Agenda item

2.10

The 2015 Accounts and Audit Regulations set out requirements in relation to internal control, the exercise of public rights in relation to the accounts and rules for the preparation, approval and publication of the statement of accounts. The 2015 Regulations came into force on 1 April 2015 for financial years starting on or after that date. The report highlights changes compared to the previous 2011 Regulations and the implications for the Council.

The Committee is RECOMMENDED to:

(a)            note the report;

(b)            agree that the draft statement of accounts will no longer be presented to the Committee for information;

(c)            note that the draft Annual Governance Statement will be considered by the Audit Working Group before publication;

(d)            agree that the Annual Governance Statement should only be presented once to the Committee, in its final draft for approval in September. 

The Committee had before them a report (AG5) which set out the requirements of the 2015 Accounts and Audit Regulations in relation to internal control, the exercise of public rights in relation to the accounts and rules for the preparation, approval and publication of the statement of accounts. The 2015 Regulations had come into force on 1 April 2015 for financial years starting on or after that date. The report highlighted changes compared to the previous 2011 Regulations and the implications for the Council.

Stephanie Skivington in introducing the report explained that the 2015 Regulations made clearer the requirement to maintain a sound system of internal control, broader than just in relation to financial control, with increased emphasis on risk management and corporate governance. It also clarified that the scope of internal audit covers these areas, in line with proper practice.

As previously highlighted to the Committee, the 2015 Regulations explicitly named proper practice for internal audit as the Public Sector Internal Auditing Standards and removed the requirement for an annual review of the effectiveness of the authority’s internal audit function.

The 2015 Regulations further imposed a new requirement to prepare a narrative statement to be published alongside the statement of accounts and annual governance statement each year, to include comment on the authority’s financial performance and economy, efficiency and effectiveness in its use of resources over the financial year.

The deadlines for preparing the statement of accounts and its publication were brought forward by the 2015 Regulations. The revised deadlines would take effect for the 2017/18 accounts, with transitory provisions allowing for the completion of the 2015/16 and 2016/17 accounts within existing deadlines.

In previous years the draft statement of accounts was presented to the Committee for information ahead of the public inspection period; however this was not a requirement of the 2011 Accounts and Audit Regulations. Given the new requirements set out above, it would not be possible to present the draft accounts to a meeting of the Committee before the public inspection period commences. In view of this the Committee was asked to agree to no longer receiving the draft accounts. The Committee would still receive the statement of accounts to approve in September (or earlier in accordance with the revised timetable) following the audit and Committee members would be able to access the draft statement of accounts on the website once they had been published and raise any queries with officers.

Similarly, the timing of the Committee receiving the annual governance statement (AGS) would need to change as a result of the requirement to publish it alongside the draft statement of accounts prior to the start of the public inspection period. For 2015/16 a draft of the AGS would be considered by the Audit Working Group on 26 May 2016 and any changes would be incorporated into the published version. The Audit & Governance Committee would not receive the draft version before it was published, however would consider and approve the final version in September. In view of this the Committee was asked to agree to no longer receiving the AGS in July. The Committee would receive some of the key independent reports that inform the AGS at its meeting in April, such as the Annual Report of the Monitoring Officer and the Fire & Rescue Service Statement of Assurance. A final draft of the Annual Report of the Chief Internal Auditor will be available for the Audit Working Group meeting in May and would be reported to the Committee in July.

Councillor Bartholomew expressed concern that members of the public would assume that the accounts had been seen by the Audit Committee.  Ms Skivington replied that there would be a statement on the website stating that the accounts were draft and subject to Audit.

Mr Dyson added that the Annual Government Statement would go through the audit Working Group and that could also be made clear when published.

RESOLVED: to

(a)          note the report;

(b)          agree that the draft statement of accounts will no longer be presented to the Committee for information;

(c)          note that the draft Annual Governance Statement will be considered by the Audit Working Group before publication;

agree that the Annual Governance Statement should only be presented once to the Committee, in its final draft for approval in September.