Agenda and draft minutes

Venue: Town Hall - Bridge Street, Bideford, EX39 2HS. View directions

Contact: Karen Hewlett - Democratic Services  Email: karen.hewlett@torridge.gov.uk

Items
No. Item

79.

Apologies For Absence

To receive apologies for absence for the meeting.

Minutes:

Apologies were received from Rob Hutchings, Devon Audit Partnership.

80.

Minutes pdf icon PDF 140 KB

Confirmation of Minutes of the Meeting held on Tuesday 23 July 2019

Minutes:

The minutes of the meeting held on Tuesday 23 July 2019 were presented.

 

It was proposed by Councillor Hodson, seconded by Councillor Rossi and –

 

Resolved:

 

That the minutes be confirmed as a correct record and signed by the Chair.

 

(Vote for: Unanimous)

 

81.

Declaration of Interests

Members with interests should refer to the agenda item and describe the nature of their interest when the item is considered.

Minutes:

There were no declarations of interest.

 

82.

Agreement of Agenda Items Part I and II

Minutes:

The agenda as circulated was agreed.

 

83.

Urgent Matters Brought Forward with the Permission of the Chair

Minutes:

There were no urgent matters brought forward.

84.

Report On-going Concerns pdf icon PDF 321 KB

To receive a report from the Strategic Manager (Resources).

Minutes:

The Finance Manager ran through the Assessment of going concern with Members in light of the closure of the Statement of Accounts for 2019-20.

 

The Finance Manager provided a review of the current financial position and the projections going forward, highlighting the overall picture for members and looking at the liabilities and assets, as well as measures in place to manage risk.

 

There was discussion regarding the pension deficit and the tri-annual review, which commenced earlier this year.  The Strategic Manager (Resources) confirmed a draft outcome will be with officers in November and a formal outcome will be available in time for Council’s budget setting early in 2020. 

 

Councillors queried whether there were any ethical requirements regarding how the pension fund was invested.  The Strategic Manager (Resources) explained the fund was administered by Devon County Council on behalf of the various organisations who contribute.  Torridge District Council’s contributions are relatively small and this limits the scope for influencing their investment strategy, which is based on the need to achieve a set rate of return to protect fund values. The Strategic Manager (Resources) said that Members could make a representation to Devon County Council on this matter.

 

The report concluded that Torridge retains a robust financial position with more than adequate arrangements in place to be classed as a “going concern”.

 

Members noted the report. 

 

85.

Presentation of the Financial Statements

To receive a verbal update and Financial Statement 2018/19 from the Strategic Manager (Resources).

Minutes:

The Strategic Manager (Resources) highlighted the draft statement of accounts, which were discussed at the previous Audit & Governance Committee. It was confirmed there were very few amendments required to be made since the last meeting and these were presentational rather than affecting the bottom line position as previously reported.

 

86.

7. 2018-19 STATEMENTS OF ACCOUNTS-unaudited pdf icon PDF 3 MB

To receive an update and Financial Statement 2018/19 from the Strategic Manager (Resources).

 

Minutes:

The Financial Statements 2018/19 were reviewed by Members.

87.

ISA260 Audit Findings Report 2018/19 pdf icon PDF 382 KB

To receive a report from the Grant Thornton Audit Manager.

Additional documents:

Minutes:

Alex Walling from Grant Thornton introduced herself as the Engagement Lead for Grant Thornton.  Alex Walling explained the process of auditing the Financial Statements 2018/19 and reasons for the delay in formally approving the accounts. She then ran through the Audit Finding Report headlines and highlighted significant findings and any significant risks.

 

It was noted that there were very few amendments to the draft accounts and the majority of these were minor typos.  Alex Walling credited the Finance Team for their work and explained that there was nothing material to report.

 

It was confirmed that the Council would be receiving an unqualified audit opinion and  following this Committee meeting Alex Walling will take the relevant signed paperwork and complete the opinion tomorrow – Wednesday 18 September.

 

In relation to the Council’s pension fund, there was some discussion in relation to the recent McCloud judgment and the additional audit fee associated with this work. Members wished to know the level of work involved for Grant Thornton and Torridge District Council.  Alex Walling responded by running through the work Grant Thornton completed due to the McCloud judgment for all Local Authorities.  It was requested that specific detail regarding the work completed for Torridge District Council be provided and Alex Walling responded. 

 

Concern was expressed by Members regarding the additional audit fee for this work, which would be paid on top of the agreed annual fee. Alex Walling explained the reasoning for these additional fees. The Strategic Manager (Resources) then summarised the process for how Torridge District Council should agree or not any additional audit fees, which ultimately Public Sector Audit Appointments (PSAA) would adjudicate on.

 

It was queried what impact the McCloud judgment  would have on the Council’s pension liability. The Strategic Manager (Resources) and Finance Manager explained the impact of the McCloud judgment and how it will be managed as the amount is not material the 2018/19 Accounts would not need to be amended, but future years’ accounts would be adjusted accordingly.  

 

There was a query in relation to the projected funding gap in the MTFS.  It was requested that the Strategic Manager (Resources) talk Members through the management response highlighted in the report. It was felt important that the Audit & Governance Committee were seen to be challenging the response.

 

The Strategic Manager (Resources) highlighted the work that took place at the Councillor strategic day last week, where future major priorities were debated. He explained the next stage would be to consider with Members the financing of these priorities and Torridge were currently awaiting the Government position regarding local government financing.   

 

It was felt important that the whole Council should be aware of the current financial projections as set out in the MTFS and the Audit & Governance Committee should take responsibility for identifying the significant issues in the report and raising these at Full Council to ensuring that the Council’s strategic vision is viable. 

 

The Strategic Manager (Resources) suggested that the Chair could take a short annual report to Full Council  ...  view the full minutes text for item 87.

88.

Approval of the Financial Statements for the Year Ending 31 March 2019

The Committee to approve the Financial Statements for the year ending 31 March 2019 and authorise the signing of:

 

           The Letter of Representation

           The Financial Statements by the Chair of the meeting

           The Annual Governance Statement by the Chair of Audit & Governance Committee, the Statutory Finance Officer, Leader of the Council and  Head of Paid Service.

Minutes:

It was proposed  by the Chair, seconded by Councillor Rossi and –

 

Resolved:

to approve the Financial Statements for the year ending 31 March 2019.

 

(Vote for:  Unanimous)

 

The Strategic Manager (Resources) and Chair reminded that members are asked to sign off the 3 items (including the letter of representation) as set out on the Agenda.  The vote was taken again.

 

It was proposed by the Chair, seconded by Councillor Craigie and –

 

Resolved

to approve the Financial Statements for the year ending 31 March 2019 and authorise the signing of:

 

   The Letter of Representation

   The Financial Statements by the Chair of the meeting

   The Annual Governance Statement by the Chair of Audit & Governance Committee, the Statutory Finance Officer, Leader of the Council and  Head of Paid Service.

 

(Vote for:  Unanimous)

 

The documents were duly signed.

 

A further discussion followed the vote concerning the additional audit fees in relation to the Grant Thornton work as a result of the McCloud judgment. Members also noted the overall reduction of 23% in the audit fees since the previous year and raised concerns about how this was agreed.

 

Alex Walling confirmed that the Audit Fees, which are set nationally, reduced by 23% this year. Grant Thornton along with other public sector auditors are struggling to carry out their required duties within this reduced fee structure and will be making recommendations to the PSAA to have the fees reviewed.

 

 Following the discussion Members agreed that the Strategic Manager (Resources) had a strong steer from the Committee to challenge the additional fees through the appropriate channels. 

 

Chair noted that he would be raising the issue of additional fees at the Quality Audit Forum.

 

89.

2019/20 Audit Fee Letter pdf icon PDF 169 KB

To receive a report from Grant Thornton LLP, External Auditors.

Minutes:

Alex Walling from Grant Thornton ran through the audit fee letter with members, explaining the fees and timetable of work to be completed for 2019-20.  She explained that the fee has been set by PSAA, and felt it necessary to forewarn of discussions already taking place regarding the potential for additional fees going forward (as the various External Auditors were struggling to complete the work in line with the reduced fees). 

 

There was a query in relation to the paragraph on additional work and Alex Walling explained this paragraph was in relation to work over and above the agreed Code.

 

Members duly noted the letter.

90.

Forward Plan pdf icon PDF 208 KB

Minutes:

The Service Improvement Officer ran through the forward plan with members and provided a summary of the items to be discussed at the next meeting on 22nd October.

 

Members duly noted the forward plan.

 

91.

Exclusion of the Public

The Chair to move:

 

That the public be excluded from the remainder of the meeting because of the likely disclosure of exempt information by virtue of paragraph 3 of Part I and paragraph 10 of Part 2 of Schedule 12A of the Local Government Act 1972.

Minutes:

It was proposed by the Chair, seconded by Councillor Hodson and

 

Resolved:

 

That the public be excluded from the remainder of the meeting because of the likely disclosure of exempt information by virtue of paragraph 3 of Part I and paragraph 10 of Part 2 of Schedule 12A of the Local Government Act 1972.

 

(Vote for: Unanimous)

 

92.

PART II (CLOSED SESSION)

93.

Corporate Assurance Risk Register - September 2019

To receive a report from the Strategic Manager (Resources).

Minutes:

The Strategic Manager (Resources) provided an update on the Corporate Risk Register with members and confirmed the process for items being added to the register; it was agreed that an overview of the process would be provided at the October Committee meeting for new Members. 

 

Following a discussion regarding the items on the register members duly noted the report.

 

It was proposed by Chair, seconded by Councillor Hodson and

 

Resolved:

That the meeting leave Part II.

 

(Vote for: Unanimous)