Agenda Item No
The Vale of Glamorgan Council
Audit Committee: 19th September 2011
Report of the Director of Finance, ICT and Property
Audit of the 2010/11 Financial Statements - Reporting to Those Charged with Governance
Purpose of the Report
1. To present to those charged with governance the report of the Appointed Auditor, Anthony Barrett of the Wales Audit Office, following the audit of the Council's Financial Statements for 2010/11.
1. T H A T the report of the Appointed Auditor on the audit of the Council’s Financial Statements for 2010/11 be approved and the Financial Statements including the final Letter of Representation be recommended for signature by those authorised.
Reason for the Recommendation
1. To ensure that those charged with governance have considered the results of the audit of the Council's Financial Statements for 2010/11
2. The Council is responsible for the preparation of the Financial Statements that presents fairly its financial position as at 31st March 2011. Anthony Barrett of the Wales Audit Office in his capacity as Appointed Auditor is responsible for reporting whether, in his opinion, this is indeed the case. The audit was undertaken by Grant Thornton UK LLP, as the Council's Engagement Lead, on behalf of the Appointed Auditor.
3. The draft Statement of Accounts for 2010/11 was prepared before 30th June 2011, in accordance with the statutory timeframe, and reported to the Audit Committee meeting of 21st July 2010 (Minute No. 233 refers).
4. With the audit of these Financial Statements now substantially complete, a report detailing the key matters arising from the audit must be reported by the Appointed Auditor to those charged with governance, in accordance with the International Standard on Auditing (ISA 260). In line with its terms of reference, the Audit Committee represents the appropriate body to which this report must be communicated.
Relevant Issues and Options
5. The report of the Appointed Auditor together with the 2010/11 Statement of Accounts incorporating all agreed amendments and final Letter of Representation is attached.
6. Over the past few years, significant changes had been introduced by the Code of Practice on Local Authority Accounting in the United Kingdom as to the presentation and content of the Statement of Accounts. The 2010/11 Statement of Accounts was prepared in accordance with the requirements of the International Financial Reporting Standards (IFRS). This was intended to provide for comparable accounts across all accounting boundaries, public and private, national and international.
7. This change has seen a significant increase in the information provided including new statement and changes to the layout as well as treatment of areas such as salaries and pensions, Government grants and contributions, fixed assets (property, plant and equipment), and leases. However, none of these changes impacted on the net expenditure and, therefore, the Council tax of this Authority.
8. The provisional findings of Grant Thornton on behalf of the Appointed Auditor on the audit of the Financial Statements are that:
They have concluded on all the risks in the Financial Audit Strategy;
There are no concerns with the qualitative aspects of the Council's accounting practices and financial reporting;
There are no uncorrected misstatements;
There are no expected modifications to the standard auditor's report;
The audit did not identify any material weaknesses in internal controls;
There are no other matters which need to be reported as required by other ISAs; and
There are no other significant audit matters of governance interest to report.
9. It is, therefore, the intention of the Appointed Auditor to issue an unqualified audit report on the Financial Statements once the relevant Council officers have provided a signed Letter of Representation.
Resource Implications (Financial and Employment and Climate Change, if appropriate)
10. As stated in the body of the report.
Legal Implications (to Include Human Rights Implications)
11. The Statement of Accounts is prepared in accordance with the requirements of the Accounts and Audit (Wales) Regulations 2005 (as amended 2010).
Crime and Disorder Implications
12. None as a direct consequence of this report.
Equal Opportunities Implications (to include Welsh Language issues)
13. None as a direct consequence of this report.
14. Reliable Financial Statements assist the Council in managing its assets more efficiently and thereby promotes the achievement of the Council's aims in respect of Corporate Resources.
Policy Framework and Budget
15. The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
16. No further consultation is proposed.
Relevant Scrutiny Committee
17. Corporate Resources.
Alan Jenkins - Head of Accountancy & Resource Management
Engagement Lead - Grant Thornton UK LLP
Sian Davies - Director of Finance, ICT and Property