Issue - meetings

The Committee had before it a report by Alex Stephen which introduced the external audit report ISA 260: for discussion and noting.

The report recommended:-

That the Committee

(a)          Note the content of the ISA 260: Audit report, as at appendix A; and

(b)          Note that the full external audit report will be presented to the Committee in September 2018.

Natalie Dyce (External Audit) advised that External Audit had issued an unqualified opinion of the accounts, with no audit recommendations. She explained that IJB financial reporting was in line with statutory requirements and no audit misstatements had been identified during the audit. Ms Dyce provided an overview of the materiality and risks to the IJB but noted there were no specific areas which required members’ attention. As such, an audit action plan had not been prepared and External Audit was satisfied that the one outstanding recommendation from 2016-17 had been actioned and closed off. She added that External Audit would present a further report to Committee on 11 September 2018 which would cover the wider scope areas outlined within Audit Scotland’s Code of Audit Practice and this would complete the 2017-18 annual audit process.

Thereafter there were questions and comments on (1) the definition of financial sustainability; (2) how to set out tolerance levels and evidence budget monitoring controls, particularly for variances to align with best practice; and (3) if External Audit could provide guidance on how the Board could effectively capture non-financial benefits achieved through transformation, as this had proven to be an area of challenge for the IJB.

The Committee resolved:-

(i)            to note the content of the ISA 260: Audit report, as at appendix A; and

(ii)          to note that the full external audit report would be presented to the Committee in September 2018.

The Committee had before it a report by the Chief Finance Officer which provided the results of the review undertaken by the Executive Team against financial governance requirements contained in the Chartered Institute of Public Finance and Accountancy (CIPFA)’s statement on the ‘Role of the Chief Financial Officer in Local Government (2016)’.

The report recommended:-

That the Committee note the content of the report and comment on the accompanying results of the Executive team review contained in Appendix 1.

Alex Stephen advised that the review had been based on a recommendation from the Board’s previous external auditor, to provide financial assurance to the Committee using the principles set out in the Role of Chief Finance Officers in Local Government guidance prepared by CIPFA. He then provided an oversight of significant changes made during the year and highlighted areas of future work.

Thereafter there were questions and comments on (1) the process for embedding financial consequences in person specifications and appraisals; (2) the financial challenges related to locality planning and where a manager from one partner managed another partner’s budget; and (3) members sought assurance that managers and budget holders had sufficient financial skills to carry out their roles effectively, Mr Stephen confirmed that he had no significant concerns in this regard as staff had received training and were generally knowledgeable and experienced.

The Committee resolved:-

(i)            to request that consideration be given to simply stating where principles do not apply to IJBs such as treasury management within principle 3; and

(ii)          otherwise note the content of the report and comment on the accompanying results of the Executive team review contained in Appendix 1.