Issue - items at meetings - Audit of Accounts Ended 31st March 2010: Letter of Representation

Report of the Director of Finance & Resources (copy attached).

33.1      RESOLVED- That the Audit Committee:

1)      Note the adjusted misstatements to the 2009/10 Statement of Accounts

2)      Approve the advice given on the unadjusted misstatements and that they should not be adjusted

3)      Note the position statement regarding the Annual Report and Summary of Accounts

4)      Note the results of the Public Inspection of the Accounts

5)      Approve the letter of representation on behalf of the Council.

34.1.         The Committee considered a report from the Director of Finance & Resources regarding the Statement of Accounts 2009/10 Update.

34.2         The Acting Assistant Director of Financial Services presented the report and noted that the Audit Commission had identified two unadjusted misstatements. The first highlighted the fact that no partners in the pooled budgets in which the council participates are accounting for pooled budgets as joint arrangements that are not entities which did not comply with the requirements of FRS9 and will not comply with the International Accounting Standard 31 for 2010/11. The report recommended that the changes were not material to the accounts and was in keeping with previous years and was the same accounting treatment used by the council’s partners. The suggested adjustment should be rejected with the accounting treatment to be revised for 2010/11 to comply with the new accounting standards.       A second adjustment recommended by the Audit Commission was income and expenditure related to investment properties which was currently accounted for within the Council’s net cost of services disclosed in the Income & Expenditure Account. It was suggested that income and expenditure should be classified as relating to trading operation and be disclosed as part of the Council’s net operating expenditure. The Acting Assistant Director of Financial Services explained that the council would be undertaking a full review of its investment properties and related income and expenditure as part of the implementation of IFRS. The adjustments were not material to the accounts and it was therefore not recommended to make the changes stipulated. In addition, an action plan had been put into place that would address the uncertainties in the financial statements the priorities being the payroll system and pensions liability.

34.3         Councillor Smith asked if pension contributions would at any stage be reviewed.

34.4         The Acting Assistant Director of Financial Services responded that employer pension contributions are set for a three year period following each actuarial triannual review. He stated that it was likely that there would be further stepped increases in the employer’s contribution rate due to the ongoing deficit in the pension fund. . The Director of Finance and Resources supplemented that employee pension contribution could only be changed at national government level.

34.5         Councillor Randall asked what proportion of council tax income was used for pension contribution.

34.6         The Director of Finance and Resources replied that she did not have that figure to hand but would be able to supply details after the meeting.

34.7         RESOLVED- That the Audit Committee:

1)      Note the adjusted misstatements to the 2009/10 Statement of Accounts

2)      Approve the advice given on the unadjusted misstatements and that they should not be adjusted

3)      Note the position statement regarding the Annual Report and Summary of Accounts

4)      Note the results of the Public Inspection of the Accounts

5)      Approve the letter of representation on behalf of the Council.