Agenda item

ISO260 Report 2013/14

To consider the ISA260 report 2013/14 (formerly known as the Annual Governance Report) of the Council's external auditor (report of KPMG enclosed).

 

Minutes:

Consideration was given to KPMG’s report to those charged with governance (ISA260) for 2013/14.  It summarised the key findings arising from their audit of South Holland District Council’s 2013/14 financial statements and their work to support their 2013/14 conclusion on the Authority’s arrangements to secure economy, efficiency and effectiveness in its use of resources (VFM conclusion).

 

The headline messages detailed within the report were as follows:

 

·         Proposed audit opinion – KMPG anticipated issuing an unqualified audit opinion on the Authority’s financial statements by 30 September 2014.  They would also report that the wording of SHDC’s Annual Governance Statement accorded with their understanding.

·         Audit adjustments – KPMG reported that their audit of SHDC’s financial statements did not identify any material adjustments.  The Authority made a small number of non-trivial adjustments, most of which were of a presentational nature.  There was no impact on the General Fund.  KPMG raised one recommendation arising from their work, that in the future, the Authority needed to ensure that componentisation of property, plant and equipment was undertaken.

·         Key financial statements and other audit risks – KPMG reviewed risks to the financial statements on an ongoing basis.  They had worked with Officers throughout the year to discuss the specific risk areas for this year’s audit.  The Authority addressed the issues appropriately.

·         Accounts production and audit process – The Authority had good processes in place for the production of the accounts and excellent quality supporting working papers.  Officers dealt efficiently with audit queries and the audit process had been completed within the planned timescales.

·         Control environment – The Authority’s organisational control environment was effective overall, and no significant weaknesses in controls over key financial systems had been identified.

·         Completion – At the date of the report, KPMG’s audit of the financial statements was complete.  Before they could issue their opinion, they required a signed management representation letter.  KPMG confirmed that they had complied with requirements on objectivity and independence in relation to this year’s audit of the Authority’s financial statements.

·         VFM conclusion and risk areas – KPMG had concluded that the Authority had made proper arrangements to secure economy, efficiency and effectiveness in its use of resources.  They therefore anticipated issuing an unqualified VFM conclusion by 30 September 2014.

 

In KPMG’s External Audit Plan 2013/14, presented to the Committee in February 2014, key risks and other audit issues affecting the 2013/14 financial statements were identified.  Subsequent to this, an additional risk had been identified around the accounting for the business rate retention scheme.  Testing in these areas was now complete and evaluation set following the substantive work:

 

·         LGPS Triennial Valuation – As part of the audit, it was confirmed: that the Authority had obtained an independent actuarial valuation; that the underlying data submitted to the actuary for this purpose was complete and accurate; that the assumptions underpinning the actuarial valuations had been reviewed by management and found to be reasonable; and that the IAS19 figures in the accounts agreed to the information provided by the actuary.

·         Business rate retention scheme – KPMG had reviewed the Authority’s accounting treatment for business rates and confirmed that it was in line with the CIPFA guidance.

 

The Executive Director (Place) commented that the results of the auditors’ report were very good, and that great credit should be given to the Senior Finance Analyst and his team of officers, and to the Finance Manager (S151). 

 

AGREED:

 

That the ISA260 report for 2013/14 be noted.

Supporting documents: