The Committee welcomed the District Auditor – Andy Mack, Audit Manager  - Richard Smith and Team Leader – Lauren Massoud from The Audit Commission.  The District Auditor advised that with reference to the two main areas - Statement of Accounts and Value for Money, it was good news.  With regards to the Financial Statements he was happy to issue an unqualified opinion.  It had been a challenging year as it was the first time the Statement of Accounts, in common with those for all other local authorities, had been compiled in line with International Financial Reporting Standards (IFRS). The Council had done a good job of bringing the local authority accounting in line.   There was nothing to worry about  and no fundamental amendments, overall there were good financial systems and controls in place.  With reference to Value for Money, he was also happy to issue an unqualified opinion on the Council’s economy, efficiency and effectiveness in its use of resources stating that the Council had performed well and shown good practices such as its partnership working.  There was robust and resilient long and medium term financial planning  which was managed well by a small but efficient team.

In response to a request for a reduction in the size of the Statement of Accounts, the District Auditor advised that the bulk was due to the detail required by the new International reporting standards which had been brought in as a result of public concerns over misappropriation of funds.  However the Audit Commission was lobbying CIPFA, the Government and the CLG for the ability to produce a shorter summary paper for Members as they were not expected to know and understand every last nuance but needed to receive a report that gave them a broad understanding and enabled them able to ask relevant and informed questions.  He also undertook to meet with officers and see if there was anything that could be done in the meantime, and noted that a Sevenoaks specific scene for the front picture of future reports would be more favoured.

With regards to the abolition of the Audit Commission, the District Auditor explained that the date for abolition by the end of 2012 had been pushed back due the complexity.  It would now happen as a two stage process.  Stage one was the privatisation of the Audit Commission staff by the end of 2012, to avoid redundancy costs and in order to establish a more competitive audit market from which to be able to select tenders by 2015 (stage two).  The Leader of the Council addressed the Committee advising that it was not a very competitive market and offered little choice with many of the larger firms not interested in tendering.  There was also the possibility that instead of lowering fees due to the competition that fees may increase as a result of less market choice.

A Member asked whether there was any news from the Appeal at the Supreme Court concerning The Icelandic Bank, as to what proportion, if any, of the £1M would be retrieved.  The District Auditor understood that a judgment was due imminently but understood there may be a delay.  The Head of Finance and Human Resources reported that she had been advised that they would be informed of the decision in October.

In response to various queries the District Auditor advised that the reporting format was dictated.  Private Finance Initiatives (PFIs) had previously been encouraged as off balance sheet accounting.  In his opinion this had been wrong and the new format forced them back onto the balance sheet.  An error in the note referring to Officers’ Remuneration and other employees was noted for correction. 

Resolved:      That the Statement of Accounts 2010/11, be approved.