Agenda item

Report of the Director for Finance and Corporate Services

Mr Hoose, from Mazars, the Council’s external auditors presented the Audit Completion Report in Appendix A and the Management Representation Letter in Appendix B, which reports to those charged with Governance the key conclusions in the audit process 2021/22 financial year.

Mr Hoose explained that there had been a delay in issuing the Audit Completion Report due to delays in the outcome of the Nottinghamshire authorities Pension Fund audit which feeds into Rushcliffe’s accounts in addition to a national issue relating to the treatment of infrastructure assets which were out of the Council’s and Mazars control.

The Group were advised that Mazars are also required to report their Value for Money conclusion within 90 days of the Audit Completion. Mr Hoose explained this had not yet been completed, it was noted that Mazars had not identified any weaknesses in the Council’s arrangements and do not anticipate any issues.

The Audit Completion report identified the key risks as follows:

·       Pension Scheme valuations in the estimated asset values used by the Actuary to prepare the Council’s IAS19 report. Management has chosen not to amend the accounts on the grounds of this not being material which was agreed by Mazars.

·       There were a small number of minor disclosure amendments and two adjusted misstatements which were reported to officers in the Internal Control recommendations. It was noted that officers would be putting controls in place.

·       The deadline for signing off the Statement of Accounts had not been met due to delays in the auditor’s gaining assurance from the Pension Fund Adjustment again for a third year, resulting in a Prior Period Adjustment (PPA) requiring amendments to some infrastructure assets in the 2020/21 balance sheet which has had a knock ion effect on the 2021/22 balance sheet.

·       A further PPA was required in relation to the recognition of a deferred capital receipt in the 2020/21 accounts. The Director – Finance and Corporate Services did not agree with it being a PPA but was not prepared to risk the accounts being qualified.

In concluding, Mr Hoose advised there had been no significant issues during 2021/22 financial year. The Group were presented the Management Representation Letter at Appendix B of the report. The letter confirmed that the Council is satisfied with the validity of the financial statements provided by Mazars.

The Chairman thanked Mr Hoose and acknowledged the accounts would be completed and confirmed in the next week. In respect of the next financial year, it was noted that due to delays and timescales the Statement of Accounts may be delayed again for the meeting in September 2023. The Group were also advised that from 2024 Mazars would be taking on the Audit of the Nottinghamshire Authorities Pension Scheme.

The Chairman commented on the Prior Period Adjustment (PPA) in respect of deferred capital receipts for the sale of Sharphill and asked whether this may cause future issues in the accounts. Mr Hoose explained this should have been shown as a debtor in the accounts with a corresponding entry in unusable reserves, which overall had no impact on the 2021/22 balance sheet and this had been resolved with the PPA entries.

The Group observed the healthy and frank conversations between Officers and auditors and expressed their thanks to Mazars and Officers.

It was RESOLVED that the Governance Scrutiny Group:

a)    Approve the findings of Mazars Audit Completion Report (Appendix A)

b)    Approve the Management Representation Letter (Appendix B)

c)     Receive at a later date a follow up letter from Mazars in relation to the significant matters outstanding.