To present for approval the 2012/13 Statement of Accounts for Central Bedfordshire Council and the letter of representation to the external auditors.

The Committee considered a report by the Chief Finance Officer which presented the 2012/13 Statement of Accounts for approval.  The meeting was aware that the Accounts and Audit Regulations 2011 required local authorities to approve and publish their annual accounts together with the audit opinion and certificate by 30 September following the end of the financial year. 

In addition, auditing standards required an authority’s external auditor to obtain appropriate written representation from the council about the financial statements and governance arrangements.  The Committee was also asked, therefore, to approve a draft letter of representation to its external auditors, Ernst & Young LLP.

A copy of the annual accounts was attached at Appendix A to the report and a copy of the draft letter of representation to Ernst & Young at Appendix B.

Members were reminded that, as required by the 2011 Regulations, the Chief Finance Officer had certified the 2012/13 annual accounts in June.  A presentation on the annual accounts had been made to the Audit Committee and other Members at its last meeting on 24 June (minute A/13/55 refers) followed by a period of public inspection which had closed on 2 August.  The annual accounts had also been subject to an external audit validation by Ernst & Young and the resulting Audit Results Report, which formed item 8 on the meeting agenda, was considered immediately following the Chief Finance Officer’s report.

The Chief Finance Officer advised the meeting that any changes made to the annual accounts had been minor and had not required any material adjustment to the original Statement of Accounts.  The balance of General Fund Reserves was unaltered.  The audit had identified one error and this related to the reversal of a prior year adjustment.  The Ernst & Young Director present confirmed that this error did not affect the General Fund balance.

The Committee then turned to consider the Audit Results Report from the Council’s external auditor, Ernst & Young.  The report summarised the findings from the now completed 2012/13 audit and included the message arising from Ernst & Young’s audit of the Council’s financial statements and the results of work undertaken to assess the Council’s arrangements to secure value for money in its use of resources.

The Ernst & Young Director worked through the report highlighting various matters of note.  He advised the meeting that the external auditor was now in the final stages of its audit work and was checking amendments.  In connection with that part of his report dealing with audit risks in arrangements to secure economy, efficiency and effectiveness the Ernst & Young Director referred to the Council’s position in the lowest (worst) 10% of its nearest statistical neighbours for the average number of days taken to process both new claims and changes in circumstances for housing and council tax benefits.  In addition he referred to the number of cases in the last three years where benefits had been assessed incorrectly.  However, the Ernst & Young Director stated that he was also aware of the Council’s efforts to address these issues and was satisfied with them.

In response to a query by the Chairman regarding the Council’s position in the Value for Money profile the Chief Finance Officer commented on the need for caution as the manner by which the information was presented by local authorities had a major impact on how it could be interpreted.  He added that the last four years had seen a dramatic improvement in the time taken to process claims (falling from 55 to 19 days) despite a 26% increase in workload the previous year and another 20% increase in the current year.  Further, the workload increase, which had been mirrored nationally, had seen deterioration in the performance of other local authorities.  The Ernst & Young Director commented that, whilst he acknowledged these developments and that the Council’s direction of travel was positive, the number of processing errors remained high.  He also confirmed that he expected to issue an unqualified audit opinion on the Statement of Accounts and the Value for Money conclusion prior to 30 September.

A Member raised a number of questions over the Council’s use of a particular contractor and the employment of interim staff from that contractor.  He thanked the Chief Finance Officer and other staff for the additional information supplied prior to the meeting but expressed the view that the possibility existed that the current employment arrangements regarding consultancy staff could give rise to potential issues for the Council.  In response, the Chief Finance Officer explained that there was no requirement to disclose payments made to individual suppliers within the accounts.  Following discussion the Chief Finance Officer suggested that a review should be conducted of the relevant Council procedures.  The review would be conducted by the Head of Internal Audit and Risk.  The Committee welcomed this suggestion.

RESOLVED

1          that the 2012/13 Statement of Accounts for Central Bedfordshire Council, as set out at Appendix A to the report of the Chief Finance Officer, be approved;

2          that the draft Letter of Representation, as set out at Appendix B to the report of the Chief Finance Officer, be approved for submission to the Council’s external auditor, Ernst & Young LLP, and that the Chairman of the Audit Committee and the Chief Finance Officer be authorised to sign it;

3          that the Audit Committee record its thanks to the officers for the work undertaken in the preparation of the Statement of Accounts;

4          that the Head of Internal Audit and Risk carry out a review of Council procedures relevant to the employment of contractors and consultancy staff.

NOTED

the Audit Results Report from Ernst & Young LLP setting out the results of its 2012/13 audit.