To receive from BDO (external auditors) a progress report on the external audit to 31 December 2017.
RECEIVED from BDO (external auditors) the Audit Progress Report to 31 December 2017.
1. This was the progress report of the audit for 2016/17.
2. As detailed at page 16 of the report, there is an outstanding item against the Whole of Government (WGA) work. The work had been completed and was awaiting David Eagles (BDO) to sign it off either way.
3. In respect of the Audit Certificate (as detailed at page 18 of the report), there are still ongoing objections work that needs to be resolved before BDO can issue their Audit Certificate.
4. BDO are currently working on the 2017/18 Statement of Accounts and the Pension Fund Accounts. They had made an early start on these so that the faster close deadline requirements can be met. These are the end of July 2018 for the Audit and the end of May 2018 for the finance team.
5. This year’s audit had been re-engineered so that BDO are auditing in 2 batches. The finance team had given reports and information up to the end of November 2017 which equates to the 1st 8 months of the financial year. These are being audited now over the next few weeks. BDO would then come back and do the last 4 months to the financial year end, in time to achieve the July 2018 deadline.
6. The following questions and responses raised in response to the report:
a. BDO would be aiming hard to try and complete the objections to the 2016/17 accounts and to close these down by end of January 2018. The objections were being investigated at present.
b. The Chair asked about the earlier completion date for the 2017/18 accounts and if BDO were confident that they would reach the July 2018 deadline. Andrew Barnes (BDO) clarified that they were engaging with finance officers in a different way and that they would be doing their very best to achieve the earlier close down date. BDO have had a head start and 2/3 of the work had already been completed and are in a stronger position. James Rolfe further clarified that the project management activity had already been started and officers are engaging with BDO, commissioning valuations and monitoring deadlines and timescales.
c. The Chair questioned what had happened with the valuations information for the 2016/17 accounts and that the valuations contract had been sub-contracted out. Was there anything the Council could do about that and was there now more control as regards sub-contracting. James Rolfe clarified that officers are working closely with the valuer’s, as it has been sub-contracted again, due to different types of property valuations. Officers are seeing valuer’s, partners and senior partners on a regular basis to make sure they are fully aware of the need to receive valuations information on time.
The valuations were about receiving them in on time including the supporting information. The contract is sub-contracted because of lack of expertise with some of the valuations.
d. Councillor Hurer questioned the tender for valuations and why the selected valuer, was not investigated to see if they could carry out all the required valuations. If they couldn’t and they sub contracted due to lack of expertise, could the council not cancel the contract and penalise the valuers. Then find another firm who had all the expertise. James Rolfe clarified that the sub-contracting was all done with the Council’s knowledge. However, they didn’t provide the information required within the required timescales but was escalated quickly enough to do something about it. This was a common problem in the property industry. It is a simple task which is made difficult. Every property company seems to do this and the council had tried a range of them in the past i.e. local valuers and national companies.
e. Councillor Hurer stated that with regards to the issuing of the Audit Certificate for 2016/17 accounts, there were only 2o days left to investigate the objections. If the council could not resolve these then would the council need to qualify or was it not material enough to qualify. Andrew Barnes (BDO) clarified that it was not material enough to qualify. It was just a legal requirement to close everything down before the Audit Certificate is issued.
7. The Chair thanked Andrew Barnes (BDO) for his report.
AGREED to note the progress report on the external audit to 31 December 2017.