The Committee is asked to note the report.
Pete Barber, Engagement Lead, Grant Thornton presented the report which informed the Committee of the key matters arising from the audit of Gloucestershire County Council’s financial statements for the year ended 31st March 2019. An addendum which detailed the revised fees was circulated at the meeting (Appendix C, a copy is attached to the signed minute book).
It was explained that there were three material adjustments considered within the wider context of the report. The most significant material adjustment related to the McCloud ruling. Members were advised that the Court of Appeal had ruled that there was age discrimination in the firefighter’s pension scheme and transitional protections were given to scheme members. In response the Council had adjusted its materiality level to £20.1 million within its final accounts.
Mr Barber explained that Grant Thornton was still unable to issue a value for money conclusion at this stage due to the outstanding objection on the Council’s energy from waste scheme. Grant Thornton would finalise the Value for Money Opinions for 2016/17, 2017/18 and 2018/19 once the work on the objection had been concluded.
The Committee was informed that Internal Audit and Grant Thornton had ongoing dialogue throughout the financial year. Grant Thornton confirmed that the accounts had been prepared in accordance with the accounting code of practice. The total indicative fee for the audit for 2018/19 was £117,239. It was noted the fee increase was due to the additional audit work undertaken, however the fees were subject to Public Sector Audit Appointments (PSAA) approval.
During the discussion one member suggested that the savings from the energy from waste scheme, as in £100m over the 25 year life of the contract should be included as a significant risk, as the information on the savings weren’t actually available yet. The Section 151 Officer explained that detailed work by Ernst & Young and Grant Thornton had been carried out in order to assess the savings. In addition it was noted that 98% of last year’s saving target of £20million had been achieved and officers were keen to deliver the predicted savings.
Some members raised concerns in relation to the value for money judgement and felt they were not privy to the ongoing situation in relation to the objection and legal challenge and requested an exempt session at a later date to discuss the issues. One member suggested that this information should be shared with all 53 County Councillors.
Mr Barber added that in terms of procurement law the energy from waste objection would be going to court in March 2020. Grant Thornton was happy to engage with Councillors subject to a consultation with John Gregory from Grant Thornton who was dealing with the objection. Members agreed this would be an agreeable way forward. (Action PB/PB)
It was noted that Grant Thornton had issued an unqualified audit opinion and the Committee welcomed this news. Members appreciated the expertise, hard work and effort of the finance team in compiling the accounts and agreed they should be congratulated on their exceptional effort. The Chairman reiterated members’ appreciation and also wished to extend thanks to Grant Thornton on behalf of the Committee.
That the report be noted.
AUDIT FINDINGS: PENSION FUND REPORT
Peter Barber, Engagement Lead, Grant Thornton presented the report. The report highlighted the key issues arising from the audit of Gloucestershire Pension Fund financial statements for the year end 31st March 2019.
Members were informed that Grant Thornton had identified no adjustments that affected the Funds reported financial position. It was anticipated that an unqualified opinion would be issued on the funds financial statements. It was noted that the audit fee of the Pension Fund for 2018/19 was £18,325 plus an additional fee of £1,500 in respect of the additional work carried out assessing the impact of McCloud.
In response to a question, members were advised that the Gloucestershire Fire & Rescue Service (GFRS) Scheme was unfunded and there was no impact on the Pension Fund.
The performance of the fund was the responsibility of the Pensions Committee. It was noted that the auditors did not provide a separate value for money conclusion on the Pension Fund.
That the report be noted.