To consider the external auditors audit finding report for the year ended 31 March 2019.

The chairman of the committee introduced the item by highlighting that a supplement had been published the previous day.    The pressure on the external auditors and officers was appreciated but the committee would not like this to be seen as a precedent and requested that the external auditors and officers could consider how this report could be provided in reasonable advance of the meeting in future.   In order to give the committee time to read the supplement, the meeting adjourned at 10.53 am and re-commenced at 11.23 am.

The external auditors, Grant Thornton, presented the report and indicated that any page numbers referred to would be those in the supplement which had been published the previous day. 

Grant Thornton requested that the first paragraph on page 13 of the supplement issued should be disregard as it was a typographical error.   The rest of the references in the audit findings report were accurate.   Grant Thornton apologised for the error which had not been picked up as part of their quality assurance process.

Grant Thornton outlined the statutory role of the committee and that the level of reporting was necessary in order to comply with auditing standards.    

Grant Thornton reported that they could not certify the completion of the audit.  This was for the same reason as the last 2 years.   Progress had been made on the issue but it cannot be resolved at this moment in time. 

Grant Thornton could not issue the value for money opinion.    This related to work which SWAP were undertaking and it was anticipated that this would be resolved by time of the September meeting and a revised audit findings report would be re-issued.    It was confirmed that there was no statutory deadline for issuing the value for money opinion. 

The materiality basis had changed from council expenditure to asset base which was to resolve the issues with materiality in previous years.   Grant Thornton confirmed that there would have been no matters reported under the previous materiality levels so moving the materiality levels had not had an impact on the audit. 

In discussion of the item, the following points were raised:

·         The de minimis level of accruals had been moved which now meant that the accounts were more accurate;

·         The valuation date of assets had moved so that it was closer to end of the financial years.   This meant that the estimates at year end were more accurate.

·         The council had amended the accounts to take in account the McCloud judgement.   The McCloud judgement was in relation to pensions and liability and was as a result of the government losing a legal claim.    It was noted that the McCloud judgement was subject to further legal challenge and reviews but nationally auditors had come to the conclusion that the liabilities should be reflected in the statement of accounts.  It was noted that Herefordshire was a member of the Worcestershire Pension Scheme and not the Herefordshire and Worcestershire Pension Scheme.

·         The Hoople pension issue was now reflected in  ...  view the full minutes text for item 376