Appendices I and II to-follow – appendices added 29 July 2019.

The Financial Services Manager introduced the report which sought the Audit Committee’s approval of the Council’s Annual Financial Report for 2018/19 and included the external auditor’s Audit Findings Report.

The Financial Services Manager explained that the Annual Accounts showed the Council finances in accordance with accounting regulations.  He drew Members’ attention to the significant items in the Expenditure and Funding Analysis; the Comprehensive Income and Expenditure Statement; the Movement in Reserves Statement; the Balance Sheet and the Cash Flow Statement. 

In response to a question from a Member, the Financial Services Manager explained that the cost of pensions shown in the accounts was based on an International Accounting Standard (IAS 19).  This used different assumptions from those used when calculating the actual cost of pensions to the Council which was based on a valuation made every three years by the Kent Pension Fund’s actuaries.

A Member asked why, on page 88, there had been two loans of £5 million each.  The Financial Services Manager explained that in January 2019 the Council had arranged two external loans of £5 million each, from other local authorities.  One loan was for 12 months at a rate of 1.1% and the other for 18 months at a rate of 1.2%.  The loans were required to maintain the Council’s cash balances.  The Member also asked for further information on the package of £369,100 for 14 staff.  The Financial Services Manager explained that this was the cost of the exit package, following a staff restructure, resulting in efficiency savings, with staff retiring or taking redundancy.

A Member asked for further information on the sale of vacant land at Minster Cliffs, as outlined on page 120 of the report.  The Member had considered the valuation to be low.  The Chief Financial Officer reported that Cabinet had decided to sell the land in 2018, and a price of £1 - £1.1 million had been agreed.  The Chief Financial Officer agreed to send the Cabinet report to the Member.

A Member asked if there was a particular issue with Council Tax evasion in Swale?  The Chief Financial Officer explained that an annual report on this matter was submitted to the Audit Committee each year.  Swale had bigger difficulties with this issue than some other local authorities such as Maidstone, but the recovery on business rates was high at over 90%.

Mr Trevor Greenlee (Grant Thornton) was invited to introduce the tabled report on the Audit Findings for the Year Ended 31 March 2019.  He apologised for the limited time Members had to read the report and explained the timescales that Grant Thornton worked to. 

Mr Greenlee referred to the sections on Headlines; Summary; and Significant findings – audit risks, key judgements and estimates; and Value for Money and drew Members’ attention to the key findings and other matters arising from their audit.

In response to questions, Mr Greenlee explained that he was not looking at individual decisions of the Council, but looking ahead, proper arrangements were in place to ensure the Council delivered Value for Money.

Mr Greenlee concluded by stating that he had no issues to raise and confirmed that Grant Thornton would be giving their unqualified opinion on the 2018/19 accounts, and Value for Money.  He thanked the Chief Financial Officer, the Financial Services Manager and the Finance Team.

Resolved:

(1)      That the external auditor’s Audit Findings Report (Appendix I) be noted.

(2)      That the Letter of Representation (Appendix II) be approved on behalf of the Council.

(3)      That the Annual Financial Report for the year ended 31 March 2019 including the Annual Governance Statement (Appendix III) be approved.

(4)      That the Audit Committee Chairman signs and dates the Annual Financial Report for the year ended 31 March 2019.