Appendices I and II to-follow.

Appendix II published 23.11.20.

Appendix I published 23.11.20.

The Chairman advised Members that there had been a delay in presenting two of the appendices to Members which was due to the impact of the Covid-19 pandemic and its impact on working practices.

The Financial Services Manager introduced the report which sought the Audit Committee’s approval of the Council’s Annual Financial Report for 2019/20 and included the external auditor’s Audit Findings Report for consideration.

The Financial Services Manager referred Members to Appendix III, Annual Financial Report for the year ended 31 March 2020.  He 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.

Mr Darren Wells (Grant Thornton), introduced Appendix I, their audit findings for Swale Borough Council (SBC).  Mr Wells spoke about the impact of the Covid-19 pandemic which had affected the normal working arrangements of the Council and the additional responsibilities the Council had been required to take.  Mr Wells reported that it was their opinion that the Council’s financial statements provided by the Council were of a high standard.  He thanked the Council’s finance team for their excellent cooperation and also on being able to complete the financial statements prior to the 30 November 2020 deadline.

Mr Wells drew attention to page 4 of the report, which highlighted some issues in respect of the Council’s property, plant and equipment (PPE) and investment properties.  He explained that the issues raised did not affect the audit opinion.  Mr Wells reported that the Covid-19 pandemic would impact on the Council’s income levels, as it would all local authorities in the country, however they considered that the Council did have appropriate measures in place to cover this and they had no concerns in that respect.

A Member asked how SBC compared to other local authorities in terms of their financial arrangements.  Mr Wells reported that 30% to 40% of local authorities would not be able to finalise their accounts before the 30 November 2020 deadline, so SBC were in a strong position.

In response to questions from a Member, Mr Wells reported that the impairment allowance for debtors had not been adjusted to take account of the pandemic and he drew attention to the Action Plan on page 27 of the report and the recommendation in respect of debtors.  The Financial Services Manager drew attention to the financial management reports to Cabinet  which included the impact of the Covid-19 pandemic on debtors, and said that they would continue to monitor the situation. 

A Member asked if the external auditors had any concerns about the future finances of the Council?  Mr Wells explained that with regard to PPE, they were not suggesting an error or problem with regard to the valuations, but it was difficult for professionals to give accurate valuations given the uncertain times but that applied to all local authorities not just SBC.

Resolved:

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

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

(3)  That the Annual Financial Report for the year ended 31 March 2020 including the Annual Governance Statement (Appendix III) including the adjustments set-out in the Audit Findings Report be approved.

(4)  That the Chairman of Audit Committee signs and dates the Annual Financial Report for the year ended 31 March 2020.