.

     ii.          The initial overstatement by the Council in the valuation of property assets of £6.065m related to the classification of certain social housing properties designated for redevelopment - which resulted in a need for those properties to be valued on a different basis.

In response to a question from Councillor Pitt regarding the audit fees, Mr Hodgson confirmed that £18,000 of the proposed final audit fee related to the Phase 1 work in identifying the issues, and £21,000 related to the additional work as requested by the Council.

In response to a further question from Councillor Pitt it was noted that the external auditors were comfortable with the City Council’s Action Plan to address the issues, but had not yet revisited the implementation of the Plan.

Resolved (by 3 votes to 0) to:

       i.          Approve the Statement of Accounts for the year ending 31 March 2013.

     ii.          Authorise the Chair of the meeting to sign the Letter of Representation and audited Statement of Accounts for the financial year ending 31 March 2013 on behalf of the Council.