Agenda and draft minutes

Audit and Risk Management Committee
Thursday, 4th July, 2019 7.00 pm

Venue: Room 1, Civic Centre, Silver Street, Enfield, EN1 3XA. View directions

Contact: Metin Halil 

Items
No. Item

173.

WELCOME AND APOLOGIES FOR ABSENCE

Minutes:

Councillor Bedekova (Chair) welcomed everyone to the meeting.

 

Apologies for absence were received from Councillors David-Sanders and Akpinar

Apologies for lateness was received from Councillor Demirel

 

Councillors’ Vince and Leaver attended the Committee meeting as observers.

 

Simon Allin (Enfield Independent) was also in attendance.

 

There was a Member training session held on Monday 1st July 2019 regarding the Statement of Accounts.

174.

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:

Councillor Gunawardena declared a non-pecuniary interest as he is a Director of Enfield Norse Limited.

175.

UNAUDITED STATEMENT OF ACCOUNTS 2018/19 pdf icon PDF 1 MB

To review and consider the draft Statement of Accounts 2018/19 in advance of the final (audit) statement being submitted for consideration and approval at the next meeting on 25 July 2019.

 

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 by the 28 June 2019, if possible.

 

 

Minutes:

RECEIVED the draft 2018/19 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 25 July 2019.

 

NOTED

 

1.    Matt Bowmer (Interim Director of Finance) introduced the report.

2.    The purpose of the meeting is for the committee to scrutinise and review the 2018/19 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. Councillor Gunawardena had sent a list of questions to officers and these were tabled along with the responses. This was an opportunity for members to ask questions of officers.

Councillor Barry also e-mailed some questions through, but these were not received by finance officers. The Chair clarified that if members had any more questions, regarding the accounts, these should be sent to Metin Halil (Committee administrator) by the 12 July 2019 deadline.

4.    Councillor Barry’s questions regarding the draft accounts were addressed and responded to by officers, including Councillor Gunawardena’s questions. These questions will be appended to the minutes of this meeting along with the tabled questions/responses from Councillor Gunawardena.

5.    Tim Harlock (Interim Chief Accountant) began clarifying the narrative report (pages 5-15 of the report), which is an explanation of the main financial statements. There was also a member training session on Monday 1 July 2019 where finance officers also went through the financial statements.

6.    Councillor Barry’s questions were responded to as Tim Harlock went through the draft accounts.

Councillor Barry’s questions:

·         Page 6 of the draft accounts - the Meridian Water development.

Tim Harlock clarified that nothing had been set in stone at this stage and effectively, all that has happened is that the Council had chosen its development partner. Finance officers would re-word the paragraph beginning ‘The first phase of the £6Billion Meridian Water development,.

·         Page 8 of the draft accounts – regarding Enfield’s population. Matt Bowmer clarified that it was quite common that this information is within the narrative statement. Officers could add some wording to introduce this information regarding the population of the borough.

·         Page 11 of the draft accounts – regarding short term deposits.

Tim Harlock clarified that as there is no certainty, it is appropriate to keep short term deposits. So, the Council makes decisions to keep cash on a short term basis in case something happens and it needs cash very quickly. It is a good position to be in if you are not sure what the bigger picture will be.

·         Page 11 of the draft accounts – regarding net borrowing. Paul Reddaway (Head of Finance Pensions Investments) clarified that this is quite well explained in the Capital outturn report. It means that borrowing is increasing after Finance consider the investments the  ...  view the full minutes text for item 175.

176.

BDO - UNAUDITED STATEMENT OF ACCOUNTS 2018/19 - VERBAL UPDATE

To receive from BDO (external auditors) a verbal update on the draft Statement of Accounts 2018/19.

Minutes:

RECEIVED from BDO a verbal update on the unaudited statement of accounts 2018/19.

 

NOTED

 

1.    The update was introduced by David Eagles (BDO).

2.    Pension Fund – BDO were virtually complete with this work. There were still some residual issues, but which are nearly complete. However, BDO were still having to deal with issues relating to the McCloud judgement. The judgement related to the governments change to pension schemes with a landmark ruling that pension reforms discriminated against younger workers by protecting the retirement benefits of older staff. This was an issue being judged for judges and firefighters. However, it is expected to extend to the rest of the public sector aswell.

This equates to some extra costs for the council and that there will have to be an adjustment for a calculation for whether there needs to be an adjustment to the accounts based on that. Paul Reddaway clarified that there was an agreement with BDO that the council would change the accounts and reverse the actuary back and recalculate the pension liability so as not to hold up the accounts in any way.

3.    The main Council Accounts – David Eagles provided a short analogy on how BDO were dealing the 2018/19 accounts audit. Finance officers were a team of skilled experienced builders and the BDO team were electricians. A lot of planning had been done to get the teams to work together to finish the project.

Both teams had planned to have a complete set of walls in place by the beginning of June, so that the electricians can come in and complete wiring up. The electricians have had a chance to do some testing on the walls to make certain that they are the right size and in the right place. In order that they can come in and do a clean job with the wiring up.

What had happened, partly because of delays of materials coming through to the builders, in terms of valuation reports not coming through on time is that when BDO came in at the beginning of June 2019, not all the walls were built. So, there was a lot of frantic work done to get those last things put together.

In specific terms, the first set of accounts BDO had at the beginning of June did not include the group accounts. That was produced by the 10 June 2019. Initial assessment work from BDO’s side on the preliminary review identified a grossing up issue whereby some costs had been double counted. That has been adjusted down by £100m which has had a big impact on some of the figures that are used for their audit.

There have been delays in getting valuation reports through even after we had all planned to make certain these were available for BDO’s interim work but they had not come through for the interim phase.

Some of the documents that had come through have not been what was expected. For example, Meridian Water valuations had  ...  view the full minutes text for item 176.

177.

DATES OF FUTURE MEETINGS

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

 

Thursday 25 July 2019

Thursday 17 October 2019

Thursday 16 January 2020

Thursday 5 March 2020

 

 

(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:

 

Wednesday 28 August 2019

Thursday 17 October 2019

Thursday 16 January 2020

Thursday 5 March 2020

 

 

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