Your Councillors

Agenda item

Final Statement of Accounts 2018/19

Minutes:

The Interim Head of Finance introduced his report setting out the findings of the External Auditor’s work on the 2018/19 financial statements audit and value for money conclusion.  It was noted that the audit process was nearing its conclusion and the amended Statement of Accounts attached at Appendix 2 incorporated audit adjustments and suggestions made by Members during the briefing session in June.

 

Ms James of Grant Thornton presented the External Auditor’s Audit Findings Report.  She explained that:

 

·  The External Auditor had received the draft financial statements by the end of May 2019 and a revised version in June as adjustments had been made to reflect a change in the treatment of income from Retained Business Rates and a late Rent Allowance Payment.  Work was ongoing and it was hoped that a conclusion would be reached the next day, but it was anticipated that an unmodified or unqualified audit opinion would be issued.

 

·  The rest of the report covered, inter alia, the risks considered during the audit work; the potential impact of the McCloud judgement on the pension fund net liability; and audit adjustments, including a technical adjustment relating to depreciation and the treatment of a revalued asset.

 

In response to questions:

 

Ms James said that discussions were ongoing regarding the potential impact of the McCloud ruling on the financial statements of local government bodies.  At Maidstone, management’s view was that the impact of the ruling was not material for the Council and would be considered for future years’ actuarial valuations.  The External Auditor was of the view that there was sufficient evidence to indicate that a liability was probable but was satisfied that there was not a risk of material error as a result of this issue.

 

The Director of Finance and Business Improvement said that:

 

He was aware of the potential for hospitals to claim back rates, but at the moment, it was considered to be a low enough risk not to have to make provision for it in the accounts.

 

In terms of the change in the Council’s current ratio (Current Assets: Current Liabilities) between 2017/18 and 2018/19, there was an unusual item in this year’s accounts which had pushed up the ratio. This was the figure for short term creditors which had increased from £14m to £23m.  This was because the Council was the administering authority for the Kent and Medway Business Rates Pilot 2018/19 and as at 31 March, the Council was holding cash that had to be distributed to other authorities.  This was one of the factors giving rise to a higher liability figure.

 

During the discussion, it was pointed out that the External Auditor’s Audit Findings Report had not been updated in all relevant sections to reflect the revised date for Brexit.

 

RESOLVED:

 

1.  That the External Auditor’s Audit Findings Report, attached at Appendix 1 to the report of the Director of Finance and Business Improvement, be noted.

 

2.  That subject to the issue of an unmodified audit opinion by the External Auditor, the amended audited Statement of Accounts, attached at Appendix 2 to the report of the Director of Finance and Business Improvement, be approved.

 

3.  That the Letter of Representation from the Council to the External Auditor, attached at Appendix 3 to the report of the Director of Finance and Business Improvement, be approved.

 

Supporting documents: