Agenda item
External Audit progress report
This report provides an update on the summary of work performed by KPMG, the external auditor, since the last meeting and a summary of work proposed over the next quarter.
Minutes:
The Committee received a report from KPMG, the Council’s external auditors which set out a summary of work performed since the last meeting and work proposed to be carried out over the next quarter.
Phil Johnstone, Director of KPMG (external auditors) in providing a summary of work undertaken since the last meeting stated that KPMG had issued unqualified audit opinion, unqualified VFM conclusion, consistency conclusion on the Whole of Government Accounts (WGA), Audit Certificate and Annual Audit Letter. Members heard that the issuance of VFM conclusion meant that KPMG were satisfied that the Council had proper arrangements for securing financial resilience and challenging economy, efficiency and effectiveness. He continued that the Annual Audit Letter attached to the report provided more details as well as a recommendation relating to the audit of the WGA. He then set out an outline of KPMG’s proposed work over the next quarter which would focus on planning for the 2013/14 financial statements, preparing the 2013/14 Audit Plans for the Authority and its Pension Fund for presentation at the Audit Committee on 19 March 2014 and planning the interim accounts audit where the key financial controls would be reviewed.
In reference to The Audit Commission’s latest research, “Tough Times 2013: Councils’ Responses to Financial Challenges From 2010/11 to 2013/14”, the Director confirmed that Brent Council was among the 63% of England’s councils that demonstrated a high degree of financial resilience over the last three years and added to their reserves, despite a 20 per cent reduction in government funding and a number of other financial challenges. He however added that whilst Brent was financially well placed, it needed to take tough decisions to address future challenges and continue adapting in order to fulfil its statutory duties and meet the needs of local people.
Conrad Hall, Chief Finance Officer praised his team of officers for their efforts that led to the conclusions reached by the external auditor on the Council’s arrangements for securing financial resilience. In respect of the external auditor’s high priority recommendation, the Chief Finance Officer assured Members that the issues that gave rise to the slight delay in the submission of the WGA return would be addressed in closing the 2013/14 accounts.
A member raised a question about the severance payment made to the former Chief Executive and the former Director of Finance and the impact it had had on the Council’s finances. Steve Lucas, KPMG Manager responded that following a review, KPMG concluded that no issue of serious concern arose from the payments for which Council needed to be challenged. He praised officers for the openness that prevailed in the discussions and review.
It was noted that details of these payments were disclosed in the Council's 2012/13 accounts.
In bringing the discussions to a close, David Ewart, Chair, noted the external auditor’s issue of full certificates as set out in the report and that Brent was not in the group of local authorities facing serious financial difficulties. He endorsed the advice by the external auditors for the Council to be mindful of the challenges ahead and maintain its focus.
RESOLVED:
that the external audit progress report be noted.
Supporting documents: