To receive the external auditor’s annual audit letter for 2016/17 and determine whether further action or inclusion in the committee’s work programme is appropriate.

The chairman used his discretion to move the external audit progress report to the second item. 

The external auditor presented the report.  It was noted that the annual audit letter was a condensed version of the detailed audit findings discussed at the September meeting and was a statutory requirement.     The audit opinion had been given via the delegated authority granted to the chief finance and S151 officer at the meeting held on 20 September in relation to the signing of the accounts. 

Following a query from a member, the external auditor confirmed that all material amendments had been made to the statement of accounts and there was nothing in the accounts which would cause the committee concern.  The external auditors would wish to discuss with the council about achieving exemplary / outstanding accounts in the future. 

Following a query from a member, external auditor explained the following:

Materiality - they exercise judgement over materiality due to nature or systematic issues.   Materiality was not a straightforward judgement and was used for different purposes and should not be used in a literal sense as they do not look at a set financial figure but look at a sample of figures.

Valuation – there were a range of different definitions in relation to valuation.  Typically for a council, property valuations were difficult as they  cannot be re-valued every year as would be too expensive.   The valuation figures were discussed with officers. 

Value for money – they used the guidance and legislation to determine this.   Using Blue School House as an example, there were deficiencies in   governance but there was no evidence of widespread and systematic deficiencies.  Following a query from a member in connection with the small holdings being valued at £2m and then marketed at £25m, the external auditor commented that they were probably not reflecting their true valuation but that this would have been disclosed in a key decision in connection with the sale of the smallholdings.

RESOLVED

That the report be noted