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Agenda Item No 8

The Vale of Glamorgan Council

 

Audit Committee: 26th July 2017

 

Report of the Head of Finance as Section 151 Officer

 

Unaudited Statement of Accounts 2016/17

 

Purpose of the Report

  1. The Statement of Accounts for the Vale of Glamorgan Council and the Shared Regulatory Service for 2016/17 and the Annual Return for the Vale, Valleys and Cardiff Regional Adoption Service are now complete and are brought to the Committee for review and comment prior to the commencement of the external audit.

Recommendation

  1. That the unaudited Vale of Glamorgan Council Statement of Accounts for 2016/17 be reviewed and any comments of the Committee be referred to the Head of Finance as Section 151 Officer for subsequent discussion with the Council's external auditors, Wales Audit Office.
  2. That the unaudited Joint Committee Shared Regulatory Services Statement of Accounts for 2016/17 and the Shared Regulatory Services Annual Governance Statement be reviewed and any comments of the Committee be referred to the Head of Finance as Treasurer of the Joint Committee for subsequent discussion with the external auditors, Wales Audit Office.
  3. That the Annual Return for the Vale, Valleys and Cardiff Regional Adoption Service 2016/17 be reviewed and any comments of the Committee be referred to the Head of Finance as Treasurer of the Joint Committee for subsequent discussion with the external auditors, Wales Audit Office.

Reasons for the Recommendations

  1. To allow for the initial review of the unaudited Vale of Glamorgan Council Statement of Accounts by those charged with governance.
  2. To allow for the initial review of the unaudited Shared Regulatory Service Statement of Accounts and Annual Governance Statement by those charged with governance.
  3. To allow for the initial review of the unaudited Valleys, Vale and Cardiff Regional Adoption Service Annual Return by those charged with governance.

Background

  1. Under the Accounts and Audit (Wales) Regulations 2014 the Statement of Accounts must be certified by the Section 151 Officer before the 30th June as presenting a true and fair view. The 2016/17 Statement of Accounts for the Council and Shared Regulatory Service and also the Annual Return for the Vale, Valleys and Cardiff Regional Adoption Service were certified as such by 30th June 2017.
  2. The 2016/17 Vale of Glamorgan Statement of Accounts will be subject to external audit and the audited accounts will be presented to Audit Committee in September 2017 along with the external auditor's ISA 260 report for review prior to being submitted for approval by Council before 30th September 2017.
  3. The 2016/17 Shared Regulatory Services Joint Committee Statement of Accounts will also be subject to external audit and the audited accounts will be presented to Audit Committee in September 2017 along with the external auditor's report for review prior to being submitted for approval by the Shared Regulatory Service Joint Committee.
  4. The external audit extends to the Annual Governance Statements for both the Vale of Glamorgan Council and the Shared Regulatory Service. The Annual Governance Statement for the Vale of Glamorgan Council is not included in the version attached at Appendix A as it is included under a separate item on the Audit Committee agenda. The Annual Governance Statement for the Shared Regulatory Service is included in Appendix B.
  5. The Vale, Valleys and Cardiff Regional Adoption Service accounts are not subject to a full external audit by Wales Audit Office but an Annual Return has been completed by Accountancy and Internal Audit as at 30th June and is attached at Appendix C. Wales Audit Office will be providing a limited assurance audit for the service.
  6. As part of the 2015/16 Audited Accounts a number of Audit Recommendations were made in the ISA260 document as set out below;

Matter Arising

Description

Recommendation

1

Quality Control of the Statement of Accounts

The Council should complete a robust review of the draft accounts to ensure they are of good quality and free of simple and avoidable error.

2

Timing of provision of working papers to support the draft accounts

The Council should provide a complete set of working papers to accompany the draft accounts at the start of the audit.

3

Incorrect treatment of non-enhancing capital expenditure

The Council needs to ensure that the correct accounting entries are made to record the non-enhancing expenditure per the requirements of the Code and that appropriate audit evidence is retained to support the basis of the non-enhancing expenditure.

4

Contract retention liabilities not recognised in the Accounts

The Council should review its rationale for not recognising these entries as creditors in the statement of accounts and in doing so evaluate the extent to which previous contract retentions have eventually been repaid to the contractors (or alternatively retained by the Council).

5

Employee Emoluments disclosures

The Council should undertake a detailed review of the Employee Emoluments note to ensure that it fully compliant with the requirements of the CIPFA code.

6

Netting off Council tax debtors and creditors

The Council should ensure it presents the Council tax debtors and creditors on a gross basis within the balance sheet.

     

Relevant Issues and Options

  1. The 2016/17 Vale of Glamorgan Council Statement of Accounts is attached at Appendix A and has been prepared in accordance with the requirements of the International Financial Reporting Standards (IFRS). This is intended to provide for comparable accounts across all accounting boundaries, public and private, national and international. The Shared Regulatory Service Joint Committee 2016/17 unaudited Statement of Accounts is also attached at Appendix B and the Vale, Valleys and Cardiff Joint Committee Annual Return 2016/17 is attached at Appendix C.
  2. It is proposed that any comments of the Committee on the Vale of Glamorgan Council 2016/17 unaudited Statement of Accounts, Shared Regulatory Service Joint Committee 2016/17 unaudited Statement of Accounts or the Vale, Valleys and Cardiff Joint Committee Annual Return 2016/17 be referred to the Head of Finance as Section 151 Officer and Treasurer of the Joint Committee respectively for subsequent discussion with the Council's external auditors, Wales Audit Office.
  3. The actions taken against the 2015/16 matters arising recommendations are set out below;
  4. Matter Arising 1 - Quality Control of the Statement of Accounts

When planning the closure of the accounts for 2016/2017 time was placed in the timetable to ensure that adequate checking of the figures and the narrative could be done before the Statement of Accounts was signed off at the end of June 2017.

  1. Matter Arising 2 - Timing of Provision of working papers to support the draft accounts

A discussion has taken place with the WAO ahead of the audit to agree a list of required working papers and these were available at the start of the audit process in July 2017.

  1. Matter Arising 3 - Incorrect accounting treatment of non-enhancing capital expenditure

Changes were made to the 2015/2016 accounts in line with the requirements of the auditors and this practice was repeated when closing the 2016/2017 accounts.

  1. Matter Arising 4 - Contract retention liabilities not recognised in the accounts

A review was undertaken during 2016/2017. It is not proposed to change our practice.

  1. Matter Arising 5- Employee Emoluments

Amendments were made to the 2015/2016 accounts and this practice was continued in the 2016/2017 accounts.

  1. Matter Arising 6 - Netting off Council tax debtors and creditors

Amendments were made to the 2015/2016 accounts and this be reflected in the final 2016/2017 accounts.

Resource Implications (Financial and Employment)

  1. The 2016/17 Vale of Glamorgan Statement of Accounts, Shared Regulatory Service Statement of Accounts and the Vale, Valleys and Cardiff Regional Adoption Service Annual Return have been prepared within existing staff resources.

Sustainability and Climate Change Implications

  1. None as a direct result of this report.

Legal Implications (to Include Human Rights Implications)

  1. The Statement of Accounts is prepared in accordance with the Accounts and Audit (Wales) Regulations.

Crime and Disorder Implications

  1. There are no Crime and Disorder Implications arising out of this report.

Equal Opportunities Implications (to include Welsh Language issues)

  1. There are no Equal Opportunities Implications arising out of this report.

Corporate/Service Objectives

  1. There are no Equal Opportunities Implications arising out of this report.

Policy Framework and Budget

  1. This is a matter for consideration by Audit Committee as those charged with governance.

Consultation (including Ward Member Consultation)

  1. None

Relevant Scrutiny Committee

  1. Corporate Performance and Resources

Background Papers

2016/2017 Unaudited Statement of Accounts

Contact Officer

Gemma Jones

Principal Accountant

Resources

Officers Consulted

None

Responsible Officer:

Carys Lord Head of Finance

Section 151 Officer

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