The Committee considered a report setting out the external audit findings of the 2012/13 accounts.  The external audit of the accounts began on 15 July and the Audit Findings Report, attached at Appendix A to the Committee report, set out the findings and changes to the accounts agreed as part of the process.  A draft Statement of Accounts had been reviewed by a working group from the Audit Committee.  Since the review by the Working Group the Auditors had reviewed the accounts and the following changes had subsequently been made:

a.        Sevenoaks Environmental Park had been erroneously included as a Community Asset at the end of March with a ‘carrying value’ of £171,000.  The lease of this park expired in September and was not renewed.  The balance sheet had been adjusted.  This adjustment did not impact on the amount transferred to the earmarked reserves.

b.        The service analysis within the Comprehensive Income and Expenditure statement had merged the costs of ‘Central Services to the public’ and ‘Corporate and Democratic core’ which did not meet the disclosure requirements; the expenditure and income lines had now been disaggregated.

c.         Grant Income - this related to the accounting treatment of grant income received from central government and used to fund projects such as Disabled Facilities.  In previous years this had been treated this as non-specific grant income, however Grant Thornton had advised that this should be treated as service income. 

d.        Housing Benefit Subsidy –the housing benefit subsidy (£34.2m in 2012/13) was now disclosed as a grant item. 

The Head of Finance reported that Grant Thornton, the District Auditors, anticipated giving an unqualified opinion.

Mr Andy Mack, the District Auditor, thanked all Officers who had been involved in the Audit process and reported that the proposed unqualified opinion given to the Statement of Accounts was essentially a ‘clean bill of health’ and that there were no material issues arising from the accounts.  The Auditors had made a recommendation in their report suggesting that the Council should consider building into the financial statements preparation process a comprehensive quality assurance review to identify errors and this had been agreed by Officers.

A Member noted that the audit report assumed a basic financial knowledge that many people who may read the document may not have.  In response the District Auditor reported that new national guidance had led to very prescriptive Statements of Accounts across Local Authorities.  Grant Thornton were now encouraging Local Authorities to produce Annual Reports which were not bound by the strict guidance.

It was also suggested that it would be helpful to give an indication of when the valuation bands referred to in the glossary were set.

The Committee considered issues around net pensions liability and the District Auditor confirmed that there was nothing to concern Members at this time.

Mr Geoffrey Bannister from Grant Thornton reported that Sevenoaks District Council had a very good track record in terms of Use of Resources and Value for Money.  There were a number of areas where the Council was performing very well and the Auditors had given an unqualified opinion in terms of Value for Money.

The Auditors tabled a standard Audit Letter, written from the Chief Executive to Grant Thornton and asked the Committee to confirm that it was satisfied that the letter contained no factual inaccuracies.  Members confirmed that they were happy for the Chief Executive to sign the letter, subject to paragraph 15 being slightly reworded.

Public Sector Equality Duty

Members noted that consideration had been given to impacts under the Public Sector Equality Duty.

The Committee expressed its gratitude to the Finance Team and the District Auditors for the extensive work that had been undertaken in producing the Statement of Accounts.

Resolved: That

(a)   the Statement of Accounts 2012/13, as amended, be approved; and

(b)   the audit letter of representation, as amended, be approved.