Agenda item

The External Auditor submits a report with an overview of progress in delivering their responsibilities as external auditors.  The report also highlights the main technical issues which are currently having an impact in local government.  The Committee is asked to note the report.  

The External Auditor (KPMG) submitted a report for noting which provided Members of the Audit & Risk Committee with an overview of progress in delivering their responsibilities as external auditors. The report also highlighted the main technical issues which were currently having an impact in local government.

Adrian Benselin, Audit Manager at KPMG, presented the report. Members were asked to note KPMG had received the draft financial statements on 30^th June. An audit visit to consider financial statements was scheduled for 8^th August, and to date there were no matters that needed to be brought to the attention of Members.

Members were informed that external auditors had met with the Strategic Director, Education and Children’s Services on 27 June to discuss recent follow-up actions in response to the OFSTED inspection of Children’s Services. Further evidence to support progress being made was requested, which would be considered when the external auditors reached their conclusion on value for money (VFM).

Adrian highlighted the technical developments in the report and brought to the Committee’s attention areas they may wish to make further enquiries about.

The Committee raised concern over the EU Referendum and its effect on government grants to local authorities, and the fear that poverty would increase for the public. They were also concerned that a reduction in business rates would have an adverse impact on local authority budgets. The Director of Finance stated it was too early to speculate on the impact of Britain’s exit from the EU. She explained that European funding had in the past been granted with a vast range of criteria to meet, had been paid retrospectively and had been difficult to administer. She added it was anticipated that the government would produce a similar funding scheme for regeneration.

Members noted the publication of the Public Sector Audit Appointments Ltd (PSAA) work programme and scale of fees for the audits of the 2016/17 accounts of principle audited bodies. KPMG were asked to provide the Audit & Risk Committee Members with information on the responses of the City Council and other local authorities, in reference to the Government’s wish for pension assets to be pooled to reduce the number of pension schemes. Members were advised that staff pensions were at no lesser or greater risk, as the role of the pension manager was to protect the assets, but fund managers needed to be risk aware.

Members noted new HMRC rules effective from 6 April 2016, whereby a new exemption had been introduced for councillors’ travel expenses, which up to certain limits would be free of tax and National Insurance Contributions (NIC). Members asked the Director of Finance to confirm if the new rules would affect Councillors’ travel expenses.

RESOLVED:

That:

1.       the report be noted;

2.       the external auditors provide the Audit & Risk Committee Members with information on the responses of the City Council and other local authorities, in reference to the Government’s wish for pension assets to be pooled to reduce the number of pensions; and,

3.       the Director of Finance confirm if the new HMRC rules would affect Councillors’ travel expenses.