Agenda item

(1)        Interim Audit Completion Report 2019-20

(2)        FinalAudit Completion Report 2019-20

(3)        Northumberland Pension Fund - Follow Up Letter

(4)        Audit Completion Report 2019-20 - Pension Fund

(1)      Interim Audit Completion Report 2019-20 and 

(2)      Final Audit Completion Report 2019-20 

Karen Murray from Mazars drew members’ attention to the key points of the report, including significant risks, internal control issues and adjustments made. Member points included:-

The Chair commented that property plant and equipment valuation was a complex issue to get sorted. If best estimate figures were being worked on, he asked if these would be adjusted at some point. Ms Murray advised that the value did need to reflect that there was a concern that values could be affected by the pandemic. This was a standard position to be in and would correct itself this year. The Chair asked whether, if the figures were very wrong, would the Authority have to wait a year to find that out. Ms Murray confirmed that Mazars were satisfied that the figures which were in the accounts now were materially correct.

Councillor Dickinson asked about the assumptions made regarding the down value of the airport. Other authorities appeared not to have taken the same view as Northumberland and he asked how confident officers were with what was in the report. Ms Murray advised that she was happy with what was in the report but would take the question back regarding what others had done and the level of consistency. 

The Chair asked whether the same control issues were coming up year after year. Ms Murray replied that Mazars had followed up on the recommendations which had been made by their predecessors, but it was difficult for her to say if the same issues were recurring because this was their first year. 

Councillor Dickinson asked about council tax and how floor space was calculated for this. Ms Murray advised that there was no correlation between floor space and valuations for Council tax, which were assessed by the Valuation Office. This valuation put properties into a council tax band and the appropriate council tax was then levied for that band by the Council. It had no influence on the valuation of the property itself. 

Councillor Jackson commented that the accounts were from 18 months ago and therefore very late and asked why this was. Ms Murray replied that normally the Council should have its accounts ready by the end of May with audit competed by the end of July. MHCLG had recognised the problems associated with the pandemic and had given authorities some leeway in the timetable. The 2019-20 accounts did not have to be complete until the end of August, with audit to be completed by the end of November. But because of the change in auditors at Northumberland this had not been possible. Issues had come up which paused the work in the Autumn of 2020 and the audit had resumed at the start of 2021. 

Councillor Jackson commented that it was unusual to pause an audit and suggested that Cameron Waddell should provide an explanation about this to members. Councillor Dickinson advised that an explanation on this had been provided by Cameron to the previous Audit Committee and this could be recirculated. The Chair advised that he would raise this with Cameron for the next meeting. 

Councillor Oliver commented that there was no information on the VFM conclusion. He asked how the accounts could be signed off with outstanding VFM issues to be resolved. Cameron had provided an update at the last meeting on the VFM work but there had been nothing further. Ms Murray advised that Cameron was still working through some of the VFM issues. She would confirm that Cameron expected to issue an opinion on the financial statements without concluding on the VFM arrangements, because that could be done separately with that part of the audit left open. This did happen from time to time. The accounts could be approved by the Committee and Mazars could give an opinion on the financial statements but not on VFM, and this would be reflected in the audit report with the work completed in due course.  

Councillor Jackson commented that there were some VFM issues raised by the previous auditors, so this issue had been going on for some time. He queried when there would be some more detail on the VFM opinion. Ms Murray advised she would try and get an update and report back on the likely timescale. 

Councillor Oliver commented on the omission of a significant exit payment in the draft accounts and asked if this was an oversight. Ms Murray advised that that there was nothing to indicate that this was anything other than an accidental oversight. 

Councillor Oliver referred to the deferral of loan repayments to the airport and sought clarification that loan repayments were being pushed back not being dispensed with. Mrs Willis confirmed this was the case. 

With regard to the management representation letter, Councillor Oliver sought reassurance that everything which needed to be reported, had been. Mrs Willis advised that she was satisfied that everything which needed to be disclosed in the management representation letter had been. 

RESOLVED that the reports be received. 

(3)      Northumberland Pension Fund – Follow Up Letter and 

(4)      Audit Completion Report 2019-20 – Pension Fund 

Ms Murray confirmed that all work in this area was complete and had been reported to members. She highlighted the main points of interest. 

Councillor Dickinson raised the issue of disclosures being marked as red on the traffic light system and asked if there was still an issue. Ms Murray confirmed that all outstanding information had been provided and the disclosures updated.

Mr Topping raised the responses from the Council to recommendations regarding IT and internal controls and suggested that these were checked to ensure that they were as tight as they needed to be.

RESOLVED that the reports be received.