Agenda and draft minutes

Audit and Risk Management Committee
Thursday, 5th July, 2018 6.00 pm

Venue: Room 2, Civic Centre, Silver Street, Enfield, EN1 3XA. View directions

Contact: Metin Halil 

Items
No. Item

659.

WELCOME AND APOLOGIES FOR ABSENCE

Minutes:

Councillor Bedekova (Chair) welcomed everyone to the meeting.

 

Apologies for absence were received from Councillors Daniels and Needs.

Apologies for absence were also received from Jeremy Chambers (Director of Law & Governance), Christine Webster (Head – Internal Audit & Risk Management) and Jayne Fitzgerald (Head of Corporate Finance).

 

Councillor Hass Yusuf would be taking his place on the Audit & Risk Management Committee after the Council meeting on the 19 July 2018. Councillor Yusuf would be replacing Councillor Gina Needs.

 

A private member training session took place before the meeting with Finance Officers providing an ‘Introduction to the Statement of Accounts’ before the start of the meeting (30 minutes).

660.

DECLARATION OF INTERESTS

Members of the Committee are invited to identify any disclosable pecuniary, other pecuniary or non - pecuniary interests relevant to items on the agenda.

Minutes:

There were no declarations of interest.

661.

DRAFT STATEMENT OF ACCOUNTS 2017/18 pdf icon PDF 2 MB

To review and consider the draft Statement of Accounts 2017/18 in advance of the final (audit) statement being submitted for consideration and approval at the next meeting on 26 July 2018.

 

A copy of the Draft Statement of Accounts is attached.  Members are asked to focus their consideration around i) the Narrative Report, ii) Core Financial Statements iii) Notes to the Core Financial Statements iv) Housing Revenue Account v) Group Accounts. Where possible, Members are asked to provide advanced notice of any queries or comments they may have on the Draft accounts to ensure a response can be provided at the meeting.

 

These should be forwarded to Metin Halil at metin.halil@enfield.gov.uk

 

 

Additional documents:

Minutes:

RECEIVED the draft 2017/18 Statement of Accounts in advance of the final statement being submitted for consideration and approval at the next Audit and Risk Management Committee meeting on 26 July 2018.

 

NOTED

 

1.    Fay Hammond (Director of Finance) introduced the report.

2.    The purpose of the meeting is for the committee to scrutinise and review the 2017/18 Statement of Accounts, so as to feel comfortable at the next meeting, to sign and agree those accounts.

3.    The report was presented a couple of weeks ago and finance team had asked for questions in advance which they could respond to. Some questions had been received in advance and these would be appended at the end of these minutes.

4.    On the 26 July 2018, it would be time for members to agree the draft 2017/18 statement of accounts. There was a comprehensive briefing/induction, provided by Roy Baker (Assistant Head of Finance), on the statement of accounts ahead of the committee meeting itself.

5.    In response to Fay Hammond’s request for any additional questions or comments, the following were discussed:

a.    At the last meeting, a question regarding pension valuations was raised, in terms of the estimates provided by fund managers and what the actual figure was for those estimates. Paul Reddaway (Head of Finance Treasury Management) clarified that the pension fund had 22 fund managers and a private equity manager, who reports the complex nature of the valuations over 4 months. With the earlier close down of the accounts, the council have some of those valuations estimated.

On the 31 December 2017, the team took all the purchases and net sales to the end of the financial year and worked with the manager to estimate whether there had been any change to the market, from that time. The final report would be received by all before the end of the audit and if there are any material differences between the report and the predicted accounts, then the team would look at that to see if there are any material changes.

b.    Councillor Leaver asked why the pension fund valuations & estimates took so long. Paul Reddaway clarified that fund managers would provide the team with the valuation of their fund as at 31 December. This information was provided to the committee in early May. The team then take all the purchases and sales from the 1 January till the end of March. They are then all added together, with the valuation, for the 31 March. Fund managers are held to account and explain how these type of assets are funded. External audit investigate that the team have made a fair and reasonable assumption on the valuation.

c.    Valuations came from the fund manager and the auditor would go to the fund manager, independently of the council, to get a valuation. This process took 4 months because it was quite a normal timeline for that type of asset. Councillor Leaver felt that the reporting timeline of when the council has to produce  ...  view the full minutes text for item 661.

662.

BDO - PROGRESS REPORT pdf icon PDF 64 KB

To receive from BDO (external auditors) a progress report on the external audit.

(TO FOLLOW)

Minutes:

RECEIVED from BDO a progress report on the External Audit for the year ending 3 July 2018.

 

NOTED

 

1.    The report was introduced by Andrew Barnes (BDO).

2.    Members’ had asked, at the last meeting, for the report to be sent to them, in a ‘to follow’ agenda, by the 3 July 2018. In terms of how BDO were progressing through the audit process up to the end of July deadline.

3.    BDO have a detailed delivery plan that is being used to manage the audit process.

4.    Some slippage had been caused against the delivery plan, because of the main issue that was reported at committee, in respect of valuations of Property, Plant and Equipment (PPE). There were some challenges getting explanations from the valuers.

The valuers have provided reports to the Council and they have been used to prepare the financial statements. As part of BDO’s audit, they are required to review those reports to ensure that they have been properly prepared and that they will produce the appropriate results to put into the financial statements. In doing so, this had raised some questions and queries on their work. BDO were now currently awaiting responses to their questions from the valuers that would satisfy them.

5.    BDO also have other independent information which gives them an idea of what they would expect the Council’s financial statements to look like. BDO have a meeting arranged with the valuers on the 6 July 2018, which will hopefully satisfy them in terms of the approach taken by the valuers and the conclusions they have drawn. However, if BDO need to ask more questions then that is the course BDO will take.

Last year, this process had taken a while to happen, however the meeting on the 6 July 2018, is something different from last year and would enable BDO to resolve issues more quickly this year.

6.    The following issues & queries raised in response to the report:

a.    Councillor Savva agreed that hopefully BDO would receive responses to their enquiries from the valuers. But was there a Plan B as time was now limited. Andrew Barnes clarified that there was still a couple of weeks left and it all depended on how quickly the valuers responded to questions/queries. David Eagles (BDO) further clarified that their plan of action is for them to have pieced everything together by the 20 July 2018. BDO would not need to sign the accounts until 31 July 2018, which is the statutory deadline. So there was some room to manoeuvre still for the Council to achieve its earlier close of accounts deadline.

b.    Councillor Leaver wished to know if they were council valuers or were appointed by the council and if they were the same valuers as last year. Andrew Barnes confirmed that they were valuers appointed by the Council and they were the same valuers used last year.

c.    Councillor Leaver asked what BDO’s concern was in terms of the valuers responses, the  ...  view the full minutes text for item 662.

663.

DATES OF FUTURE MEETINGS

To note the dates agreed for future meetings of the Audit & Risk Management Committee:

 

Thursday 26 July 2018

Thursday 18 October 2018

Thursday 10 January 2019

Thursday 7 March 2019

 

 

(All meetings to commence at 7.00pm unless otherwise agreed.)

 

Minutes:

To note the dates agreed for future meetings of the Audit & Risk Management Committee:

 

Thursday 18 October 2018

Thursday 10 January 2019

Wednesday 6 March 2019

 

 

(All meetings to commence at 7.00pm unless otherwise agreed.)