The Annual Audit Letter for the Police and Crime Commissioner for Greater Manchester and the Chief Constable for Greater Manchester

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1 The Annual Audit Letter for the Police and Crime Commissioner for Greater Manchester and the Chief Constable for Greater Manchester Year ended 31 March 2014 October 2014 Mick Waite Director/Engagement Lead T E mick.j.waite@uk.gt.com Helen Stevenson Manager T E helen.l.stevenson@uk.gt.com 2014 Grant Thornton UK LLP Annual Audit Letter Date

2 Contents Section Page 1. Key messages 3 Appendices A Summary of reports and audit fees 2014 Grant Thornton UK LLP Annual Audit Letter Date 2

3 Key messages Purpose of this letter Our Annual Audit Letter summarises the key findings arising from the work that we have carried out for the Police and Crime Commissioner ("PCC") for Greater Manchester and the Chief Constable for Greater Manchester Police ("Chief Constable") for the year ended 31 March The Letter is intended to communicate key messages to the PCC, Chief Constable and external stakeholders, including members of the public Responsibilities of the external auditors, the PCC and the Chief Constable This Letter has been prepared in the context of the Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission ( The PCC and Chief Constable are each responsible for preparing and publishing their own accounts, with each set of accounts accompanied by a separate Annual Governance Statement. They are also each responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in their use of resources (Value for Money) in their respective organisations. Our annual work programme for each body, which includes nationally prescribed and locally determined work, has been undertaken in accordance with the joint Audit Plan that we issued on 20 March 2014 and was conducted in accordance with the Audit Commission's Code of Audit Practice ('the Code'), International Standards on Auditing (UK and Ireland) and other guidance issued by the Audit Commission Grant Thornton UK LLP Annual Audit Letter Date 3

4 Key messages Audit Conclusions Financial statements audit (including audit opinion) We reported our findings arising from the audit of the financial statements in our joint Audit Findings Report on 24 September to the Audit and Accounts Committee. We also discussed our final findings with the PCC and Chief Constable. The key final messages reported were: we received draft financial statements and accompanying working papers at the start of our audit, in accordance with the agreed timetable we did not identify any adjustments in the financial statements that had an effect on the Group's reported financial position the PCC updated the presentation of the accounts to reflect the accountancy profession's views on the content of the Group, the PCC, and the Chief Constable's accounts. the PCC made adjustments in the balance sheet and consolidated income and expenditure statement (CIES) to correctly reflect the outstanding liabilities in relation to PFI commitments. The result increased the PCC's PFI liability by 12.4m with a consequent adjustment to unusable reserves. The adjustments did not result in any net impact on useable reserves officers also made some changes to improve the presentation of the financial statements as a result of the audit We issued unqualified opinions on the PCC's and Chief Constable's 2013/14 financial statements on 30 September 2014, meeting the national deadline. Our opinions confirm that the financial statements for each organisation give a true and fair view of the PCC and Chief Constable's financial positions and of the income and expenditure recorded by the PCC and Chief Constable, respectively. Value for Money (VfM) conclusion We issued unqualified VfM conclusions for the PCC and Chief Constable for 2013/14 on 30 September 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 PCC and the Chief Constable have each put in place proper arrangements to secure economy, efficiency and effectiveness in their use of resources for the year ending 31 March Grant Thornton UK LLP Annual Audit Letter Date 4

5 Key messages Audit Conclusions Value for Money (VfM) conclusion (cont.) Whole of Government Accounts The PCC has arrangements in place to secure financial resilience, and these include good financial planning and management. But the scale of the financial challenge remains significant. The strategic financial outlook for the 4 year period to 2017/18 sets out key planning assumptions, and highlights potential cumulative savings requirements of 13.6m, 55.7m, 100.6m, and 136.8m for the successive years from 2014/15 to the end of 2017/18. The 2013/14 savings requirement of 12.5 m brought the total for savings already achieved across Greater Manchester Police from the start of the spending review period in 2011/12 to over 100m. Continuous successive savings requirements of this magnitude are unprecedented in policing, and it underlines the scale of the challenge ahead to 2017/18. Achieving these savings will require a real focus on transformation, and goes beyond traditional efficiency improvements. In 2013/14 the CC has maintained a focus on improving operational performance at the same time as making further significant efficiency savings. Operational performance however remains challenging as overall crime levels are higher than other forces. The Force continues to show a strong response in tackling crime. HMIC recently reported that over the 3 year period to 2013/14 the force has reduced crime at a greater rate than the figure for the rest of England and Wales. The force faces a continuing challenge to maximise visible frontline policing whilst reducing overall officer numbers. The Constabulary has been successful delivering significant savings in recent years at the same time as working to change the organisational culture of the workforce and embed more flexible working. The strength of plans to secure its financial position for the longer term is recognised in the outstanding rating received on this in the July 2014 HMIC report, 'Policing in austerity'. The nature of policing is also changing, with police workload increasingly concerned with the protection of vulnerable people, including those with mental health problems. Public expectations are continually rising at a time of reducing resources. Responding successfully will rely on more and better sharing of information between partners, and closer integrated working. We reviewed the consolidation pack which the PCC and Chief Constable prepared to support the production of Whole of Government Accounts. We reported that the pack prepared was consistent with the audited financial statements Grant Thornton UK LLP Annual Audit Letter Date 5

6 Appendix B: Reports issued and fees We confirm below the fee charged for both audits and confirm there were no fees for the provision of non audit services. Fees Per Audit plan Actual fees Audit Fee PCC 61,140 61,140 Audit Fee Chief Constable 30,000 30,000 Total fees 91,140 91,140 Fees for other services Service Fees None Nil Reports issued Report Date issued Joint Audit Plan March 2014 Joint Audit Findings Report September 2014 Joint Annual Audit Letter October Grant Thornton UK LLP Annual Audit Letter Date 6

7 2014 Grant Thornton UK LLP. All rights reserved. 'Grant Thornton' means Grant Thornton UK LLP, a limited liability partnership. Grant Thornton is a member firm of Grant Thornton International Ltd (Grant Thornton International). References to 'Grant Thornton' are to the brand under which the Grant Thornton member firms operate and refer to one or more member firms, as the context requires. Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by member firms, which are not responsible for the services or activities of one another. Grant Thornton International does not provide services to clients. grant-thornton.co.uk 2014 Grant Thornton UK LLP Annual Audit Letter Date