Agenda item

(a)       That the final version of the Statement of Accounts 2018/19 be recommended for approval by County Council;

(b)       That the Wales Audit Office ISA 260 presentation be noted; and

(c)       That the Letter of Representation be recommended for approval by County Council.

The Corporate Finance Manager presented the final version of the Statement of Accounts 2018/19 incorporating changes agreed with the Wales Audit Office (WAO) during the course of the audit.  Following receipt of the draft accounts in July, the Committee was asked to recommend the final version to County Council to meet the deadline, which was two weeks earlier than previous years.  A full written response to questions raised at the draft stage had been shared with all Council Members with no further queries raised since.

The Corporate Finance Manager expressed his gratitude to WAO colleagues for the manner in which the audit had been undertaken and welcomed the unqualified opinion which had been issued.  He said it was reassuring to know that the statements had been produced to a good standard and thanked the Finance Manager - Technical Accountancy and her team for their work.  The Committee’s attention was drawn to planned actions to address an issue relating to the process for valuing fixed assets which did not lead to any material misstatement.  The potential impact of the ‘McCloud’ Judgement on all UK local authority pension schemes would take time to resolve fully and any financial impact for the Clwyd Pension Fund would need to be considered as part of the Actuarial Review cycle.  The audit on the Clwyd Pension Fund accounts was currently ongoing with approval scheduled for 7 October in advance of the statutory deadline.

Mike Whiteley of WAO presented the main findings from the ISA 260 report in a presentation covering:

·         Overall findings

·         Auditor General’s responsibilities

·         Audit position

·         Issues arising from the audit

·         Independence

·         Looking ahead

He said that this was again a positive audit with good co-operation from the officers, resulting in an unqualified (‘clean’) opinion by the Auditor General for Wales.  He welcomed actions being put in place on asset valuations which may have been impacted by resource issues and said that such issues would need to be resolved prior to the introduction of earlier statutory deadlines.  On the material amendment arising from the ‘McCloud’ judgement, the WAO was satisfied that the potential financial liability was a reasonable estimate at this stage.

On the latter point, the Chief Executive said it was disappointing that local press coverage did not reflect this as a nationwide issue on potential liabilities.  Following detailed discussions, the estimated £12m liability was a reasonable assumption at this stage for Flintshire as one of the contributors to the Clwyd Pension Fund.  Any impact would be over the longer term and affect annual employer contributions spread over many years.

On the future timetable for the annual accounts, the Chief Executive said it was important to recognise the impact of any delays in presenting and concluding queries which might occur in the audit process.  As agreed with Group Leaders, a recommendation would be sought from the Constitution & Democratic Services Committee to County Council to delegate future approval of the group accounts to the Audit Committee.  If agreed, this would not prohibit Member involvement on the accounts process.

The Chairman asked whether resource issues were evident in other teams, for example, Planning Enforcement.  The Chief Executive said that teams were sized according to the minimum capacity to meet statutory duties and tasks, and that work was underway on vacancy management in specific areas.  A previous report to the Committee had acknowledged changes made to the Planning Enforcement structure and time required to clear the backlog of work.

Richard Harries said that resourcing was a challenge to other organisations including the WAO.  On the change to delegating approval of the accounts, he advised that other councils had adopted similar arrangements to help meet the new statutory deadline.

In response to comments from Councillor Johnson, Richard Harries provided background to the concept of materiality adopted by WAO.

When asked by Councillor Woolley about the number of non-material misstatements, Mike Whiteley replied that there were no concerns about the level of errors which had not changed significantly from the previous year.  WAO and Council officers spoke about future consideration of the level of reporting and greater reliance on estimates.

RESOLVED:

(a)       That the final version of the Statement of Accounts 2018/19 be recommended for approval by County Council;

(b)       That the Wales Audit Office ISA 260 presentation be noted; and

(c)       That the Letter of Representation be recommended for approval by County Council.