Agenda item

The Committee had before it a report by Audit Scotland, External Auditors which presented their draft annual external audit report and summarised their audit opinions and conclusions on significant issues arising from the audit of the Council’s and the registered charities where the Council were the sole trustees 2022/23 annual accounts.

In response to a question relating to the pension assets and how those would be shown in the balance sheet and in future years, Mr Oliphant, External Auditor, advised that this was the first time that pension assets were included in accounts rather than liabilities and that these were based on the figures reported by the Council actuary.  He stated that the figures presented in the accounts for future years would depend on the valuation of the assets at the time taking into account that where the value of the minimum funding requirement contribution exceeded the future service cost, the asset should not be recognised.

In response to a question relating to the re-evaluation of the Spots Village and how that impacted the balance sheet, the Chief Officer - Finance advised that there was a rise in the value of the Council owned shares in the Sports Village which had increased the useable reserves.  He stated that the funds were not additional cash sums but were grant funds to be used for specific purposes, that were not yet spent in the annual accounts for 2022-23.

In response to a question relating to the materiality levels and how those figures were arrived at, Ms MacDonald, External Auditor, advised that (1) for the overall materiality, some aspects of audit work were based on professional judgement and that the 1.5% had been set based on intelligence gathered from the previous external auditor and known factors such as the control and environment in place; (2) for the performance materiality, the figure set is used as a guide to inform the auditor of any additional work that may be required if that target was to be reached or there was a cause for concern; and (3) for the reporting threshold, as auditors there is a requirement to report anything to those charged with governance on all unadjusted misstatements that were more than the threshold amount of £250,000.

In response to a question relating to the 5 recommendations contained in the action plan and the reporting mechanisms for those, Ms MacDonald, External Auditor advised that the recommendations would be included in the planning for the audit of the 2023/24 accounts and that a report would be submitted to this Committee providing a progress update on those recommendations in Spring 2024.  The Chief Officer – Finance advised that the Council’s Risk Board would be monitoring the recommendations to ensure that they were being completed.

The Committee resolved:-

(i)       to note the content of the report;

(ii)      to note that in relation to the action plan, that a progress report would be submitted to this Committee in early 2024; and

(iii)      to thank the External Auditors and Council employees for their work on the annual accounts.