To receive the ISA 260 Report 15/16 (report of KPMG enclosed)
Consideration was given to KPMG’s report to those charged with governance (ISA260) for 2015/16. It summarised the key findings arising from their audit of South Holland District Council’s 2015/16 financial statements and their work to support their 2015/16 conclusion on the Authority’s arrangements to secure economy, efficiency and effectiveness in its use of resources.
The headline messages detailed within the report were as follows:
· Proposed audit opinion – KPMG anticipated issuing an unqualified audit opinion on the Authority’s financial statements by 30 September 2016. They would also report that SHDC’s Annual Governance Statement complied with guidance issued by CIPFA/SOLACE in June 2007.
· Audit adjustments – KPMG reported that their audit of SHDC’s financial statements had not identified any material adjustments and there were no uncorrected misstatements. They had agreed a number of minor presentational changes to the accounts with the finance team. Overall, the quality of the financial statements was very good, and KPMG wished to thank the finance team for their hard work in producing the accounts.
· Key financial statements audit risks – KPMG had identified one key financial statements audit risk relating to the provision for business rate appeals in their 2015/16 External Audit Plan issued in March 2016. They had worked with officers throughout the year to discuss that risk, and their detailed findings were reported in section 3 of the report. There were no matters of any significance arising as a result of KPMG’s work in this key risk area.
· Accounts production and audit process – KPMG received complete draft accounts by 30 June 2016 in accordance with the DCLG deadline. The accounting policies, accounting estimates and financial statement disclosures were in line with the requirements of the Code. The Authority had very good processes in place for the production of the accounts and very good quality supporting working papers. Officers dealt efficiently with audit queries and the audit process had been completed within the planned timescales. As in previous years, KPMG would debrief with the finance team to share views on the final accounts audit, and hopefully this would lead to further efficiencies in the 2016/17 audit process. KPMG wished to thank the Authority’s officers who were available throughout the audit visit to answer their queries.
· VFM conclusion and risk areas – KPMG had identified ‘financial resilience’ as a VFM risk as part of their VFM risk assessment. They had worked with officers throughout the year to discuss this VFM risk, and their detailed findings were reported in section 4 of the report. There were no matters of any significance arising as a result of KPMG’s audit work on this VFM risk area. 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 2016.
KPMG highlighted that the production of the accounts would need to be brought forward with a view to producing them by 31 May for 2017/18. This would need to be done whilst ensuring that the quality of the accounts was not diminished. It was reported that the Authority and KPMG were already working together to consider how this could be done, and would be bringing deadlines forwards for 2016/17 to test the new deadlines prior to them formally coming into effect for 2017/18.
The Interim S151 Chief Finance Officer commented that the findings within the report were excellent and she was pleased to see such good results achieved by all those concerned. The Committee echoed these sentiments and requested that their thanks and appreciation be conveyed to all officers involved.
a) That the ISA260 report for 2015/16 be noted;
b) That KPMG and SHDC work together to test deadlines for the production of accounts, in readiness for the new deadline of 31 May, effective for the 2017/18 accounts; and
c) That the views of the S151 Chief Finance Officer, and the thanks and appreciation of the Governance and Audit Committee be conveyed to all officers whose work had contributed towards the positive outcome of KPMG’s audit.