Agenda item

Report of KPMG

The KPMG Auditor introduced the report as circulated.  In order to provide some context to the report he first explained that at the same time as what was always a busy period of accounting the council had launched the new GO financial system.  KPMG had known for some time that this would pose additional risks and in recognition of this the council had brought in additional resources.  Officers had done a good job inspite of the situation and whilst the accounts couldn’t be descried as excellent as they had the year before, they had been produced in advance of the deadline and subject to the receipt of a signed management representation letter, KPMG would be issuing an unqualified audit opinion on the accounts

The KPMG Auditors gave the following responses to questions from members of the committee;

• The audit was undertaken on the old system as the new system (Agresso) had not gone live until 1 April 2012.  The issue, as expected, was that officers were not able to dedicate as much time as they previously had as a result of the additional pressure of implementing a new system. 
• In relation to item 2 / appendix 1 (the timeliness of bank reconciliations) the issue had been that the systems were not interfacing.  Officers were working hard to rectify the issue, meet the deadline of the 31 October and then undertake weekly reconciliations.
• Instances where the responsible officer had been listed as ‘GO Corporate team member’ had been made, as given the restructure it had not been possible to name an individual at the time.  Individuals had since been identified. 
• It was doubtful that the quality of accounts this year would negatively impact the audit fee from Grant Thornton as this had already been set.  This fee would likely reduce in the coming years by approximately 40% as the Audit Commission reduced their operating costs.  KPMG had incurred overruns and this would be discussed with the Director of Resources.
• KPMG had concluded that the two Elector Challenges did not impact on the statement of accounts and these would be resolved with a letter to the challenger.
• Any outstanding issues from this year and any still outstanding from the previous year would be highlighted to Grant Thornton to monitor through to conclusion. 
• The appendices did focus on property but this was because KPMG had less issues with day to day transactions and more with the technical area of fixed assets.

Rachael Tonkin, KPMG Auditor, had been asked to produce a report on the handover process between KPMG and the new external auditors Grant Thornton.  Rather than produce a separate report she has chosen to include the information in this report (page 12).  The table summarised the approach and timetable of the audit handover.

The Chairman acknowledged that this would be the last meeting that KPMG would attend and took the opportunity to formally register thanks for the support they had provided over the years.  He felt they had served the council well and set high standards for Grant Thornton to follow. 

Councillor Chard thanked all the council officers involved in the production of the statement of accounts for their efforts in difficult circumstances.  He hoped next year would be easier for all concerned. 

Upon a vote it was unanimously

RESOLVED that the management representation letter be agreed and signed by the Chairman of the Audit Committee.