Agenda item

The Corporate Governance and Audit Committee is requested to consider and note the attached report which summarises the external auditor’s audit conclusion in relation to Chichester District Council’s financial position and the results of operations for the year ended 31 March 2019.

The Committee considered this report circulated with the agenda.

Mr Suter and Mr Jones were in attendance for this item.

Mr Suter took members through the main sections of the Audit Results Report for the year ended 31 March 2019. The auditors intended to issue an unqualified opinion on the Council’s financial statements and an unqualified value for money conclusion that the Council’s arrangements were in place and adequate to ensure that value for money was being provided to council tax payers and other stakeholders throughout the year. 

The Committee made the following comments and received answers as follows:

·           With regard to the adjusted differences, the Leisure Centre understatement was realised after a valuation desk top exercise, which had made a material difference to the accounts but had been corrected.  The Council and external auditors had agreed to a shorter period of time to carry out the audit and it was agreed it would start eleven days early in order to prepare the draft statement of accounts ahead of the earlier deadline of 31 May 2019.  This had resulted in a shorter review period for the Council to accommodate an earlier audit, with the NNDR and the earmarked reserves errors being spotted by the Council before the deadline.  Mr Suter said he was grateful for the early access to the District Council’s accounts.  He could not confirm, with regard to PPE, that the necessary steps had been taken to prevent the differences happening again in the future, due to it being the third year in a row that it had happened.  Mrs Belenger explained that the draft terms had been issued to the Council’s valuers for the 2019/2020 accounts we are trying to pick up on the reasons why find out why the valuation differences had occurred in previous years and to reiterate in stronger terms the Council’s expectations in producing the valuations for the accounts.

·           Is the Council’s pension scheme taken into account?:  Not generally required to report to report on the Council’s pension scheme, but do take it into account.  He had no concerns with the assumptions the West Sussex Pensions scheme had made.

·           With regard to the use of data analytics would the system become more intuitive overtime,and if so could the Council’s data be pooled with other authorities improve the accuracy of the data set?:EY had moved from undertaking the audit on a sample basis to data analytics.  By using larger populations of data and looking at trends and analyses, EY was hopefully improving the quality of their results.  For some aspects tools were in development to investigate whether the use of AI could be used in the future, as the more you use it the more it learns.  It was currently not possible to pool other council’s data due to the various data hurdles that EY would have to go through.  Details of AI audit transformation were available on EY’s website.

·           Page 59 - certification work: amend to read “December 2019”.

·           With regard to a comment made concerning the summary of adjusted differences that Westgate very old with potential substantial refurbishment requirements therefore it was not felt appropriate to revalue the Council’s buildings on a crude index basis, EY challenged on an index basis and sought the advice of the valuers for any adjustments required and would not make a judgement solely on the basis of indices.

·           Mrs Belenger undertook to meet with Mr Dignum outside of the meeting to clarify the two new accounting standards (IFRS 9 and IFRS 15) and to advise the Committee.

RESOLVED

That the Annual Results Report for the year end 31 March 2019 be noted.