Agenda item

To receive the ISA 260 report.

The Chairman invited Ian Howse, Deloitte to present the report. Ian Howse referred Members to the report in the agenda pack and stated he was pleased that they were now in a position to finalise the 2018/19 Audit drawing particular attention to the limited qualification. The report took all outstanding issues detailed at the meeting on 24 July 2019 and provided an update on them. The status on the vast majority of items was complete. Receipt of the signed representation letter was outstanding along with a few finalisation procedures.

It was stated that some adjustments were made to the original draft version of the accounts which had been approved, these involved the PFI liability and the value of assets and accumulative appreciation of those. There remained some issues regarding the King George assets and whether these should be in the balance sheet, however this was not considered to be a material concern. Item 2 resulted in a modified audit opinion which was included in the appendix to the report.

Some recommendations had been made, one regarding the King George assets and another regarding a full review of the process for producing the Statement of Accounts; issues regarding resources in the team were highlighted.  Mr Howse thanked the team for their patience, cooperation and hard work. Due to the additional work undertaken an additional fee was proposed. 

In response to questions Ian Howse, Deloitte confirmed that near the top of page 3 of the report there was a typing error, it should read 2019 rather than 2029.

It was also confirmed that the additional fee proposed by Deloitte for the finalising of the 2018/19 accounts was still being discussed with management and was expected to be around £35,000. There was also expected to be additional work that would fall into the fee for 2020/21.

It was stated that regarding item 2 of the report, there had previously been an inadequacy of the audit trail which meant that accuracy of the figures could not be checked. However, this did not necessarily mean that they were incorrect.

It was explained that it was hoped that 2020/21 would be the last year where the limited qualification would still apply with some additional costs involved. It was expected that early in the new calendar year work would be undertaken with the Council to close the issues off. Suggestions had been made regarding technical capacity in the Council and there might be a cost to the Council to acquire this expertise.

The Chairman stated that there was a balance to be struck between the time and effort involved to resolve the identified problems in the 2018/19 accounts and the fact that the issues were not materially significant going forward. Andy Brown, Interim Corporate Director for Resources (Section 151 Officer) stated that he could cover the issues raised under the verbal update on 2019/20 accounts. Ian Howse confirmed that there was not an impact on value for money and that he agreed with the Chairman’s views.

In response to a question regarding the Pension Fund Accounts and where responsibility lay for these, Ian Howse, Deloitte stated that the pension fund audit for 2018/19 had been completed and had the 2018/19 Statement of Accounts been completed at that time, then the pension fund accounts would have been signed off. Both could now be considered together. It was proposed that if the Statement of Accounts 2019/20 were not finished when the Pension Fund Accounts 2019/20 were complete, then they could be detached from one another and considered separately, although this was a complex process.

Officer Andy Brown clarified that the Audit and Governance Committee were charged with the governance of both sets of accounts (the Pension Fund and the Wiltshire Council accounts) and had responsibility to approve those. There was a possibility that Deloitte could give an opinion on the Pension Fund accounts before giving an opinion on the Wiltshire Council accounts.

Members voiced concerns that there was a level of anxiety regarding the distinct responsibilities of the Audit and Governance Committee, the Pension Fund Committee, their relationship to the responsibilities of the Auditors and whether adequate assurance was received from the Pension Fund Committee regarding Pension Fund accounts. It was felt that there was assurance for 2019/20 Pension Fund accounts. Members felt that the movement towards looking at the Pension Fund accounts and Wiltshire Council accounts as interrelated but distinct was helpful.

Following which it was;

Resolved

To note the ISA 260 2018/19 final report from Deloitte.