Agenda item

(a)       That the final Statement of Accounts for 2012/13 be approved and that the uncorrected misstatement in relation to the Clwyd Pension Fund not be amended; 

(b)       That the Letter of Representation – Flintshire County Council be approved; and

(c)       That the Letter of Representation – Clwyd Pension Fund be approved

The Head of Finance introduced the Statement of Accounts 2012/13, together with the Wales Audit Office (WAO) reports in connection with the audit of the 2012/13 financial statements for Flintshire County Council and the Clwyd Pension Fund. 

The Head of Finance advised that the statutory deadline for the approval of the Statement of Accounts was 30 September 2013 and commented on the opportunities which had been provided since July for Members to raise comments or questions beforehand.  She reported that as part of the final accounts process the WAO had presented the ISA 260 reports ‘Audit of the Financial Statements – Flintshire County Council’ and ‘Audit of the Financial Statements – Clwyd Pension Fund’ to a meeting of the Audit Committee which was held prior  to the meeting of the County Council.  She also explained that during the audit process a number of changes to the draft Statement of Accounts had been agreed with the WAO and these were incorporated into the final document  appended to the report.  The Letters of Representation – FlintshireCounty Council and Clwyd Pension Fund were also attached to the report for consideration. 

Councillor A. Woolley explained that he had been interim Chair at the meeting of the Audit Committee held on the morning of the meeting of County Council.  The Statement of Accounts which incorporated the agreed changes with the WAO had been thoroughly considered by the Committee.  The WAO had been present and fully explained their findings in respect of the accounts for FlintshireCounty Council and the Clwyd Pension Fund.  He gave an outline of the main points of discussion relating to the accounts and moved the recommendations of the report.  The proposal was seconded by Councillor I.B. Roberts.

The Head of Finance introduced and welcomed Mr John Herniman and Ms Amanda Hughes of the Wales Audit Office to the meeting. 

Mr. Herniman advised that an unqualified opinion on the financial statements would be issued when the Letter of Representation from the Authority had been received by the WAO.   Referring to the Statement of Accounts he explained that there were some minor typographical errors which would be corrected in the final version.  He reported that there had been no misstatements identified in the financial statements for FlintshireCounty Council which remained uncorrected.  There were misstatements that had been corrected by management which were detailed with explanations in appendix 3 of the Audit report.

Mr. Herniman referred to other significant issues arising from the audit and said there was concern about some of the qualitative aspects of the Authority’s accounting practices and financial reporting.  He referred to matters concerning non-current assets, the functionality of Technology Forge, general issues relating to the quality of accounts,  and liability for pension contributions on equal pay liabilities.  Mr. Herniman also referred to the liquidation of AD Waste which was finalised in September 2013 and explained that the accounts had been amended to reflect the final position following liquidation.

In conclusion, Mr Herniman summarised that there were no other matters to be reported.  He stated that full cooperation had been given to the WAO by Council officers and there were no significant matters discussed and no material weaknesses identified in internal controls. 

Councillor A. Halford raised an issue concerning the Statement of Accounts 2012/13 which had been sent to members of the Audit Committee for consideration as part of the despatch of the agenda for the meeting.  She said that this had not allowed the Committee sufficient time to read and assimilate the information in the document prior to the meeting of the Committee held on 25 September 2013.   She outlined the reasons why she felt she could not support the recommendations of the report to the Committee on the Statement of Accounts 2012/13 and sought clarification on constitutional procedures. 

The Chief Executive responded to the matters raised by Councillor Halford and explained that the Monitoring Officer gave the official and final advice on legal compliance.  He said there was a statutory duty for the accounts to be considered and approved before the end of the month deadline, during which time the audit officially continued for post balance sheet events and the like, but had now been substantially completed.  The Chief Executive also advised that the final accounts included changes agreed by WAO during the course of the audit and that these had been discussed with officers with appropriate actions put in place to amend processes where necessary. 

The Democracy and Governance Manager explained that in the temporary absence of the Head of Legal and Democratic Services he was currently the Monitoring Officer.  He advised that the legal requirements and  procedural rules regarding the meeting had been fully complied with. 

Mr. J. Herniman of WAO spoke of the complex task and time dedicated to producing local government accounts, including some areas requiring technical discussion on the treatment of issues within the accounts and inevitable adjustments which were normal practice.  He advised of the intention to issue an unqualified (clean) opinion on the financial statements.  Whilst reporting on the corrected misstatements identified, which had been agreed with management, he advised that the issue with balancing entries in the accounts had been resolved. 

Councillor Halford expressed her thanks to the Head of Finance and her team for their hard work in producing the Statement of Accounts.

In response to a further question raised by Councillor R.J.T. Guest concerning procedural matters the Democracy and Governance Manager advised that the Chair could adjourn a meeting in certain circumstances, however, those circumstances had not arisen at the meeting of the Audit Committee held earlier in the day.

Councillor R.B. Jones welcomed that there were no longer balancing entries in the accounts.   He raised a query regarding the new IT system Technology Forge to which the Chief Executive responded based on the earlier discussion at Audit Committee which was  also confirmed by the Head of Finance.  

Mr. Herniman referred to the audit report for the Clwyd Pension Fund and said an unqualified opinion on the financial statements would be issued following receipt of a Letter of Representation from the Authority.  He referred to an uncorrected misstatement which had been identified in the financial statements and asked that confirmation be given by Members to the response of management that for practical and expediency reasons the Authority was content not to adjust the accounts for the required change in value on this occasion.   Mr. Herniman also referred to a corrected misstatement concerning the pension fund accounts.  He summarised that there were no concerns about the qualitative aspects of accounting practices and financial reporting and no significant difficulties or  matters discussed. 

Councillor R. Davies expressed his thanks to the former Managing Director of AD Waste and his team for their work. 

RESOLVED:

 (a)      That the final Statement of Accounts for 2012/13 be approved and that the uncorrected misstatement in relation to the Clwyd Pension Fund not be amended; 

(b)       That the Letter of Representation – Flintshire County Council be approved; and

(c)       That the Letter of Representation – Clwyd Pension Fund be approved