Agenda item

The Committee a report which provided an update on the Statement of Accounts for 2018/19, as well as the external auditors final audit completion report. The report was introduced by Thomas Skeen and the final audit completion report was introduced by Lee Lloyd-Thomas, Engagement Partner at BDO, as set out in the agenda pack at pages 33 and 41 respectively. The following was noted in discussion of the report:

a.    Officers advised that Haringey was not the only authority to have submitted their final statement of accounts late. The Committee was advised that 42% of local authorities had not submitted their accounts by July 31^st deadline and 14-20 London local authorities had not published their accounts by 31^st July. Officers advised that, as of the date of the meeting, there were 9 London local authorities that had still not published their final statement of accounts for 2018/19.

b.    BDO advised that there were two main misstatements that had been corrected. These related to an increase in school valuations arising from updated land and buildings data, which required correcting an error from previous years. As well as an error of £24.6m in the group accounts due to double counting of the cost of refurbishment works to Alexandra Palace. These, along with other corrected misstatements, increased the deficit on the provision of services by £12.7m in the amended financial statements. This was well within the Council’s agreed level of materiality of £15.8M.

c.    There were also further unadjusted audit items identified of £4.916m for the Group and £4.115M for the Council but these items were not posted as per statutory guidance, as they did not impact the Council’s General Fund or HRA balances.

d.    The auditors advised the Committee that, overall, they were satisfied that the accounts represented a true and fair reflection of the Council’s financial position.

e.    The Committee questioned whether the decisions to cut the audit fees by 40% was a false economy. In response, officers agreed that this seemed to be the case, given the additional staff resources invested. The Committee were advised that the fees were set centrally and that the Council had no discretion in this. BDO commented that from an auditors perspective the two month turnaround time for auditing all local authorities was unsustainable.

f.     The Committee sought assurances around the discrepancies in the valuation of land and the actions undertaken since this was identified in the previous audit of the accounts for 2017/18. In response, BDO advised that there had been an undervaluation by nearly £200m and that each school had been subject to a re-evaluation process since the previous audit. BDO reassured the Committee that a lot of work had been undertaken to tidy up the asset register and that Haringey’s asset register was now as clean as BDO had seen it.

g.    The Chair sought assurances around whether there were any other areas of concern in relation to land and building valuations that the Committee needed to be aware of. In response, BDO advised that Haringey was probably ahead of most local authorities in this respect and that actions such as categorising housing stock by architypes etcetera was a good accounting model.

RESOLVED

       I.        That the Committee considered the contents of the report and any further oral updates given at the meeting by Council officers or the external auditor BDO.

     II.        That the Committee noted the contents of the external auditor’s final audit completion report at Appendix 1 of the report, including the management responses the recommended actions.