The Annual Audit Letter for the Police and Crime Commissioner for Cheshire and the Chief Constable of Cheshire Police

Transcription

1 The Annual Audit Letter for the Police and Crime Commissioner for Cheshire and the Chief Constable of Cheshire Police Year ended 31 March 2015 October 2015 John Gregory Engagement Lead T E john.gregory@uk.gt.com Helen Stevenson Engagement Manager T E helen.l.stevenson@uk.gt.com Dave Catherall Executive T E dave.a.catherall@uk.gt.com 2015 Grant Thornton UK LLP Annual Audit Letter 2014/15

2 Contents Section Page 1. Key messages 3-5 Appendices A Summary of reports and audit fees 6 B How we have worked with you 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 the Police and Crime Commissioner (PCC) for Cheshire and the Chief Constable for Cheshire Constabulary 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. Our annual work programme, which includes nationally prescribed and locally determined work, has been undertaken in accordance with the Joint Audit Plan that we issued on 18 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 our findings arising from the audit of the financial statements in our Joint Audit Findings Report which was discussed with the PCC and the Chief Constable as 'Those Charged with Governance' on 7 September This was also reported to the Joint Audit and Ethics Committee on 23 September The key messages reported to the PCC and the Chief Constable were: The financial statements submitted for audit were yet again of good quality, delivered by an effective closedown process and supported by good quality working papers. Queries raised were responded to quickly. The PCC and Chief Constable updated the presentation for the intra group funding of 188,987k (from the PCC to the Chief Constable) within the comprehensive income and expenditure statements (CIESs). The PCC and Chief Constable had previously shown the funding within other operating expenditure but an amendment was made to include this within the net cost of services. This amendment is as a result of clarified national guidance to promote consistency of presentation across police bodies. One amendment was made by the PCC to show a VAT balance of 5,176k as a net figure, rather than including this within both debtor and creditor balances. These amendments had no overall impact on the Group's reported financial position. Management made amendments to rectify disclosure and misclassification issues identified during our audit. None of these were significant. We also drew to the PCC's and Chief Constable's attention to two control issues. We identified an incorrect calculation of a police officer lump sum and pension payment and also found an error in the calculation of a redundancy payment. We reported a lack of evidence to support the method used to calculate weekend enhancements within a termination payment. These areas were investigated by finance staff and improved procedures put in place Grant Thornton UK LLP Annual Audit Letter 2014/15 3

4 Key messages continued Financial statements audit (including audit opinion) contd We issued an unqualified opinion on the financial statements on 25 September 2015, in advance of 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 PCC's and Chief Constable's financial position and of the income and expenditure recorded. Value for Money (VfM) conclusion 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 Chief Constable put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March We issued an unqualified VfM conclusion for 2014/15 on 25 September The PCC and Chief Constable have effective arrangements in place which enabled them to deliver their savings programme for 2014/15. The PCC Group has general fund balances of 5.9 million and earmarked reserves of 23.1 million as at 31 March As part of the reserves strategy the PCC earmarked 14 million in a medium term financial strategy reserve to support future transition projects and required organisational change. In the context of the future financial challenges and uncertain future funding following proposed changes to Home Office grant, these reserves are important to support the PCC and Chief Constable to make the transformational changes which are needed. The PCC's approved MTFS covers the 5 year period to 2019/20 and currently anticipates an overall savings and efficiency requirement of 34 million over the MTFS period. Having already delivered substantial financial savings, the PCC is working with the Chief Constable to address the budget gap by transforming operational working arrangements. The Constabulary is restructuring and implementing a new policing model to establish 8 local policing units to replace the existing 19 neighbourhood units and 3 police areas. This is a result of a thorough root and branch review of activities to drive out efficiencies and create a modern and sustainable police force to meet future financial and operational challenges. Essential to the delivery of the ambition within the emerging policing model are the modernisation of the estate and IT, together with continued emphasis on collaboration. In reaching our value for money conclusion, we take into account the findings of Her Majesty's Inspectorate of constabulary (HMIC). Since the audit was concluded, HMRC have published their judgement for efficiency as part of the PEEL review process, and have judged Cheshire to be 'outstanding' Grant Thornton UK LLP Annual Audit Letter 2014/15 4

5 Key messages continued Value for Money (contd) Whilst the Constabulary has effective arrangements for prioritising its resources, looking at new service delivery arrangements and working co-operatively with partners, the continued improvement of these arrangements will be crucial to meeting the significant financial challenges in the future. Whole of Government Accounts Audit fee Cheshire PCC Group is below the threshold of 350m, and detailed work on WGA was not therefore required. Our fees for 2014/15 were 45,100 excluding VAT for the PCC and 20,000 for the Chief Constable, in line with our planned fees for the year. This includes work for the opinion and value for money conclusion and our reporting to those charged with governance. Additional work We have agreed to provide additional work to examine revised pensions control processes implemented during 2014/15. The fee for this work will be agreed once the detailed work has been scoped. During 2015/16 we are providing additional non audit work to review the commercial development progress and opportunities of the Multi-Force Shared Service (MFSS). The fee for this work is 23,942. and we have put in place appropriate safeguards to ensure that there is no threat to our independence as external auditors Grant Thornton UK LLP Annual Audit Letter 2014/15 5

6 Appendix A: Reports issued and fees We confirm below the fees charged for the audit and non-audit services. Fees for audit services Fees for other services PCC audit Chief Constable audit Per Audit plan 45,100 20,000 Actual fees 45,100 20,000 Service Fees Audit related services tba Pensions control processes Total audit fees 65,100 65,100 Non-audit related services MFSS 23,942 Reports issued Report Date issued Audit Plan 18 March 2015 Audit Findings Report 23 September 2015 Annual Audit Letter 23 October Grant Thornton UK LLP Annual Audit Letter 2014/15 6

7 Appendix B: How we have worked with you during the year Audit and Ethics Committee Members PCC, CC and Senior Management Teams We: We: Provided assurance on financial reporting and financial resilience by giving a timely audit opinion and value for money conclusion Shared our thinking on key issues, including offering members copies of our first national report, which evaluated how the sector is responding to the Police Reform and Social Responsibility Act 2011 (PRSRA), 'The future of policing accountability: Learning the lessons' Met regularly with the Audit and Ethics Committee to ensure you were kept up to date with the audit progress, as well as emerging issues affecting the wider Police Sector Provided independent external audit commentary and insight in your key issues trough senior attendance at every Audit and Ethics Committee. 1 2 Ensured a smooth external audit process through regular dialogue and meetings to promptly discuss financial accounts opinion audit Met with the Senior Officers, including periodic meetings with the PCC and the Chief Constable, to discuss your major challenges, share our insight into national sector issues and provide support where possible. Have been involved in early discussions on a number of developments to ensure that appropriate accounting and audit implications are identified Liaised with Internal Audit to minimise duplication hosted the Third National Conference for Police and Crime Panels The focus of the conference was on the future of policing accountability ahead of the general election in May 2015 are continuing to work closely with you in relation to the pensions control issues identified in earlier years. Provided regular, timely and transparent reports from our work and briefing notes on key sector developments Invited you to attend our seminars for police audit committee members Provided you with copies of our national report on audit committee effectiveness in the police sector 2015 Grant Thornton UK LLP Annual Audit Letter 2014/15 7

8 2015 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 2015 Grant Thornton UK LLP Annual Audit Letter 2014/15