Statement of Accounts 2018/19 - Final Audited Published Accounts
Carolyn Haynes (Financial Controller), Andrew Hardingham (Service Director for Finance) and Geri Daly (Grant Thornton) presented the Statement of Accounts 2018/19, the Audit Findings Report and the Letter of Representation to the Committee -
(a) The Council’s draft Statement of Accounts for year ending 31 March 2019 was prepared and approved ready for our external auditors by the Service Director for Finance on 31 May 2019.
(b) The Accounts had now been audited by Grant Thornton UK (GTUK) and were being presented to Audit Committee to note the changes between the draft and final version and to approve these changes prior to final publication.
(c) The report also contained a copy of details of the management responses to the ‘Letter to Management’ which was discussed at the Audit & Governance Committee on the 11 March 2019.
(d) Grant Thornton summarised the key findings and other matters arising from the statutory audit of Plymouth City Council (‘the Council’) and the preparation of the Council's financial statements for the year ended 31 March 2019 for those charged with governance.
(e) Grant Thornton provided a further update following the last two Audit Finding Reports which were presented to Plymouth City Councils Audit and Governance Committee on 22nd July 2019 and the 23rd September 2019.
(f) The Accounts and Audit Regulations 2015 required Local Authorities to publish their financial statements by 31 July each year, irrespective of whether the audit has been completed. The Council complied with this date and published the draft accounts as well as a notice explaining why they were still unaudited.
(g) Audit work was undertaken on site from late June through to December 2019. Initially, there were delays to the completion of the audit work as a result of Grant Thornton resourcing issues.
(h) As the audit had progressed, Grant Thornton had identified a number of errors within the accounts that have required adjustments by management. The area where this has occurred the most is in capital grants, the valuation of property plant and equipment (PPE) and the detailed disclosure notes required for Financial Instruments. Our work on the valuation of PPE has identified a prior period adjustment (PPA) which management have included in the revised version of the financial statements. Our findings to date are summarised on pages 5 to 15.
(i) Had identified seven adjustments to the Statement of Financial Positional – one was a PPA as a result of the need to process the valuation of the Energy to Waste Plant for 2017/18, misclassification of investment properties which should have been recorded in other land and buildings and an error in the accounting for capital grants.
(j) The amendments made in 2017/18 and 201819 had increased the net worth of the Authority by £5.931m. Unusable reserves had also increased by the same amount.
(k) There had been six changes to the Council’s Comprehensive Income and Expenditure Statement which had resulted in an increase in the surplus/ financial outturn of the Council by £8.77m for 2017/18.
(l) Identified a possible material upward valuation regarding those assets revalued on a depreciated replacement cost basis (DRC) for those assets that have not been valued prior to 2017. Grant Thornton believe that the upward valuation will be circa £29m and the Council’s valuer is currently reviewing this and applying the necessary indices to arrive at an accurate figure. Once this has been determined the Council will make the necessary adjustments in the accounts.
(m)Audit adjustments to date were detailed in Appendix B. We have also raised recommendations for management as a result of their audit work in Appendix A. The Councils previous External Auditors did not make any recommendations in 2017/18 and so no follow-up work was required.
(n) Our work is in its finalisation stages. We have listed below the items that will need to be completed prior to the audit opinion being issued.
(o) Would also require specific representation from management and the Audit and Governance Committee for those items that had not beenadjusted.
The key matters in progress as at 3rd December 2019 are:
• Completion of our work on the valuation of Property Plant and Equipment;
• Review and testing of the revised financial instruments disclosure notes;
• Review of the amended accounts and disclosure notes;
• Receipt of management representation letter;
• Review of the final set of financial statements, including the Annual Governance;
• Review of Post Balance Sheet Events;
• Our own internal quality checks.
Members discussed –
· The lateness of the reports received from Grant Thornton giving insufficient time to review all information;
· Why in Management’s view the impact of the McCloud ruling was not material for Plymouth City Council and the fact that the financial statements would therefore not be adjusted;
· Raised concerns about the use of the reserves and what the plans were to replenish them.
The Audit and Governance Committee -
1. approved the Statement of Accounts for 2018/19 attached as Appendix B which have now been audited by GTUK for final publication.
2. noted the amendments made to the Statement of Accounts for 2018/19 as agreed with the Auditor and outlined in Appendix C.
3. ensured the Letter of Representation attached as Appendix D was authorised and submitted to the Auditor.
- Restricted enclosure
- Final Statement of Accounts Report 1819, item 56. PDF 130 KB
- Appendix A - Statement of Accounts 201819 Report, item 56. PDF 36 KB
- Appendix B - 2018_19 Statement of Accounts (FINAL), item 56. PDF 3 MB
- Appendix C - Changes between Unaudited & Final Statement of Accounts 18-19, item 56. PDF 104 KB
- Appendix D - Plymouth City Council LoR draft 201819, item 56. PDF 331 KB