Agenda item

Grant Thornton Audit Findings Report

The Committee is asked to note the report.

Minutes:

Liz Cave, 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 2017. 

 

The new timeline for the production and audit of the accounts were discussed by the Committee.  It was noted that officers had produced the accounts two months earlier than in previous years, which had taken a great amount of effort.  Liz Cave explained that the earlier production of the accounts had enabled a smoother audit process and allowed time for officers to provide detailed explanations when applicable. She added that there were very few amendments to the accounts, which were deemed to be good and a positive step forward.  As such Grant Thornton was in a positive position to sign the accounts. 

 

Members appreciated the expertise, hard work and effort of the finance team in compiling the early accounts and agreed they should be congratulated on their exceptional effort.  The Chief Financial Officer explained her team’s position in preparing a complex set of accounts and the effort that had gone into producing the earlier set of accounts.  The Chairman reiterated members’ appreciation and also wished to extend thanks to Grant Thornton on behalf of the Committee. 

 

Liz explained that Grant Thornton was unable to issue a value for money conclusion at this stage until they had considered an objection relating to the energy from waste scheme.  In response to a question, it was noted that officers were compiling a response to Grant Thornton in relation to the objection. 

 

The Committee were informed that based on the work completed to date, Grant Thornton expected to issue an ‘except for’ value for money conclusion due to the recent Ofsted Inspection which found the Council’s Children’s Services inadequate.

 

Members requested that at a future meeting, the Committee could revisit the concept of value for money and discuss the issues further.  The Director of Strategic Finance agreed to take this action away and discuss with Grant Thornton.  David Bray, Grant Thornton explained that the definition of ‘Value for Money’ was set by the National Audit Office.

 

Members were informed that overall materiality was determined to be £15m. 

 

The Committee discussed the Audit Findings in relation to the significant risks. 

Grant Thornton explained that there were no issues identified that would change the presentation of the local authority statements.  Liz explained that Grant Thornton were not qualified to judge adult or children’s services and referred members to page 40 of the report, which detailed Ofsted’s findings and conclusions.  The Committee were also referred to page 50 which detailed the action plan, in relation to the Ofsted report.  

 

In response to a question, the Director of Strategic Finance explained that the Pension Fund was undergoing major changes, as legislation required LGPS pension funds to pool.  It was noted that Gloucestershire had become a member of the Brunel Partnership, however the Pension Committee and Board would still be maintained with their current responsibilities.  The only change would be that the Pension Committee would no longer be appointing and managing fund managers. 

 

Members were informed that in the future new fund managers would be appointed by the Brunel Partnership and not the Pension Committee.  It was reiterated that this would not impact on the accounting side or the accountability of the Gloucestershire LGPS.  Members were informed that the transitioning of assets should be complete by 2023, with the Brunel Partnership Fund totalling approximately £25b.    

 

Grant Thornton explained that the narrative report for the 2016-17 financial statements was comprehensive and met the requirements of the code.  The report was deemed to be clear and informative.  It was noted that during the inspection period of the accounts, members of the public could raise questions with the auditors only within that 30 working day period.

 

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 2016/17 was £98,010. 

 

Members were concerned that it was not possible to give a value for money conclusion, due to an objection which some members felt appeared to be politically motivated.  Some members questioned the validity of the objection, it was suggested it could be decisive.  Members asked if they could see the objection, the Director of Finance explained that the objection was submitted to Grant Thornton and therefore it would be their decision.  It was noted that the outcome of the investigation would be reported at the October Committee meeting.   

 

RESOLVED

 

That the report be noted.

 

AUDIT FINDINGS: PENSION FUND REPORT

 

David Bray, Senior Manager, 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 2017. 

 

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 total indicative fee for the audit for 2016/17 was £23.799.

 

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.

 

The Director of Strategic Finance added she had great pride in the Finance and Pensions team’s and their ability to achieve the challenge set in producing an earlier set of accounts for the County Council and the Pension Fund. Members also wished to record their appreciation and congratulated the team on their hard work and efforts. 

 

Resolved

 

That the report be noted.

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