Agenda item

(To receive a report by Sue Maycock (Head of Finance – Corporate) and Mike Norman (Senior Manager, Mazars), which  presents the final Statement of Accounts for Lincolnshire County Council and the Lincolnshire Pension Fund for the financial year 2018/19. NOTE: Appendix A is 'to follow')

Consideration was given to a report by Michelle Grady (Assistant Director – Strategic Finance), which presented the final Statement of Accounts for Lincolnshire County Council and the Lincolnshire Pension Fund for the financial year 2018/19.

The Audit Committee had been presented with the draft Statement of Accounts for 2018/19 for scrutiny and comment at its meeting on 17 June 2019.  Since that meeting the Council's external auditors, Mazars, had largely completed their audit work on the draft statements.  Mazars' Audit Completion Reports were detailed at Appendix A to the report.  A copy of the Lincolnshire County Council's Statement of Accounts 2018/19 was detailed at Appendix C to the report.

The Assistant Director – Strategic Finance highlighted Appendix D to the Committee, which highlighted amendments to the Statement of Accounts 2018/19 since the meeting of the Audit Committee on 17 June 2019.  The Committee was advised that following further developments in a pensions legal case after the financial year end revised pensions valuation reports had been commissioned from the Council's Actuary and, as a result of this, amendments to the accounts were in progress for the main accounts and had been made for the pension fund accounts.  This was a national issue affecting all local authorities.  

The Committee was advised that, in relation to the draft Audit Completion Report for the Lincolnshire Pension Fund, based on the audit work to date there was one unadjusted identified mis-statement for 2018/19, which was just above the 'trivial' threshold for reporting to the Committee.  No other material mis-statements had been identified and no material amendments had been made to the draft financial statements.  Details of the unadjusted mis-statement could be found on page 34 of the agenda pack.

Furthermore, it was advised that during detailed testing, Mazars had identified a net £710k difference between the Investment Asset balances recorded in the financial statements and the latest valuation reports.  The differences were due to differences between the valuation reports available to officers when the draft financial statements were prepared and the latest valuation reports being based on up to date information. 

The Committee was assured that the differences, which were attributable to the timing of the availability of information, were not unusual and the difference was not to be amended by Management.  Management would review its accounting practice in relation to the cash flow changes and it was expected changes would be made to the accounting policies in 2019/20 to accommodate this type of non-material fluctuation.

It was highlighted that there was a requirement to publish the Statement of Accounts for 2018/19 by the statutory deadline of 31 July 2019.  It was advised that further changes would still take place following the Committee to the Statement of Accounts, which would be agreed between the External Auditor and Senior Officers.  These would be primarily due to the amended pensions valuations previously referred to, but may include other changes requested by the auditors during the final stage of the audit.  It was suggested that any changes should be agreed in consultation with the Chairman and Vice-Chairman of the Committee.

The Committee was advised that proactive work was being carried out on a budget setting process for 2020/2021 onwards, for which the Council was anticipating a budget shortfall of circa £30m. 

RESOLVED

(1)  That the Audit Completion reports, as detailed at Appendix A to the report, and verbal updates of the External Auditor regarding its audit work on the draft Statement of Accounts, be noted.

(2)  That approval be given to the Letters of Representation, as detailed at Appendices B and B1, on behalf of the Council to enable the Audit Opinion to be issued following the report of the External Auditor. 

(3)  That the Statement of Accounts for 2018/19, as detailed at Appendix C, be approved subject to any amendments being made and agreed between the External Auditor and Senior Officers, in consultation with the Chairman and Vice-Chairman of the Audit Committee, to enable publication by the Statutory deadline of 31 July 2019.