Minutes:
Committee considered a report from MAZARS, the Council’s external auditors.
The purpose of the report was to summarise MAZARS audit conclusions on the Council’s accounts ending 31st March 2021.
MAZARS audit work was substantially complete, however, there were some areas of work that were still in progress and these were summarised in section 2 of the report.
MAZARS would provide an update in relation to any significant matters identified in section 2 as outstanding through their normal follow up letter.
Audit opinion – MAZARS anticipated issuing an unqualified opinion on the Council’s financial statements. Their proposed audit opinion was included in Appendix B to the report.
Value for Money - whilst MAZARS were yet to complete their work in respect of the Council's arrangements to secure economy, efficiency and effectiveness in its use of resources, MAZARS anticipated having no significant weaknesses in arrangements to report. Further detail on MAZARS Value for Money work was provided in section 7 of the report
Whole of Government Accounts (WGA) - MAZARS had not yet received group instructions from the National Audit Office (NAO) in respect of their work on the Council’s WGA submission so were unable to commence their work in that area until such instructions had been received.
Wider powers - the 2014 Act required MAZARS to give an elector, or any representative of an elector, the opportunity to question the accounting records of the Council and to consider any objection made to the accounts, however, no approaches from electors had been received by MAZARS.
Pension Liability – part of MAZARS assurance over the net pension liability was derived from specified procedures commissioned from the external auditors of the Derbyshire Pension Fund. The final report for MAZARS consideration and completion of the testing required had now been received and there were no issues of concern.
Covid 19 Grant recognition – the Government had provided substantial sums of financial support to local authorities. However, there existed a lack of clarity in the expected accounting treatment of this income source and therefore, MAZARS had identified the completeness and accuracy of this income as a risk.
To address the risk, MAZARS had reviewed the Council’s approach in determining whether grants;
· were or were not ring fenced for specific areas of expenditure;
· tested grant income recorded in the ledger to grant allocations/notifications,
· and reviewed a sample of grants to ensure conditions to recognise the income in 2020/21 had or had not been met.
There were some residual audit queries to clear but audit procedures had not identified any material errors or uncertainties in the financial statements or other matters to bring to Members attention.
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Land, Buildings and Investment Property Valuations – MAZARS would be meeting on site with the Council’s Valuer with regard to ‘uncertainty’ in his current report regarding Covid19 in relation to valuation of assets.
MAZARS were pleased to report that there were no internal control weaknesses or adjustments to bring to Members attention and no material misstatements had been identified during their audit work to date.
MAZARS noted their thanks for the assistance of the financial team during their audit work.
A Member queried if the surge in property prices increasing the valuation of property would impact on the Council’s housing stock and put the Authority in a more favourable position going forward. Mike Norman (MAZARS) replied that in March 2020, valuation of the Council’s housing stock was market based with reference to sales activity – RICS - asset value increasing strengthens the value of the Council’s balance sheet.
In valuing the Council’s property for the accounts, there were a lot of accounting adjustments, and in local government statutory overrides existed to prevent any impact on the tax payer.
Moved by Councillor Tom Munro and seconded by Councillor Graham Parkin
RESOLVED that (1) the report be noted,
(2) the Chief Financial Officer signs the appropriate Audit Letter.
(MAZARS/Chief Financial Officer)