Some good news and some bad news about the council’s audit

Accounting

The report on Reading Borough Council’s (RBC) accounts for the year ended 31 March 2017 presented to the audit and governance committee on 27 September had anticipated a completion date in late October or early November. That now seems to be slipping away.

There are further delays which mean that the audit of the following year’s accounts to 31 March 2018 can still not start, and audit costs continue to rise.

When asked by Councillor Jason Brock to comment on the end date, Ernst & Young associate partner Maria Grindley said she felt that the end date given in the report was now optimistic.

Audit & governance committee chairman David Stevens asked about audit costs which had been indicated as £300,000 above the standard fee of £108,938. Maria Grindley said it was still hard to say what the final fee would be.

The good news came from the internal auditor’s quarterly progress report. They were able to report that the sample tests on journal transactions in the accounts for the first quarter of 2018/19 (April to June) had been “… properly evidenced and supported by working papers.” Journals are used to make adjustments to financial records.

The picture is not as positive for last year, where issues were still expected for the first six months before a change was made to the system. RBC director of resources Jackie Yates said that she had asked internal audit to carry out some sample checks for the first half of the year.

The lack of evidence for journals was one of the reasons that internal audit were only able to provide a ‘limited assurance’ opinion in their 2016/17 and 2017/18 annual audit assurance reports.

The 2017/18 report presented on 1 August 2018 stated:

Whilst no assurance can ever be absolute, on the basis of work completed during the course of the year, the chief auditor has concluded that only limited assurance can be placed on the adequacy and effectiveness of the council’s internal control framework within those areas audited in 2017/18. Whilst the assurance level is the same as last year’s, it should be noted that the direction of travel is one of improvement.

Although the leader of the council Jo Lovelock and deputy leader of the council Tony Page are no longer members of this committee, both were present.

The next planned audit & governance committee is not until 24 January 2019; let us hope that it is a Happy New Year!


Links
  • Audit & Governance committee 27 September 2018 papers & webcast
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