KPMG (external auditors) advise councillors that report nearly finished on objection to Merseytravel’s 2014/15 accounts

KPMG (external auditors) advise councillors that report nearly finished on objection to Merseytravel’s 2014/15 accounts

KPMG (external auditors) advise councillors that report nearly finished on objection to Merseytravel’s 2014/15 accounts

                                                   

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Liverpool City Region Combined Authority Audit Committee 3rd November 2015

John Fogarty speaking at the Liverpool City Region Combined Authority Audit Committee 3rd November 2015 about risk management
John Fogarty speaking at the Liverpool City Region Combined Authority Audit Committee 3rd November 2015 about risk management

Risk management was a subject John Fogarty tried very hard to be interesting about by making topical references to Thomas Cook, TalkTalk and Volkswagen, however he was completely unaware that he was being upstaged by a couple in the background flirting while waiting for the lift (as pictured above).

That is the most interesting introduction I can make to a write-up of yesterday’s Audit Committee meeting. You can read the reports for the public meeting on Merseytravel’s website.

The one Wirral Council councillor on the Audit Committee (Cllr Mike Sullivan) wasn’t present and didn’t send his apologies. The other five councillors on the Committee were there (the Chair Cllr Anthony Carr (Sefton Council), Deputy Chair Cllr Nina Killen (Sefton Council), Cllr Andy Moorhead (Knowsley Council), Cllr Rob Polhill (Halton Borough Council) and Cllr Pam Thomas (Liverpool City Council)).

On the agenda were three main items a presentation by John Fogarty (Treasurer to the Liverpool City Region Combined Authority) on risk management, a quarterly update on internal audit work and the final item was a report from the Treasurer on the final accounts for 2014/15 (which had two appendices the draft report to those charged with governance from the external auditors KPMG and the Annual Audit Letter 2014/15.

Although one of those reports only mentions one formal objection (I referred to the objection I made here), there is still another formal objection to the accounts.

As Merseytravel and the Liverpool City Region Combined Authority are audited separately (although this Audit Committee covers both bodies), I would guess that this relates to the matter discussed at Merseytravel’s meeting on the 1st October 2015 and minuted in this way (Members means councillors)Finally the Director advised of an objection raised by a member of the public in relation to a historical item from the accounts relating to the internal transfer of funds between two Merseytravel services. The outcome of this matter could be reported to Members once resolved. Councillor Abbey asked that it be placed on record that such complaints did result in a cost to council taxpayers as they required investigation by external auditors.

The external auditors (KPMG) confirmed at yesterday’s meeting that they are in the process of writing a report on that matter and hope to report back soon, however did confirm that the matter the objection related to doesn’t pass the threshold of materiality.

Due to the unresolved objection, the accounts haven’t been closed by the statutory deadline of the 30th September 2015.

There is not much else interesting I could write about the Audit Committee meeting (although video of the meeting can be watched below).

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Liverpool City Region Combined Authority Audit Committee 3rd November 2015

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Why did 2 missing words from the Liverpool City Region Combined Authority 2014/15 accounts end up costing YOU £4,755?

Why did 2 missing words from the Liverpool City Region Combined Authority 2014/15 accounts end up costing YOU £4,755?

Why did 2 missing words from the Liverpool City Region Combined Authority 2014/15 accounts end up costing YOU £4,755?

                                                  

Councillor Phil Davies (Chair) at a meeting earlier this year of the Liverpool City Region Combined Authority

In the interests of openness and transparency here is an email I’ve just written. We’ll see what happens tomorrow morning. You can read the objection that led to the KPMG (the external auditors for the Liverpool City Region Combined Authority) increasing their bill by £4,755 here.


To
Councillor Anthony Carr (Chair) anthony.carr@councillors.sefton.gov.uk
Councillor Nina Killen (Deputy Chair) nina.killen@councillors.sefton.gov.uk
Councillor Andy Moorhead andy.moorhead@knowsley.gov.uk
Councillor Rob Polhill rob.polhill@halton.gov.uk
Councillor Mike Sullivan mikesullivan@wirral.gov.uk
Councillor Pam Thomas pamela.thomas@liverpool.gov.uk

Subject: Liverpool City Region Combined Authority Audit Committee meeting (3rd November 2015) item 6 LCRCA Final Accounts 2014/15

Dear all,

I have read the reports for tomorrow’s meeting and as you are the people on the Audit Committee there to represent the people of Merseyside I wish to make the following points to you.

If you wish me to explain at the public meeting itself why I made the objection I am happy to do so, but as you will understand in this email what I stated in the objection is the tip of a larger iceberg.

Firstly, the same error was also made in the Merseytravel accounts (I think since Merseytravel’s Audit and Governance Sub-Committee was disbanded you are also responsible for Merseytravel’s accounts too). I know someone else made an objection to the Merseytravel accounts (I didn’t), but had I made the same objection to the Merseytravel accounts too as this would’ve added an extra ~£5k to your audit costs.

As it’s never been made clear to me if the same error in Merseytravel’s accounts was also corrected, I would appreciate an answer to that point.

There are other points about the accounts that I did not raise in my objection, that you as the Audit Committee should be made aware of.

The accounts for 2014/15 and accompanying reports refer to the Accounts and Audit Regulations 2015. However the Accounts and Audit Regulations 2015 only apply to financial years from 2015/16 onwards, therefore this is another error.

Finally, I am concerned that the system of internal controls at the LCRCA, the external auditor or the councillors approving the accounts did not spot this or the matters relating to my objection.

I hope at the meeting tomorrow you will exercise some scrutiny as to what happened and why and put into place controls to prevent it happening in the future.

Yours sincerely,

John Brace

P.S. I will clarify what it stated on page 11 of the auditor’s report.

The accounts in their original form didn’t comply with legal requirements. It’s been acknowledged by the auditors and officers they were wrong. The point about the external auditors applying to the court for a declaration that the accounts are unlawful is therefore moot as they’ve been changed.

However it is important that councillors consider the reasons behind the objection in a public interest report, otherwise the people tasked with corporate governance will be in the dark as to what was wrong, why it had to be changed and be aware to check for this next year. I hope I have made this clear.

P.P.S On another audit related note, as the LCRCA now has a website, the Local Government (Transparency Requirements) (England) Regulations 2015 make it a legal requirement that certain information is published on its website (such as payments over £500 for example the payment to the auditors).

Currently this is being done on Merseytravel’s website, which makes it very hard to find the LCRCA payments amongst the Merseytravel ones. I would like the Audit Committee to please find out why this information isn’t published on the LCRCA website as it would aid with better openness and transparency about what the LCRCA is doing.

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EXCLUSIVE: Incredible £88,174 loss made by Merseytravel on sale of Liverpool pub (continued)

EXCLUSIVE: Incredible £88,174 loss made by Merseytravel on sale of Liverpool pub (continued)

EXCLUSIVE: Incredible £88,174 loss made by Merseytravel on sale of Liverpool pub (continued)

                        

Continues from EXCLUSIVE: Incredible £88,174 loss made by Merseytravel on sale of Liverpool pub.

Tony (Merseytravel officer): Also the plot in front of you doesn’t have any access to the highway and fronts the street. There’s very little space in that it’s actually quite a small plot of land.

Cllr Liam Robinson (Liverpool City Council, Labour): Tony?

Cllr Anthony Carr (Sefton Council, Labour): Thanks Tony too. Do you have any details of the acquisition of the land neighbouring the land and when the current owners took possession of that land about the date that they purchased that land for? Whether it was because it was a big piece of land…about it was eighteen months.. the land valuation office about the land valuation office so it gives you a better guide as to not what they wanted, but what they already paid for the land that they’ve already got?

Tony (Merseytravel officer): I’m sorry I don’t have those details but I’ll see what I can find out.

Cllr Liam Robinson (Liverpool City Council, Labour): Again Steve?

Cllr Steve Foulkes (Wirral Council, Labour): I suggest progress Chair that I think this, now that it’s a public document which I think it should be, the land valuation is out there and in you know the public arena. We’re unlikely then, to get any more than this for this piece of land but can we ask officers to consider the options that Members have raised when parcels of land like this as a general policy that we go to auction or we use that methodology to see if we can get the best return we can on any piece of land or any asset that we sell?

Cllr Liam Robinson (Liverpool City Council, Labour): Yeah absolutely and I think that it’s central to the way that we deal with any asset I would sell in making sure that now the District Auditor and the District Valuer at all times for any disposal or acquisition with us in getting that relevant necessary advice at all times. Mary?

Cllr Mary Rasmussen (Liverpool City Council, Labour): Just a kind of an afterthought really Chair. It would be interesting to know what pieces of land we do own and where they are so that we can be forewarned if you like we know nothing just jump out of the ground and be flogged off rather cheaply in the future? Just to make as all aware.

Cllr Liam Robinson (Liverpool City Council, Labour): And I think fundamentally all these things are captured in our asset register and it would be useful to actually have a workshop for all Members to take Members through everything that remains within the asset register and what its strategic long-term how its potential is. Ken?

Cllr Ken McGlashan (Knowsley Council, Labour): Thanks Chairman. We used to have a New Deal for Communities earlier in across my area in Huyton and when we demolished about eleven hundred houses the price of the land then was at the maximum. Now we’re lucky to get a third of that price for that land and what we’re looking to do now is hold onto the land so we’ve got a development project. We already have developments there.

When they’ve finished one plot, hopefully that will sort of drive up the price of the next plot up. So the price of land at the moment is at an all time low and about ..%. The price has been advertised so nobody is going to pay more than the advertised price.

Cllr Liam Robinson (Liverpool City Council, Labour): Gordon?

Cllr Gordon Friel (Sefton Council, Labour): Just really a technical point on how we put this in the public domain. If we decided that we really wanted to seek an auction price for this meeting, we’d have declared our hand by it being a public document. Would we compromise ourselves? So I just wonder … that the information was regarding this, the mark down, but are we best advised putting this in the public arena with this being sold in anyway? Thank you very much Chair.

Cllr Liam Robinson (Liverpool City Council, Labour): Ok, if there’s no further contributions, if I can move the recommendation in paragraph seven of the report?

Councillors: Agreed.

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