To receive the Audit Commission’s report on the findings of the 2011/12 audit.

The Committee received the Audit Commission’s Annual Governance Report for 2011/12.  The report summarised the findings from the 2011/12 audit and included the messages arising from the Commission’s audit of the Council’s financial statements together with the results of the work undertaken to assess the Council’s arrangements to secure value for money in the use of its resources.

The District Auditor (Audit Commission) worked through the report, drawing Members’ attention to various points as he did so.  Under Key Messages, and with regard to the financial statements, he stated that he expected to issue an unqualified audit opinion by 30 September 2012.  He commented on the helpful and quick manner of Central Bedfordshire officers in responding to queries and to the good quality of the working papers supplied, all of which had contributed to the audit being delivered in a timely way.  The meeting noted that the officers had agreed to amend the accounts with regard to all but two of the errors identified during the audit.

Under Table 2 of the report headed ‘Risks and Findings’, and with specific reference to the risk and finding relating to schools, a Member sought the Audit Commission’s view on the Council’s practice of including voluntary controlled school buildings in its balance sheet at nil value on the basis that they were owned by the Diocese.  In response the District Auditor stated that the Commission had accepted the Council’s position though it would expect the Council to review its stance in the light of any relevant changes to CIPFA’s Accounting Code of Practice.  He also commented on the possibility that Ernst & Young, as the Council’s new external auditor, could take its own view on this matter.

Moving next to the risk and associated finding relating to Section 106 Agreements the District Auditor referred to an issue raised with him claiming that Central Bedfordshire Council had spent section 106 monies on an unadopted road.  He stated that, whilst the relevant documents confirming the adoption of the road by the legacy authority, Bedfordshire County Council, could not be found, those for the adoption of the adjacent footpath had been.  The District Auditor had decided that it was therefore reasonable to assume that the County Council had adopted the road and this stance reflected a legal ‘presumption of regularity’ in that it was presumed that, in certain circumstances, a public authority had acted lawfully unless it could be shown that it had not.   On the basis that there was no evidence that the County Council had not adopted the road and some evidence to suggest it had he had determined that the money spent on the road by Central Bedfordshire Council had been spent lawfully.

Turning to the qualitative aspects of the Council’s accounting practices set out under ‘Other Matters’ the District Auditor drew the Committee’s attention to the work undertaken by both Central Bedfordshire and Bedford Borough Councils on resolving the differences on the balances for debtors and creditors between the two authorities.  The meeting noted that the debtor balance between in the Central Bedfordshire Council financial statements with Bedford Borough Council had been agreed and that there was a difference of less than £100,000 on the creditor balance that Central Bedfordshire Council had with Bedford Borough Council.

The meeting expressed its appreciation of the efforts made by the officers in preparing the financial statements.

NOTED

1          the Audit Commission’s Annual Governance Report on its findings on Central Bedfordshire’s audit for 2011/12 and the issue of an audit report by the Commission containing an unqualified opinion on the financial statements and an unqualified conclusion on the Council’s arrangements to secure economy, efficiency and effectiveness in the use of its resources  (value for money);

2          the adjustments to the financial statements as set out at Appendix 3 to the Annual Governance Report.

RESOLVED

1          that the District Auditor’s recommendations within the Annual Governance Report, as set out at Appendix 6 (Action Plan), be approved and adopted;

2          that, in recognition of the work undertaken by the officers in the preparation of the financial statements, the Audit Committee formally records its appreciation of their efforts;

3          that, in recognition of the work undertaken by the officers in connection with the Pension Fund Panel, the Audit Committee formally records its appreciation of their efforts;

4          that, further to resolutions 2 and 3 above,  the Executive Member for Corporate Services be requested to formally thank the officers for their efforts at the next meeting of the Executive.