The Head of Corporate Finance apologised to the Committee for the late circulation of the updated version of the external auditors report. It was explained that it was felt necessary for the Committee to have the most recent information possible.

The external auditors informed the Committee that they were responsible for forming an opinion on financial statement, assessing the council’s value for money arrangements, auditing the whole of government accounts submission and issuing the Council with its audit certificate.

Members were taken through the report by the external auditors and while doing so, addressed the key points:

·         That the majority of work for the financial statement had been completed with no issues, however there were a few final questions still to be resolved;

·         Within the report on page 6, the report referred to  three misstatements contained in the draft of the financial statement which had not been corrected by management. This numbers  was incorrect. The actual misstatements within the statement that have not been corrected was two, as detailed in the Appendix. Members were informed that this was an improvement on previous years;

·         The Committee were notified that the external auditors had tested the controls of the of the Councils only to the extent necessary to complete the audit and they did not provide an opinion on the overall effectiveness of internal control;

·         Appendix one within the report, informed Members of the Committee of the uncorrected misstatements; however both items were not material and therefore did not impact on this issue of the opinion for the financial statement. 

The Head of Corporate Finance informed the Committee that he was extremely satisfied with the work his team had carried out with regards to the financial statement. He reminded Members that the financial resilience element of the value for money conclusion was now looking three years ahead.

It was explained to Members that the reason for not correcting the misstatements within appendix one was as neither were material and officers made the judgement by weighing up the impact of the error on readers understanding the accounts against the risk of further errors being made in correcting the errors due to the number of areas of the financial statements that would need to be amended as a result.

Members sought clarification from the external auditors as to the deadlines for the audit opinion on the financial statement and when the audit of the accounts would be concluded.  The Committee were advised by the external auditors that the deadlines were 30 September 2014 to issue the opinion on the financial statement and 3 October 2014 to complete the audit on the accounts. Members were informed that there would not be an additional fee relating to the work listed as outstanding in the report; however the audit was not as yet complete.

The Chair of the Committee praised the superb work and dedication of the finance department. He continued to state on behalf of the Committee their appreciation of the external auditors and their teams for their hard work and for presenting the report in such a way that was straightforward to understand.

RESOLVED:

That the Standards and Audit Committee consider the comments of the external auditors as set out in the attached report and note their findings.