Agenda item

The Committee were requested to view the Audit of Financial Statements Report   2018/19 which was an opinion on whether the financial statements gave a true and fair view of the financial position of Newport City Council and Newport City Council Group.

Main points:

·                It was the intention to issue an unqualified clean audit report on the financial statements once a Letter of Representation was provided.

·                The Committee was asked to view page 184; Appendix 3 in relation to the Summary of Corrections made to the draft financial statements and it was noted that although there were a lot of areas to cover none of the corrections impacted on the general fund balance.

·                On page 173 the McCloud judgement was nonmaterial and didn’t affect them but needed to be brought to attention.

·                There was also one other issue on page 174, during a review of related party transactions this year it was found that Council staff did not receive declarations of interest from the majority of Council Members as part of the work over related party disclosures of cases and there was nothing disclosed on party accounts.

The Chair asked whether Members should be contacted. The Assistant Head of Finance confirmed thatFinance would be liaising with the Democratic Services Team. The Chair enquired as to whether there was anything the Audit Committee could do, and it was noted that this was an opportunity to nudge the process along.

Agreed:

·                For the Head of Finance to draft a letter to all Members of the Council that improvements were needed in that respect and that Finance would work with Democratic Services department and for all Members to engage with this.

·                It was confirmed by the Head of Finance that the letter would set out what the problem was and what Members should do and what was required. 

The Chair commented on the £6.2million value of correction on page 184 and queried whether this was above the threshold level and why it was not picked up over the year. The Senior Finance Business Partner confirmed that this would be changed as to how it was accounted for in the ledger and that this was an oversight that would not occur again. 

It was commented that Capital had been resolved as it seemed to always have been an issue and that there was nothing wrong with the figures but the problem was that there were a lot of errors and the Chair enquired as to whether there was not enough attention to detail as it was a continuing issue. 

The Head of Finance stated that there was a problem with resources and commented that there was a lot of information to get through and with the current climate, a reasonable job was being done in the time available but things did slip in the capital area but that there was a need to be pragmatic. 

The Chair commented that maybe a lot more assurance could be given during the year and that maybe corrections could be made earlier in the draft area of the accounts.  

A Member asked whether there was an accounting glitch and the Chair commented that it looked like a slip on the budget spend from an Audit Committee point of view and that the Cabinet had already agreed to the money being spent.

The Head of Finance commented that they were looking to phase in budgets in a more realistic way and that there was more work to do, for example in relation to Education projects which were not stopping.

It was confirmed that officers had not spent the money as the money came from Welsh Government late in the year. 

The Chair requested that if this was in the accounts then it gave the reader more information.

The Head of Finance confirmed that in relation to capital, only what was spent was reported and what was spent which was capital monitoring. It was confirmed that this was a factual document on what was spent in the last year.

If £10 million had been not spent Cabinet would approve the funding to be carried over into next year and then the budget would go up.

It was commented that if Welsh Government gave us £5million and it was not spent then it just remained in the bank account.

It was noted that the Letter of Representation had to be signed by the Chair and the Head of Finance.

Agreed:

The Committee agreed for the Chair and the Head of Finance to sign the Letter of Representation. 

The Letter of Representation was signed by the Chair and the Head of Finance.

The Chair questioned as to whether Learning lessons was completed, and it was agreed that this would come back to the Audit Committee in the future.