Agenda item - External Audit Annual Audit Letter 2017/18

Report of Ernst & Young

28.1  RESOLVED: That the Committee noted the Annual Audit Letter

2017/ 18.

28. 1   The Committee considered a report of Ernst & Young that summarised the findings of the 2017/18 audit and included key messages arising from the audit of the financial statements and the results of work undertaken to assess the council's arrangements to secure value for money on its use of resources.  The Executive Director of Finance & Resources presented this report in the absence of representatives from Ernst & Young. The Officer confirmed that all queries had already been fully answered and that now they could close down the audit since they had a clean audit opinion secured.

28.2    Councillor Sykes queried the Pension deficit stated on page 62 points 2.4 – 2.7 and asked if in spite of the Council’s increasing contribution every year, this increase was now slowing down. The Executive Director of Finance & Resources confirmed that the rate of increase was by 0.5% per year and was  budgeted for. The contributions were effectively dictated by actuarial valuation, and even if the Fund was seeing positive investment returns, the number of pensions and their longevity was likely to increase at least as fast as the contributions.

28.3    The Chair queried the high spend on Council tax and Housing Benefits stated on page 66 and asked if this was due to protecting vulnerable tenants or increased administration costs.  The Executive Director of Finance & Resources stated that this was due to the high relative cost of rents and housing in the City, and that many housing benefit claims were paid at or close to the cap.

28.4    The Chair asked about the level of reserves which had increased   during 2017/18, as stated on page 66. The Executive Director of          Finance & Resources stated it this was a complex area and it             was easy to overstate how reserves could be used (as            misconstrued by local media) and that the Council only held £9 million       as its General Fund risk buffer.

28.5    The Executive Director confirmed as an action that he would circulate further information on Reserves to the Committee.

28.6    RESOLVED: That the Committee noted the Annual Audit Letter

2017/ 18.