Agenda item

Report of the External Auditor (Grant Thornton) – 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, 2016. John Gregory and Simon Turner, 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 2016.  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 Committee were advised that the audit was substantially complete, although procedures were being finalised in respect of the review of the final version of the financial statements; obtaining and reviewing the management letter of representation; updating post balance sheet events review, to the date of signing the opinion; final consideration of evidence in relation to improvements in children’s services; and the whole of Government Accounts.

It was anticipated that an unqualified opinion would be provided in respect of the financial statements. Reference was made to the fact that the audit had progressed smoothly, with audit queries being responded to in a prompt and constructive manner. Draft accounts were of a good standard with an overall high level of compliance with disclosure requirements. Identified errors and omissions, which did not impact on the Council’s overall financial position, had subsequently been corrected

The report highlighted that with the exception of their work in respect of children's services, the Value for Money work was complete and had not raised any issues which would lead the External Auditors to conclude that the Council had not put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2016.  Discussions with officers about the improvements being made in respect of children's services had continued and John Gregory reported at the meeting that having referred to Ministerial letters regarding progress with the Improvement Plan sufficient progress had been made.

Attention was drawn to testing on the Council's general IT controls, which had identified three significant deficiencies, these being:-

·  Inappropriate segregation of duties among IT staff

·  Ineffective design of leaver disablement process

·  Security administration rights granted to those performing financial reporting processes or controls

Actions in response to these issues, along with a number of other recommendations were set out in an action plan attached as an appendix to the report and these had already been agreed by the Executive Director of Resources.

RESOLVED that the Audit and Procurement Committee note the audit findings, as presented by the Council’s External Auditors.