Agenda item

The Committee received a cover report and accompanying audit planning report from BDO, which summarised the planned audit strategy for the year ending 31 March 2019. The audit planning report was introduced by Lee Lloyd Thomas from BDO as set out in the agenda pack at pages 27-62. The following was noted in discussion of the report:

a.    The Committee sought assurances about the audit of social care accruals, in response BDO advised that accruals were fundamentally sound but that the issue related to delays in providing care packages and the impact this had on accounting those accruals.  

b.    The Committee expressed concern with delays to care packages and questioned whether this was causing misery to service users. Officers advised that they had spoken to the Commissioning Service and that they had received categorical confirmation that there had been no impact on service users from the social care accruals. The Committee expressed further concerns about the service’s ability to monitor which services people received if there was a gap in payment and the impact that could have on delays. The Committee also sought clarification on whether there were similar issues with Children’s Services.

c.    BDO set out that Adults Service had around 3.5k service users who all had different service needs, which amounted to thousands of transactions at any one time. Part of the issue with accruals was that it was impossible to audit this accurately by running one report at year-end. A number of cases were still ongoing at year-end and there were also cases of double counting and some cases being incorrectly allocated.

d.    The Committee raised concerns about contract monitoring and queried how the Council could be sure that it was being charged the correct amount by social care providers for each service user.

e.    The Committee requested that officers from the Commissioning service attend a subsequent meeting of the Committee and provide a detailed update on this issue. The Committee requested that they be able to demonstrate that delays to the social care accruals did not have any effect on the quality and delivery of that service. (Action: Clerk).

f.     In response to a question around materiality, BDO advised that they assessed whether misstatements were material and that the threshold was above 1.5% of gross spending. This equated to £16.4m. BDO advised that they would come back in July with the final audit report for the Committee’s sign-off. (Action: Lee Lloyd-Thomas).

g.    The Committee sought reassurance about the potential impact on the accounts from high redundancy payments. In response, BDO advised that this was a risk if a high number of redundancies were undertaken but that the Council was nowhere near the level required for this to be considered a material consideration.

h.    The Committee sought clarification around whether the introduction of IFRS9 would undermine the Council’s ability to develop a Wholly-Owned Company to build social housing. In response, BDO advised that this would be an issue if it was debt funded but not if it was equity funded.

i.      In response to concerns around the governance of redundancy payments and how these were calculated, officers advised that there was a specific policy in place as there was with pension calculations. The Committee enquired whether negotiated redundancy settlements and pay-outs including discretionary payments, were subject to appropriate oversight. Officers advised that the pension fund had its own independent auditor. 

j.      The Panel sought year on year figures for redundancy settlements in the last five years to assure itself that proper process was being followed. In response, the Chair agreed to consider how best to accommodate this request in conjunction with the Chair of Pensions Committee and Overview and Scrutiny Committee. (Action: Cllr Diakides).

RESOLVED

     I.        That the Committee noted the report