Agenda item

A report was considered which provided the Committee with an update on changes made to the Statement of Accounts since the unaudited version was presented to Members on 13^th June 2019.

M Thomas thanked S Tompkins, A Mumford and S Ahmed who had been instrumental in working to a tight schedule to pull together the draft accounts and deal with all the fieldwork questions from EY, and also to the rest of the team for their support with regard to the audit and the accounts.

He also thanked EY who, in their first year, had been very professional and thorough and also to E Walker for reviewing the draft accounts.  E Walker was due to stand down as a Statutory Officer in due course and had delegated authority to M Thomas to sign off the accounts at the MCA meeting on the 29^th July 2019.

As mentioned earlier, subject to the Committee’s agreement or otherwise, the Group accounts should be caveated with the fact that the PTE’s Audit and Risk Committee were due to meet on Tuesday 16^th July, so the accounts were subject to their endorsement of the PTE’s accounts.  M Thomas would be asking the Committee today to recommend the Group accounts to the MCA on 29^th July 2019.

There had been four adjustments in total, two on the PTE side and two on the CA side.

The adjustments to the PTE accounts (and therefore the group accounts) were:

Revaluation reserve – this acknowledged that the 2017/18 accounts contained a substantial error which was now being corrected.

Adjustment to the balance sheet - this was due to a directive from South Yorkshire Pensions Authority who had been instructed by their auditors to take the full actuarial assessment of pension liabilities for all local government bodies within South Yorkshire; this had to be done as a result of the outcome of the McCloud court case.  This would lead to an increase of approximately £750k.

With regard to SYITA Properties Ltd, which was now almost liquidated, in 2017/18 PWC had advised that it was appropriate to make an adjustment to the accounts in relation to this.

However, EY’s view was that the adjustment was premature and a further adjustment had been made to the accounts to reflect this.

The final adjustment was in relation to a Skills Bank grant.  £1.1m should have been transferred to a reserve account but was wrongly held as a receipt held in advance.  This had now been corrected.

D Spiller presented EY’s audit results report.

He drew the Committee’s attention to the risks that had been identified previously in the audit planning report which had been presented in April; particular attention had been paid to these areas.

There had been two changes to the scope of the audit:

• The approach to the testing of PFI balances had been updated to include the account as a higher inherent risk.
• The materiality assessment had been changed from £3.351m to £2.956m

EY had substantially completed the audit of the financial statements, the outstanding items were listed in the report.  Subject to satisfactory completion of these items EY expected to issue an unqualified opinion on the Authority’s financial statements.

With regard to value for money, EY had considered the Authority’s arrangements and had not identified any significant risks.

D Spiller went through each area of audit focus giving brief details of the work completed; no significant issues were reported.

In relation to property, plant and equipment, testing had found that with regard to one asset, SYPTE did not appear to have documentation that adequately confirmed ownership.  Since the report had been produced, officers had provided sufficient information to show that the PTE did own the property in question.

With regard to audit fees, it was confirmed that a scale variation fee would be issued for work performed relating to SYITA Properties Ltd.

The Chair asked whether there were any plans to reduce the pensions deficit.

M Thomas replied that this issue would be considered when preparing the Medium Term Financial Strategy.

The Committee considered the proposed letter that confirmed Audit & Standards Committee’s oversight of management processes and arrangements.

The Committee confirmed that it was happy for the Chair to sign the letter.

RESOLVED – That the Committee:

i)          Notes the changes made to the Statement of Accounts.

ii)         Commends the amended Statement of Accounts to the MCA for formal adoption, subject to the outcome of the meeting of the PTE’s Audit and Risk Committee on 16^th July 2019.

iii)        Notes that the Section 73 Officer would delegate authority to the Deputy Section 73 Officer to sign the accounts at the MCA on 29^th July 2019.