Agenda and minutes

None.

The Minutes of the meeting held on 26 June 2017 were submitted.

Agreed

To confirm the minutes of the meeting held on 26 June 2017.

Members considered an updated version of the Corporate Risk Register which identified 14 risks; 4 remained from the previous update, 2 had been closed and 2 updated.  In addition to this 8 new risks had been identified.  There were 5 high risks and 9 medium risks.

Discussion included the following:

·         Risk 8: Risk of Stability of External Suppliers

Present risk score should be 20 and not 4 – to be amended.

Agreed

To note the contents of the Corporate Risk Register

Members considered a report on the results of the external audit of the 2016-17 Statement of Accounts, which highlighted the changes since they were initially published at the end of June 2017 and sought their formal adoption in accordance with the Accounts and Audit (Wales) regulations 2014.

The Accounts were published at the end of June 2017 by the Head of Finance and added to the Council’s website at that time.  The Accounts were available for public scrutiny, as required by the Accounts and Audit (Wales) regulations 2014, for a 20 working day period ending 2 August 2017.  The Council received no requests to review the Accounts from the public during the public scrutiny period.

Auditors have reviewed the 2016/17 Statement of Accounts in detail, and a number of required changes had been identified.  The Wales Audit Office’s (WAO) accompanying report showed a summary of the agreed changes.  Appendix A presented the revised Accounts which members were invited to review and subsequently approve in accordance with the Council’s standing orders.

The Assistant Head of Finance introduced the report and advised that the accounts had been completely audited and the Wales Audit Office ISA260 report was included in the reports pack.   Whilst there were a number of amendments made to the accounts following audit, no changes were made to the reported outturn or reserves held by the Council. 

There has also been a quality assurance exercise of the financial statements prior to presentation at the Audit Committee.  It was acknowledged that WAO had highlighted a number of issues within their ISA260 report, which would be reviewed by the Council and actions put in place to ensure that procedures and processes were in place to address the issues raised.

The report detailed the agreed changes applied to the Statement of Accounts from the original publication through to completion of the audit review.  The majority of these related to presentational changes, disclosure notes, some amendments to lines across the comprehensive income and expenditure account and items relating to Property, Plant and Equipment, all of which had no impact on the bottom line.

Although some of the figures included in the corrected misstatements appendix were large in value, these largely related to the classification of internal recharges as external income rather than netting off against expenditure.  The effect of these on the net position on both the accounts and the service areas were nil.

There was only one uncorrected misstatement included in the ISA260 report - the value of Newport Transport Ltd. Depot being understated by £376,000.  The reason was related to the accounting treatment used by Newport Transport Ltd and those required to be used as per the accounting policy for the group.  Due to the small value and complex nature of the transactions that would need to be put through the accounts it had been decided an adjustment would not be made for this. 

Discussions included the following:

·         Some wording, formatting issues and spelling mistakes were referred to.

·         On the Balance Sheet  ...  view the full minutes text for item 4.

Members considered a report on the Internal Audit Section’s progress against the 2017/18 agreed audit plan for the first three months of the year and for information on audit opinions given to date and progress against key performance targets.

The team currently operated with an establishment of 8 audit staff.  At the start of the year there were 7 audit staff with 1 vacancy in the team.  One Auditor left and one Auditor was appointed and started with the team during quarter 1.  The remaining vacant post was recently advertised and interviews held during September.

In order to take account of the budget savings contribution and the delayering exercise required by senior management following the job evaluation exercise, the Internal Audit team was restructured.

The performance for Quarter 1 2017/18 was compared to the same period of the previous year (shown in brackets):

a.    21% (16%) of the audit plan had been achieved so far which was above last year’s performance and higher than the profiled target of 12%;

b.    The promptness of issue of draft reports (comparing timescale between finalising all fieldwork and issuing the draft report to management) averages at 4 days which is well within the target time of 10 days;

c.    The promptness of report finalisation (comparing timescale from meeting with client to discuss issues raised in the draft report to issue to finalised report to management) averages 8 days (1 day) which is above the target time of 5 days.

Coverage of the plan at that stage of the year was above expectations; the target being 12% for Quarter 1.  Although there had been a reduced audit resource in the team there had been very little involvement with special investigations.  Although performance may dip throughout the year, historically things had picked up in the final quarter; this year would depend on sufficient audit resources being available to complete the audit plan.  All key financial systems would be reviewed by the year end.

Page 233 – Paragraph 12 – ‘All key financial systems to be reviewed by year end’ – The question was raised whether ISA 260 observations were tied in? – The Auditors confirmed that the frequency would be considered depending on the level of risk.

Agreed

To note the progress against the 2017-18 Audit Plan for the first three months of the year.

The Head of Finance drew Members’ attention to the Treasury Management training scheduled to take place on 11 October 2017.  It was recommended that Members attend.  The Chair gave apologies.

The Audit Training session had been successful.  Members found the session interesting and well presented.

Agreed

To note the work programme.