Agenda item

1:30

Report to follow.

Maria Grindley, Audit Director, Ernst & Young, introduced the external auditor’s Annual Results reports for the year ending March 2014. She highlighted that there was still outstanding work to be completed before the Annual Results could be signed off, but that this was likely to be completed during the week following the Committee meeting. She added that a notice would be circulated to the Committee once this was completed.

Ms Grindley drew attention to Pages 20-21 of the addenda which highlighted significant value for money risks. She added that additional work with regards to assessing value for money risks had been carried out in response to the County Council’s decisions on the position of the Chief Executive.

Councillor Lovatt questioned whether the recommendation at the bottom of Page 21 of the addenda with regards to the Council’s decision to join the Integrated Business Centre (IBC) partnership with Hampshire County Council, indicated that the external auditor had major reservations about the decision.

Ms Grindley explained that it was not for the external auditors to provide an opinion on whether the decision to join the IBC was a good one or not. Rather, the recommendation reflected the concerns that Ernst & Young had regarding the lack of market testing that was carried out by the Council before the decision was made to join the IBC.

Lorna Baxter, Chief Finance Officer, added that this was a lesson to be learned, but emphasised that the decision of the Council was to join a partnership to provide back office functions, rather than outsource those functions completely. However, she accepted that the Council could have done more to tease out what other authorities may have been able to offer.

Dr Jones added that the report read as though it was advocating that those back office functions should be privatised within the next 5 years and that the Council would be criticised were that not to happen.

With regards to Page 20 of the addenda, Councillor Hards queried whether it was possible to give an overall view of risks associated with securing financial resilience since certain risks can be imposed upon the Council from outside of the organisation.

Ms Grindley answered that, as external auditors, Ernst & Young would require assurance that the Council was taking into account everything that it was aware of and being realistic with its medium term financial planning. Ernst & Young would comment on how well the Council assessed the likelihood and impact of such external risks.

Ms Grindley informed the Committee that, as it was a necessity of her role as an external auditor with Ernst & Young to rotate between organisations following a period of time, this would be her last meeting with the Committee and that, as of the next meeting of the Committee, Mr Mick West would attend as a representative of Ernst & Young. Ms Grindley took the opportunity to say thank you to the Committee.

RESOLVED:  to note the report and to thank Maria Grindley, Ernst & Young, for her work with the Committee.