Agenda item

To submit the statutory financial statements for 2016/17.

a)         To submit the revised statutory financial statements by the Head of Finance for the Committee’s approval.

b)(i)      To submit the formal “ISA 260” report to “those charged with governance” by external auditors Deloitte on behalf of the Auditor General for Wales on the 2016/17 Statement of Accounts for Gwynedd Council.

b)(ii)     To authorise the Committee Chairman and the Head of Finance to sign the “letter of representation” on behalf of the Audit and Governance Committee, which is charged with governance in relation to approving the statutory financial statements for Gwynedd Council (Appendix 1 to the report of the external auditors Deloitte on behalf of the Auditor General for Wales in (b)(i) above)

c)(i)      To submit the formal “ISA 260” report to “those charged with governance” by the external auditors Deloitte on behalf of the Auditor General for Wales on the 2016/17 Statement of Accounts for the Pension Fund.                                     

c)(ii)     To authorise the Committee Chairman and the Head of Finance to sign the “letter of representation” on behalf of the Audit and Governance Committee, which is charged with governance in relation to approving the statutory financial statements for the Pension Fund (Appendix 1 to the report of the external auditors Deloitte on behalf of the Auditor General for Wales in (c)(i) above)

i)       Statement of the Accounts

         The Head of Finance Department submitted the revised statutory financial statements for approval by the committee. He stated that the reports by Deloitte on behalf of the Wales Audit Office noted the main changes to the accounts since the pre-audit version was submitted to the Committee’s meeting on 13 July.

ii)      Report of the Appointed Auditor on the Audit of Financial Statements

a)      The Council’s Accounts

         In accordance with the Annual Audit procedure, namely the Appointed Auditor’s report for those charged with governance, the report by Deloitte on behalf of the Auditor General for Wales was submitted by Ian Howse, Financial Audit Engagement Leader, Deloitte.

         It was reported that the Auditor General intended to issue an unqualified audit report on Gwynedd Council’s accounts for 2016/17.

         The following main observations were made:

·         There were no uncorrected misstatements to report;

·         There was one misstatement that had been corrected to their satisfaction;

·         No matters which required attention had been highlighted by the audit team in relation to the significant risks that were tested;

·         The accounts team were praised for the quality of the accounts and thanked for their cooperation with the Deloitte audit team.

          A member noted that he was pleased with the praise for the accounts team.

In response to an enquiry by a member regarding the provision of bad debt, the Head of Finance Department stated that the accounts gave a snapshot of the situation on the final day of accounts. He explained that there was less likelihood of collecting older debts and that the Council was using an increasingly higher percentage of "loss" for the previous years' debts. He noted that the officers agreed with the auditor's recommendation, namely - "... that the percentages used to generate the sundry debts provision are formally reviewed on an annual basis and that an analysis of collection rates is used to inform the percentages determined."

In response to a question by a member, the Financial Audit Engagement Leader for Deloitte stated that the level of bad debt provision by the Council was fairly consistent with other councils.

b)      Gwynedd Pension Fund Accounts

The Deloitte Financial Audit Engagement Leader noted that the Auditor General intended to issue an unqualified audit opinion on the accounts of the Gwynedd Pension Fund for 2016/17.

The following main observations were noted:

·         In relation to the misstatements that were not corrected, the auditors' examinations found that there was a judgmental misstatement on properties and private equity investments. As this was a matter of opinion, they were satisfied that it would remain uncorrected;

·         No new recommendations stemmed from the financial audit work for 2016/17 and details of the follow-up work on the 2015/16 recommendations were to be found in Appendix 3 of the report.

The Chair noted that he was pleased that the Council was in a good position and was fulfilling the requirements.

The Cabinet Member for Finance stated his appreciation of the Deloitte auditing team’s work. He added that he was pleased that the Auditor General intended to issue unqualified audit reports that reflected the good work produced by the officers in preparing the accounts. He expressed his appreciation of the work.

RESOLVED that the Audit Committee, with the power delegated by the Council to be “those charged with governance” in relation to approving the statutory financial statements and the relevant audits, approve the amended statutory financial statements, accept the related reports by Deloitte on behalf of the Auditor General for Wales, and authorise the Head of Finance Department and Chairman of the Committee to sign the "letters of representation" relating to the Council's accounts and the Pension Fund accounts and submit them to the Auditor General for Wales.