1.    INTRODUCTION AND BACKGROUND

1.1     One of the responsibilities of this Committee is to approve the annual Statement of Accounts.

1.2     We have previously reported to you changes to the Local Audit and Accountability Act which will come into effect for the 2017/18 Statement of Accounts and will have an effect on the review and approval process.

1.3     The impact of these changes means that the timetable for producing, auditing and signing off the Statement of Accounts has been accelerated.  The changes are summarised in the table below:

Table 1: Key dates for signing off 2016/17 & 2017/18 accounts

1.4     Given the reduced timeframe, it will not be practical for a draft version of the accounts to be formally considered by the Committee, which represents a change to the current process.  There is no legal requirement for the Committee to review the draft accounts prior to approving the final version, although in the past it has been considered useful to allow early consideration of the draft document by Committee members.  Plans are in place to accommodate this through an informal briefing session for members to be held in June.  In addition, the draft accounts will be available on the Council’s website and for inspection by the public from 31 May onwards.

1.5     Members will also note that the external auditors will commence their work on 9^th July, in advance of the meeting of the Audit, Governance and Standards Committee to approve the accounts on 30^th July.  It has not been possible to bring forward the start date of the audit, as Grant Thornton are heavily committed at this time of year.  Grant Thornton will be carrying out early audit testing in March in order to reduce the volume  of work to be carried out at the final audit.

1.6     As the audit will still be in progress at the agenda deadline date, it is likely that the External Auditor’s Audit Findings report will be presented as an urgent update to the agenda for the July meeting, in order to ensure that this includes the most up to date information that may be of use to members in considering their decision to approve the accounts.

1.7     The Statement of Accounts is a complex document, and table 1 above illustrates that meeting the revised statutory deadlines will present a significant challenge for MBC officers as well external audit staff.  However, substantial efforts have been made in order to ensure that we are well prepared to meet this challenge, with the draft 2016/17 accounts being produced well in advance of the June deadline last year.  Further measures that have been implemented in order to streamline the process and ensure that deadlines are met include:

-      A review of the Statement of Accounts document, to declutter and remove any unnecessary sections.

-      Rationalisation of management’s approach to producing accounting estimates, including a change in the property valuation date to 31 January.

-      Changes to the operational timetable for producing the draft accounts to shift certain tasks to earlier in the year where possible.

-      Briefing taken to the Wider Leadership Team to raise awareness of revised deadlines and pressures on the finance team during April and May.

-      Training sessions with budget managers and administrative staff to highlight the importance of meeting key deadlines around the year end.

-      Liaison with third parties who provide information required for the financial statements to ensure that this will be supplied within the agreed timeframes.

-      Officer attendance at workshops and training sessions, and learning from good practice shared by peers from other local authorities who are already working to these deadlines.

-      Working closely with the external auditor to agree treatment of complex transactions and balances, and to ensure that supporting information and working papers provided will facilitate swift completion of audit testing in July.

-      Completion of early audit testing scheduled by the external auditor for March, detailed further in the audit plan which is also on the agenda for this meeting.

-      Changes to the timetable for meetings of the Audit, Governance and Standards committee to accommodate the July deadline for approving the accounts.

1.8     It is hoped that acceleration of the closure process will enable finance staff to dedicate more time to in-year financial management.

2.        AVAILABLE OPTIONS

2.1     This report is for information and is intended to assist the Committee in discharging its responsibilities in relation to external audit and the Statement of Accounts.  The Committee is recommended to note the contents of the report.

3.        PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

3.1     The Committee is asked to note this report.  Following the changes to the statutory timetable, it is considered appropriate to provide a summary of the Council’s response at this point in time.

4.       RISK

4.1     This report is presented for information and there are no decisions that would give rise to risk management implications. 

5.       CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

5.1     No consultation has been undertaken in relation to this matter.

6.       NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

6.1     Next steps are outlined in the table at paragraph 1.3 above.

7.       CROSS-CUTTING ISSUES AND IMPLICATIONS