Decision details

To approve the audited Report and Financial Statements for the financial year 2011/12.

1.  That the Report and Financial Statements for the financial year 2011/12, including the Schedule of Adjustments and the Letter of Representation, all attached as Appendix A to the report of the Head of Finance and Customer Services, be approved.

2.  That the Officers be requested to submit a report to the next meeting of the Committee setting out a suggested formal response to the Management Letter from the external auditors.

In July 2012 the Committee received the un-audited Report and Financial Statements for the financial year 2011/12.

The audited 2011/12 Report and Financial Statements from the external auditors are attached as Appendix A to the report of the Head of Finance and Customer Services together with the Schedule of Adjustments, the Management Letter and the Letter of Representation.

The accounts must be approved and signed before they are submitted to the Charity Commission by 31 January 2013.

Accounts 2011/12

Following their examination of the Report and Financial Statements,

King & Taylor, the external auditors, recommended a number of changes, which have now been incorporated into the audited version and are detailed in the Schedule of Adjustments shown as part of Appendix A to the report of the Head of Finance and Customer Services.

There were three adjustments in total, two of which are of a minor nature.  The other adjustment relates to the Will Trust income from the Cobtree Charity Trust Ltd.  The draft accounts showed a figure of £22,188.  However this was understated and the correct figure should have been £45,922.  The adjusted figure takes into account prior year adjustments which were not included in the draft accounts.  These arose due to timing differences as the Will Trust income is not normally received until after the draft accounts have been submitted for audit.

The adjustments mean that the sum due from Maidstone Borough Council to the Charity known as the Cobtree Manor Estate has increased from £82,175 as per the draft accounts to £103,277.  Now that this sum has been confirmed payment will be made as soon as possible.

The Letter of Representation and the Management Letter also form part of Appendix A to the report of the Head of Finance and Customer Services.

The Letter of Representation seeks confirmation of a number of statements relating to the audit and the information supplied to the external auditors during the course of their audit.

The Management Letter draws attention to various points of interest that the external auditors have identified.  Comments on the points are set out below:-

·  The level of reserves is high at the moment, but this sum is required to fund the Master Plan, which is now being implemented, so it can be demonstrated to the Charity Commission that the Charity is not accumulating excessive reserves.

·  Monitoring procedures were in place during 2011/12, although this does not appear to have been recognised during the course of the audit.

·  At present there is no requirement for the accounts to be formally audited by a registered auditor, but historically, the Council acting as Corporate Trustee has chosen to have a formal audit.  Based on the current statutory audit thresholds, the Council acting as Corporate Trustee could still elect to have an independent examination rather than a formal audit, but this option may not be available in the future if the statutory thresholds are exceeded.

It is the intention to respond formally to the Management Letter, and a draft response will be submitted to the next meeting of the Committee for approval.

There are no alternative actions as it is a requirement that the accounts, the Letter of Representation and the Schedule of Adjustments be approved by the Council acting as Corporate Trustee of the Charity known as the Cobtree Manor Estate and signed by the Chairman of the Committee prior to their submission to the Charity Commission.