To receive a report from the Executive Director, Resources
Matt Bowmer, Interim Director Finance & Commercial introduced the report.
1. There is now additional resource; with the Interim Chief Accountant and interim Deputy Chief Accountant in place. This has provided reassurance and confidence that the Council will work positively through audit and alongside BDO.
2. Recruitment still remains a challenge the Council has been unable to recruit a permanent Chief Accountant as the applicants were not of the right quality. However, one of the applicants has accepted the role of Deputy Chief Accountant on a permanent basis.
3. In terms of sickness in the office in the first wave of Covid there was no one in the finance team off with Covid. However, in the current wave the Head of Corporate Finance is off with Covid.
4. There are two main focus areas on the audit; work on the Prior Period Adjustments (PPA) a detailed working paper is being pulled together for BDO and this is on course to be with BDO on the 18 January; and the second focus is working through outstanding queries.
5. The pension accounts are nearing completion, there is just one adjustment that BDO are looking at. The Pension Fund accounts will not be signed off until the full audit of the main accounts is completed.
6. Clarification was provided on the wording in paragraph 10 of the agenda report under the timelines mentioned here the draft accounts should be with BDO on the 30 June 2021.
7. It was mentioned that there are still five related party disclosures outstanding, these should have been signed off with the draft accounts at the end of July 2020.
8. Overall good progress is being made and the expectation is that the work will be completed by mid-March.
Questions, comments and queries raised
· How does the progression on the 2019/20 accounts affect the progress on the 2020/21 accounts and timeline impact of not recruiting all the staff? Officers advised that ideally would not still be working on the 19/20 accounts. However, there is a Deputy Chief Accountant leading and working on the planning for the closure of the 2020/21 accounts. Whilst we were unable to recruit a new Chief Accountant the Deputy was a months’ notice and will be joining the Council at the start of February. This bolsters the overall resource. There has been a closedown workshop with the whole of the finance team, looking at what went well and what did not go so well for 2019/20. It was emphasised here that the number one priority for the team is the closedown of the 2019/20 accounts and delivering the 2020/21 accounts are on time.
· In the past some of the posts recruited to left the council quite quickly. What is the notice period for the staff who have now started? The interim posts have three month rolling contracts. Both new interims who have come in are working really well with the team and it is believed that they will be here for the duration. For the interim chief accountant role this will be not only for the 2019/20 accounts but the preparations and the audit of the 2020/21 accounts.
· What is the impact on financing with BDO when our accounts are late? Officers advised that where audit extended, and additional audit resources are needed to support the audit this will have an impact on fees to BDO. BDO advised that there is a core scale audit fee set by PSAA there were some proposed variations to reflect changes in quality standards. If BDO require more resource to complete the audit, then there will be extra costs. An update was provided before Christmas that this overrun had already reached between £30-£35k at that point. This additional amount will be subject to approval by PSAA prior to payment. In terms of resourcing BDO did originally have enough resource to provide audit had it been completed at the agreed time. Resources have not had to be pulled from other work for Enfield’s audit. It should be noted that nationally only 45% of local government accounts were approved and audited by the end of November.
· Reassurance was requested on processes in place particularly regarding SAP, chart of accounts and valuations. Officers advised that changes to processes have already started in the current year having a far more rigorous approach to reconciliations and the underlying accounts during the year. At the whole finance team workshop one of the key areas discussed was getting things right first time; the quality of the working papers, how the finance team coordinates more effectively, how the papers are handed over to BDO and are complete and right first time, so that the papers do not come back once handed over the first time. SAP is the main financial system which is financially sound and robust as a system. However, it is difficult to extract data from in a timely manner the team will need to consider getting this information earlier than has been done in the past, effective planning for this this was discussed at the workshop. Chart of Accounts work was undertaken for the 2019/20 accounts and a trial balance can now be taken from this. Valuations in general are in hand but need to work through the PPA work first. BDO confirmed that valuations work is ongoing, and this is very much linked into the PPA and how the different valuations have been treated. BDO have the technical paper on Meridian Water valuations and this is being worked through at present. Critical for closedown is not just what the council does in terms of its direct preparation of the accounts it is also making sure that the valuer produces information on time.
· Given the issue with valuers are ongoing can the council find new valuers? Officers advised that in the process of commissioning valuers for 2020/21, there has been frustrations over their timeliness. Ideally for continuity the same firm of valuers carrying out this work over the five-year cycle of valuations for the accounts.
· If valuers have not produced for 2 years in a row is there any penalty for not delivering. If the job is not done well enough this year will the Council look elsewhere? Officers advised that there is a massive overall of approach to HRA positions going from 24 to over 400. The work that the valuers have been asked to undertake for this financial year 2019/20 has been really significant. Mindful of comments that members have members and performance will be considered going forward. Now that the resources of the close down team have been strengthened there will be more resources available to chase queries.
· Councillor Laban stated the valuer must deliver and if they do not deliver again this should go to the Cabinet Member.
· Regarding statistical sampling of 15,000 properties is 400 the right amount for valuations. Officers advised that it is about having representative parts of the overall population on which to base your valuations as long as appropriative representative properties included then this will be more than adequate. BDO confirmed that as long as there are sufficient beacons to represent the wider population the intention is that you multiply up. They confirmed that undertaking 400 with the very detailed level of architype that have been used this year does provide a good and thorough basis for that.
AGREED to note the report updating on the Audit of the 2019/20 Statement of accounts.