Agenda item

Report CSD21049

The Committee considered its draft work programme for the 2021/22 Council year, and discussed the following matters –

·  It was noted that there would be a review of the 2021 GLA election at the September meeting. It was suggested that the report needed to address the issue of the use of school premises as polling stations.

·  The report from Executive Assistants was, historically, submitted to the Committee’s February meeting to be considered along-side the Members’ Allowances Scheme. It was suggested that this should be moved to the March meeting as this was nearer to the end of the Council year.

·  There would be a report to the next meeting on 6^th July on arrangements for committee meetings – this would cover livestreaming. 

·  It was suggested that the Committee should consider whether Audit Sub-Committee should become a Committee in its own right, as with the Pensions Committee.

·  The Committee requested that a Licensing training/update presentation be arranged for their next meeting.

The Committee also received an update from David Dobbs, Head of Corporate Finance and Accounting, on the current position with regard to the audit of the Council’s accounts.

Objections to the 2016/17, 2017/18 and 2018/19 accounts had been made by one resident. These objections largely concerned the waste disposal contract, but also referred to utilisation of property on the Civic Centre site for the 2018/19 accounts. The objections were lengthy and detailed. The situation was further complicated by the change in external auditor from KPMG to EY for 2018/19 onwards. The accounts for these three years had been completed but could not be signed off in full until the external auditors had finished their investigations into the objections.  Officers had pressed for a speedy resolution of the issues, and KPMG had now engaged specialist legal advisors.

For the 2018/19 accounts, EY had found errors in the property valuations carried out by Cushman and Wakefield. Consequently, new valuations had been carried out by Montagu Evans and the accounts had been completed. However, during the audit of the 2019/20 accounts EY Real Estate had queried the methodology used by Montagu Evans in relation to the treatment of investment properties, which were re-valued annually on a market value basis, and Montagu Evans had been asked to re-value these properties. The deadline for completing the 2019/20 accounts was 31st October 2020; many Councils had missed the deadline due to similar issues with valuations – it was recognised that this was a national issue. The Council’s Finance Team were currently working on the 2020/21 accounts – the statutory deadline for publication of the draft accounts was 31^st July 2021.

In response to questions, Mr Dobbs explained that the options for the external auditor in relation to objections to the accounts were to take no action, to issue a report with recommendations or a public interest report, which would incur adverse publicity for the Council. The expected outcome was a report, but investigations were still on-going and could take many months to resolve. Officers would continue to press for the issues to be dealt with as quickly as possible – if changes were required to the numbers in the earlier accounts these changes would need to be worked through in subsequent accounts, though this was thought to be unlikely. The issues raised in relation to the Montagu Evans valuations were less serious than with the original Cushman and Wakefield valuations, and centred on detailed interpretation of the CIPFA Guidance.

There was further discussion in part 2.

The Chairman thanked Mr Dobbs for his clear and thorough explanation of the issues.

RESOLVED that the work programme and the situation with the Council’s accounts be noted.