Agenda item

Report of the Corporate Director Resources (Section 151 Officer).

(Papers to follow).

Paul Hewitson submitted the External Audit (ISA 260 Report) for Wyre Borough Council for 2019/20.

Firstly, Mr Hewitson apologised to members for the delayed report. As the report had been distributed to the Committee as an update sheet, Mr Hewitson shared his screen for all members to view the report alongside his verbal update.

He presented the Committee with an overview of the report and summarised the conclusions from the testing undertaken for the council.

Mr Hewitson expressed that their audit is at an advanced stage and explained the key matters that were still outstanding. Other than the matters discussed he assured members that their audit was largely complete. Additionally, Mr Hewitson stated that an “Emphasis of Matter” paragraph will be included in their audit regarding the valuation of both the pension assets and the assets of Wyre’s balance sheets. He stated that there was less certainly attached to valuations conducted for 31 March 2020. He stressed to members that this was still an unmodified opinion and that it had been common with all the audits they have undertaken.

He highlighted the main three significant risks that had been identified:

-           Completeness and cut-off of service line expenditure

-           Property Valuations

-           Management override of controls

Mr Hewitson explained that they have raised some recommendations around controls. However, even though these risks had been found, he affirmed that overall Deloitte was satisfied. 

There were three minor insights and areas for management focus in the report:

-           IT environment observations

-           Property Valuations

-           Journals

Paul Hewitson confirmed that, although these findings had been brought to their attention, they were not classified as a significant risk. The Corporate Director Resources reassured members, in particular to the posting of journals, that the council had adequate checks and balances in place internally.

He then brought to the Committee’s attention a potential misstatement that had been identified from the recent “Goodwin” court case regarding the impact of the pension liability. Nevertheless, he believed that this should not be of great concern and again it was a common finding. Also, Paul Hewitson verbally updated members of an additional unadjusted misstatement found. He explained that Wyre’s Statement of Financial Position included Section 106 monies under a Capital Grants received in advance heading. This would not change the net worth, but he suggested that these should be disclosed separately for accuracy. Mr Hewitson asked if the council could provide him with a formal record of any adjustments.  

The Corporate Director Resources responded that this was not a major issue for the council and explained that if the Committee agreed then she was happy to go forward with it unadjusted. 

The Chair expressed that Section 106 money should be separate from the Capital Grant. The Corporate Director Resources stated that the heading could be amended instead resulting in a more accurate reflection. Paul Hewitson confirmed that this could be a viable solution.

The Chair thanked Paul Hewitson for his attendance and contribution.

Agreed that the External Auditor’s Report to those charged with Governance, (referred to as the ISA 260 report) for 2019/20, be noted.