Agenda item

Report of the Deputy Chief Executive (Place) – to follow

The Committee considered a report of the External Auditor, Grant Thornton, on the Audit Findings for the City Council for the year ending 31st March, 2018. Mark Stocks of Grant Thornton, attended the meeting to present their report.

The report highlighted the key issues affecting the results of Coventry City Council and the preparation of the group and financial statements for the year ending 31^st March 2017.  It was also used to report their audit findings to management and those charged with governance in accordance with the requirements of International Standards on Auditing (UK and Ireland) 260, and the Local Audit and Accountability Act 2014.

Under the National Audit Office Code of Audit Practice, the External Auditors were required to report whether, in their opinion, the Council’s financial statements gave a true and fair view of the financial position of the Council and its income and expenditure for the year and whether they had been properly prepared in accordance with the CIPFA Code of Practice on Local Authority Accounting. They were also required to carry out sufficient work to satisfy themselves on whether the Council had made proper arrangements to secure economy, efficiency and effectiveness in its use of resources (“the value for money (VFM) conclusion”).

The audit approach was based on a thorough understanding of the group’s business and was risk based, and in particular included:

·  An evaluation of the components of the group based on a measure of materiality considering each as a percentage of total group assets and revenues to assess the significance of the component and to determine the planned audit response. From thisevaluation we determined that a comprehensive audit response was required for the Coventry City Council component (significant component) and a targeted approach was required for Coventry and Solihull Waste Disposal Company (CSWDC); and Coombe Abbey Hotel components to address specific risks. An analytical approach was required for Coventry North Regeneration Ltd; and for North Coventry Holdings Ltd.

·  Full scope audits of the significant component by the group engagement team and targeted testing for CSWDC focusing on the carrying value of the investments; and at Coombe Abbey Hotel focusing on the valuation of the hotel.

·  An evaluation of the group’s internal controls environment including its IT systems and controls; and

·  Substantive testing on significant transactions and material account balances, including the procedures outlined in this report in relation to the key audit risks

The audit of the Council’s financial statements were substantially complete and an unqualified audit opinion statement issued. The External Auditor did not identify any adjustments to the financial statements that resulted in an adjustment to the Statement of Comprehensive Income and Expenditure. Adjustments were only made to improve presentation or to reflect underlying records (Appendix C referred). Recommendations for management were raised (Appendix A referred) with follow up to the recommendations from the prior year’s audit (Appendix B referred). The Auditor concluded that the other information published with the financial statements, which included: the Statement of Accounts; Annual Governance Statement; and Narrative Report, were consistent with their knowledge of the organisation and with the financial statements audited. They had completed their risk based review of the Council’s value for money arrangements and concluded that Coventry City Council had proper arrangements to secure economy, efficiency and effectiveness in its use of resources and issued an unqualified value for money conclusion accordingly. They had not exercised any of their additional statutory powers or duties.

The Committee acknowledged the work carried out in the preparation of the report and asked that their thanks be conveyed to the officers concerned.

RESOLVED that the Audit and Procurement Committee notes the Audit findings, as presented by the Council’s External Auditor.