Audit & Risk Management Committee 28/9/2011 Part 4

Mike Thomas continued by saying there were a range of issues on pages 38 to 42 which relate to earlier years, which needed to be attended to. There was a recommendation on page 42. There were weaknesses in internal control. He asked the committee to check the quality of the financial statements as there were a significant number of amendments. Project management could be better and the Quality Review dealt with the Value for Money conclusions.

The appendices detailed the changes to the draft, included the unadjusted misstatement of £6 million. There was also a glossary and an Action Plan.

Tom Sault said there was an updated letter of representation with one amendment which was Appendix 6.

Cllr Green asked which one and said he had questions.

Mike Thomas said the appendix replaced page 36, which was drafted on 6th September. The addendum was answering the outstanding questions, the major one outstanding was issue 6.

Cllr Green referred to the qualified Value for Money conclusion. He asked about the £6 million and why it had not been project managed to completion. Which pages were changed he asked?

Mike Thomas said the update was to page 36. The other was to do with appendix 1 of the draft auditor’s report. On the 6th September it changed.

Cllr Green said it had got to be signed off and agreed by Friday and he had only been told on Monday.

Mike Thomas said they were still receiving information. The £6 million was complex and required unwinding to correctly analyse. The amendments wer late, they had worked with council officers to do this by the deadline but timescales had slipped.

Audit & Risk Management Committee 28/9/2011 Part 3

He said this had caused the issue of the deadline for approval not being met, there needed to be improvements to working papers and in non-current assets. However the impact had not changed the General Fund balance. The last stages would be there by Friday along with the £6 million change.

However the £6 million change could have an impact on many other figures. This wouldn’t lead to the accounts being qualified but was still an issue. He said there were Value for Money weaknesses in internal control. The opinion was unqualified except for certain items. Wirral Council had to prove value for money on the HESPE contract, there were governance issues at the Department for Adult Social Services, governance issues at the Technical Services Department and whistleblowing needed to be improved.

He confirmed that the son of someone on his audit team works for Wirral Council and that another team member had a relative who had dealings with Wirral Council with respect to buildings, planning and land.

He referred to page 35 and issues to consider and agree as well as page 36. The £6 million was still an issue. Item 2 referred to final adjustments. The amended statements would be agreed tomorrow. The Annual Governance Statement was to be considered by Internal Audit.

Paragraphs 3, 4 and 5 detailed the £6 million which had originally been £9.5 million. However out of the £15.975 million they had reanalysed £10 million. The Value for Money conclusion, letter of representation, opinion and Value for Money statement unless there were outstanding objections, they would need to review before the certificate and before they close things done. Changes had to be made before final approval.

Audit & Risk Management Committee 28/9/2011 Part 2

Tom Sault introduced the Statement of Accounts covering report and Appendix. He said the Merseyside Pension Fund was part of the Metropolitan Borough of Wirral’s accounts and this was a recommendation from the Pension Committee. There was the report to the District Auditor, Annual Governance Statement and letter of representation as well as the Action Plan. It had been signed off and there had been a briefing in July.

Unfortunately it had been published on the 4th July instead of the 30th June, which was behind the deadline. These would be formally published by the 30th September. They would get the auditor’s report in the next couple of days. There was an adjustment to one outstanding item, which was likely to happen by the end of the day. It was to do with a complex issue affecting £6 million of capital grants. This had no effect on the bottom line. There was an adjustment to two accounts, one being the technical services department with regards to how assets are treated under the International Financial Reporting Standards. This had no effect on the bottom line, but lessons had been learnt.

Cllr Crabtree asked Mike Thomas to respond.

Mike Thomas said the key messages had been issued in a supplement to page 36 and went on to talk about value for money, internal control weaknesses and key matters. He said it had been a challenging year in the public sector. He was still of the view that it was an unqualified opinion. He thought project management could be better and they needed to manage the process better.

Audit & Risk Management Committee 28/9/2011 Part 1

Cllr Jim Crabtree (Chair) said “Good evening” to start the meeting. He asked for any declarations of interest. No declarations of interest were declared. The minutes of the meeting held on the 30th June 2011 were received.

An officer introduced the Merseyside Pension Fund accounts and Appendix. He said they had been audited and the recommendation was to agree the accounts (and amendments) as well as the letter of representation. The accounts had been to Pension Committee on the 19th September, but this was a briefer version. He referred to the appendix and the changes made by the Audit Commission as well as changes due to International Financial Reporting Standards. The audit opinion was unqualified. There had been lessons learnt about reconciliation and investment accounting.

Cllr Crabtree said he would take agenda items 3, 4, 5 and 6 together as they were related.

Mike Thomas, introduced the Annual Governance Report into the Merseyside Pension Fund. He also referred to the Pension Committee meeting. He said it was an unqualified opinion, but there were outstanding matters which were detailed in the supplementary pages. It was an unqualified opinion but there were two material errors in presentation and classification.

He referred to page 12 and said there were no issues about independence. The recommendations in the report were subject to discussion about the amendments which were as a supplementary paper. All work was complete. The report sets out in detail changes which would need to be done by next year, and he alluded to the main one. He thanked the Merseyside Pension Fund team and pointed out the deadline was Friday.