Agenda item

To consider the report of the external auditor.

The committee considered the external auditor’s (EY) audit results report for the year ending 31 March 2018.  EY tabled two updated pages to its report.  The committee noted the main messages:

·           The audit had not been completed in July due to insufficient information being available at that time;

·           However, EY’s audit of the councils’ 2017/18 Statement of Accounts had almost been completed and should be signed off on 28 September 2018;

·           EY was confident that it would do so, with both council’s accounts being given an unqualified opinion;

·           A disparity had been found in the valuation of the Vale’s property at the White Horse Leisure and Tennis Centre but this had since been rectified;

·           South Oxfordshire’s expenditure and income had been overstated as the expenditure reflected all costs payable to Capita and Vinci under the Five Councils Partnership and income included all reimbursements from the partner councils.  The council was acting as collection agent and therefore should only show its share of costs in expenditure;

·           Some audit differences had been found (set out on the amended page 21 of EY’s report), which management had chosen not to adjust in the accounts; the committee was comfortable that management had not corrected them as they were not material differences and would be corrected in time;

·           The accounts showed some deferred capital receipts, which were long leases; consideration would need to be given to how these were accounted for in future years;

·           When conducting the Payroll audit, EY discovered some cases where staff starter forms and termination forms had not been completed; this mostly related to short-term elections staff;

·           Some councillors had not completed their ‘related party transactions’ forms;

·           EY had given an unqualified opinion on the councils’ value for money audit; although significant risks had been identified in the Five Councils Partnership contract, EY had concluded that the councils were doing their best to negotiate the best possible value out of the contract and had put sufficient arrangements in place to get the best outcome. 

The committee called for a report on the reasons why the external auditors could not sign off the councils’ accounts in July and on what needs to be done to ensure this does not reoccur in future years.  This ‘lessons learned’ report and corrective plan should be compiled jointly by the councils and its contractor, Capita.  The committee asked for the report to be submitted to its meeting on 28 January 2019. 

The committee thanked EY for its report. 

RESOLVED: to

(a)      note the external auditor’s audit results report for the year ending 31 March 2018;

(b)      note that EY have given unqualified opinions on the councils’ Statement of Accounts audits and value for money audits in 2017/18; and

(c)       request the committee’s co-chairmen write to the leaders of each council to stress the importance of councillors completing their ‘related party transactions’ forms; and

(d)      request that a ‘lessons learned’ report and corrective plan be compiled jointly by the councils and its contractor, Capita, and be submitted to the committee meeting on 28 January 2019, on the reasons why the external auditors could not sign off the councils’ accounts in July and what needs to be done to ensure this does not re-occur in future years.