The report of the Deputy Chief Executive and City Treasurer is enclosed.

Members considered the report of the Deputy Chief Executive and City Treasurer which sought Members approval of the revised accounts containing the amendments detailed in the report and to seek approval and acknowledgement of the letter of representation. These accounts were updated from those reported to the June Committee and took account of any changes that have arisen since that time including the findings of external audit.

The Committee received a paper containing revised changes to the Group Accounts. The changes would be subject to consideration by the external auditors before the opinion on the annual account was released.

The Deputy Chief Executive and City Treasurer made a statement to the Committee regarding the annual accounts. The Committee was informed that nationally there have been some changes to how local authority external audits have been completed, this has included:  

·         The accelerated timescale for completing the audited accounts deadline set for 31 July.  

·         The Financial Reporting Council requirement for external audit firms to focus on areas where there are judgements and estimates, e.g. asset valuations and the additional assurance being sought in this area. 

·         The ‘McCLoud judgement’, which led to all local authorities having to get their accounting position for the pension fund (IAS19) recalculated at additional cost to take into account a potential additional liability relating to an age discrimination issue on the transitional arrangements in the judges and fire service pension scheme.  The LGPS is outside of this ruling but may be impacted in the future so an estimate of the additional liability was required. This has resulted in additional work. With reference to the Council’s accounts, this was not material and the accounts have not been adjusted.

Reference was made to a reduced capacity within external audit firms following the recent tender exercise and associated reduced fee. This reduction has impacted on a lot of local authorities and has been reported nationally. 

Locally this had translated into:

·         Changes to IAS19 (reporting on employee benefits) - these are not material and no adjustment has to be made.

·         The Council’s external auditors have had to significantly increase the sample size for valuations.  This was notified later on in the audit and the work to review these has not been fully completed prior to the latest revised accounts being issued.  In view of this, however, it is not believed there are any material issues outstanding, but this is subject to confirmation by the external auditors.

·         With regard to the Group Accounts - there is also an issue with the land valuations carried out in respect of the airport assets. This does not impact on the council's or the airports bottom line position, although some adjustments were required and included a restatement of prior year figures. A further adjustment was made, after the revised accounts were issued and confirmation is required.

The Committee were informed that there has been a great deal of pressure on the Finance Team to complete the outstanding work in time for the Council to meet the  ...  view the full minutes text for item 34