The Annual Audit Letter for Wigan Metropolitan Borough Council

Transcription

1 The Annual Audit Letter for Wigan Metropolitan Borough Council Year ended 31 March October Grant Thornton UK LLP Annual Audit Letter 2014/15

2 Contents Section Page 1. Key messages 3-5 Appendices A Key issues and recommendations 6 B Summary of reports and audit fees Grant Thornton UK LLP Annual Audit Letter 2014/15 2

3 Key messages Our Annual Audit Letter summarises the key findings arising from the work that we have carried out at Wigan Metropolitan Borough Council ('the Council') for the year ended 31 March The Letter is intended to communicate key messages to the Council and external stakeholders, including members of the public. Our annual work programme, which includes nationally prescribed and locally determined work, has been undertaken in accordance with the Audit Plan that we issued in March 2015 and was conducted in accordance with the Audit Commission's Code of Audit Practice, International Standards on Auditing (UK and Ireland) and other guidance issued by the Audit Commission and Public Sector Audit Appointments Limited. Financial statements audit (including audit opinion) We reported the findings arising from the audit of the financial statements in our Audit Findings Report on 6 August 2015 to the Audit & Governance Committee. The key messages reported were: No significant issues were identified and there were no adjustments affecting the Council's reported financial position. Management agreed to make minor amendments to improve the overall presentation of the accounts. The accounts were prepared to a high standard, with good supporting working papers available at the start of the audit. Any requests for additional information were responded to in a timely manner. We issued an unqualified opinion on the Council's 2014/15 financial statements on 7 September 2015, meeting the deadline set by the Department for Communities and Local Government. Our opinion confirms that the financial statements give a true and fair view of the Council's financial position and of the income and expenditure recorded by the Council. We identified control weaknesses relating to the accurate processing of housing benefits and minor weaknesses in respect of the information flows underpinning the cash receipt reconciliation process. We recommended the Council undertake a detailed review of the effectiveness of the controls in place. A key issue for the preparation of the 2015/16 financial statements relates to the change in accounting treatment for highways network assets. It is expected that with effect from 2016/17, highways network assets will be valued based on depreciated replacement cost rather than depreciated historic cost. This will require re-statement of balances as at 1 April 2015, and will result in a highly material increase in the value of Council's assets ( nationally and collectively the estimate is an increase between 200bn bn.). CIPFA have expressed general concerns around the readiness of Councils and are assessing the state of preparedness. We are aware that your Council is well on with its preparations and we will work closely with Council officers to assess and support them for this significant change Grant Thornton UK LLP Annual Audit Letter 2014/15 3

4 Key messages continued Financial statements audit (continued) The deadline for the Council to publish the statement of audited accounts is being brought forward in future years from 30 September to 31 July. This is being introduced with effect from the 2017/18 accounts, which will be required to be published by 31 July The Council is well prepared for this change having completed the audited accounts by 6 August We will continue to work closely with the Council to ensure the closure of accounts and subsequent audits are completed within the revised timescales. Value for Money (VfM) conclusion We issued an unqualified VfM conclusion for 2014/15 on 6 August The Council continues to demonstrate good financial performance management despite the significant financial and demographic pressures, in particular surrounding adult social care. The Council has good financial planning and review processes in place, and a track record of delivering financial plans and savings and adequate levels of reserves. In 2014/15 the Council achieved a surplus of 0.495m on the General Fund. This was a significant achievement as the Council also managed to deliver in year savings of 14m. The funding for the Council is set to reduce by 12m in 2015/16 and it is estimated that the need to find future savings will increase. The Council has experienced growth in its council tax base but empty commercial properties and longstanding rateable value appeals add pressure to business rates collection income. Council Tax and Business Rates in-year collection remains high and are comparable with other Councils nationally, in-year collection of Council Tax was 95% and 97.1% for Business Rates. Economic growth and regeneration is a key priority for the Council however this continues to be a challenge. The Council continues working with a range of partners to develop the services local people need, e.g. its effective partnership with its healthcare partners to develop the Wigan Better Care Fund Plan as part of the Integrated Care Programme for Older People. The Council has a good understanding of its costs and this enables it to make informed decisions based on accurate information. Regular budget monitoring also ensures that the latest available information can be used to assess delivery against savings targets and identify risks and any mitigating actions required. The Council are reviewing it arrangements for publishing key performance indicators which is something we support Grant Thornton UK LLP Annual Audit Letter 2014/15 4

5 Key messages continued Value for Money (VfM) conclusion (continued) The Council's plans are challenging and are being developed alongside plans for greater devolution for the Greater Manchester Region, which will make possible new ways of working and further integration of services whilst receiving increased responsibility from central government. On the basis of our work, and having regard to the guidance on the specified criteria published by the Audit Commission, we are satisfied that in all significant respects the Council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March The NAO has recently consulted on the approach to be adopted for the value for money conclusion for the 2015/16 audit. The outcome of the consultation is yet to be published. We will be working closely with officers to implement the changes and will summarise the changes in approach in our Audit Plan to be issued early in Whole of Government Accounts We reviewed the consolidation pack which the Council prepared to support the production of Whole of Government Accounts. We reported that the Council's pack was consistent with the audited financial statements, with the exception of three minor inconsistencies that were primarily linked with the functionality of the WGA electronic toolkit. Certification of housing benefit grant claim Our work on the Council's 2014/15 housing benefit grant claim is in progress. We have reported to management that this continues to be an area for future development, in that claims need to be processed accurately and the conditions of the claim need to be met. Audit fee Our fee for the 2014/15 audit excluding grant certification work was 178,906 excluding VAT which was in line with our planned fee for the year. Further detail is included within appendix B. Our grant certification work is still in progress and our fees will be finalised on completion Grant Thornton UK LLP Annual Audit Letter 2014/15 5

6 Appendix A: Key issues and recommendations This appendix summarised the significant recommendations identified during the 2014/15 audit. No. Recommendation Priority Management response/ responsible office/ due date 1 Management to review the arrangements in place to improve the accuracy of benefits processing. 2. Management to review the cash accounting system in order to clear old balances. 3. Review Councils preparedness for earlier closedown and accounting for infrastructure assets. Medium Medium Medium The Council are continuing to work to improve the accuracy of benefits processing arrangements. The Council are currently preparing their response to the review. The Council have arrangements in place for making the required changes Grant Thornton UK LLP Annual Audit Letter 2014/15 6

7 Appendix B: Reports issued and fees We confirm below the fees charged for the audit and non-audit services. Fees for audit services Per Audit plan Actual fees Council audit 178, ,906 Grant certification fee 29,700 *41,060 Fees for other services Service Fees Audit related services Teachers' Pensions Return 4,200 Total audit fees 208, ,966 * - estimate as work in progress Reports issued Report Date issued Audit Plan March 2015 Audit Findings Report August 2015 Certification Report Audit and Governance Committee updates audit progress report and emerging issues and developments. To follow January 2015 March 2015 July 2015 Annual Audit Letter October Grant Thornton UK LLP Annual Audit Letter 2014/15 7

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