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Consideration has been given to
Mazars Audit Completion Report 2021/22, including the
Council’s arrangements for securing economy, efficiency and
effectiveness.
The key messages are
follows:
·
Audit opinion – At the time of issuing the
report, and subject to satisfactory conclusion of the remaining
audit work, Mazars anticipate issuing an unqualified opinion,
without modification, on the financial statements. However, this is
subject to conclusion of matters in relation to
infrastructure.
·
Identified misstatements – The auditor’s
work identified a number of misstatements that have been discussed
with management. Further work is ongoing in relation to the audit
of revised actuarial disclosures, and the accounting treatment
following the decision to bring The Gateshead Housing Company
(TGHC) back within the Council.
·
Value for Money – At the time of issuing the
report, Mazars anticipate having no significant weaknesses in
arrangements to report in relation to the arrangements that the
Council has in place to secure economy, efficiency and
effectiveness in the use of resources.
·
Whole of Government Accounts (WGA) – The
timetable for the Council’s submission for 2021/22 has not
yet been published. Audit work will commence once such instructions
have been received.
·
Wider powers – The Local Audit and
Accountability Act 2014 requires the auditor to give an elector, or
any other representative of the elector, the opportunity to
question them about the accounting record of the Council and to
consider any objection to the accounts. No questions or objections
have been received.
The report also includes a
draft Letter of Representation to Mazars to be approved by the
Committee prior to being signed by the Strategic Director,
Resources and Digital, following the issue of the audit
opinion.
The Cabinet agreed to the
integration of the management and maintenance of the
Council’s housing stock back into the Council with effect
from 1 April 2021. This resulted in the cessation of TGHC and its
governance arrangements. The Council’s draft Statement of
Accounts submitted for audit on 29 July 2022 accounted for this
using the principles of ‘merger’ accounting. Mazars
challenged this approach on the basis that TGHC was technically a
public sector body, therefore, a different form of accounting would
apply, namely ‘absorption’ accounting. The draft
accounts prepared for committee are still being presented under
merger accounting principles and the work to re-cast the statement
under absorption accounting principles is currently ongoing. It is
important to highlight that this change in accounting is
presentational in terms of the prior and current year and does not
change the net position as at 31 March 2022.
The Statement of Accounts is
materially consistent with the 2021/22 revenue and capital outturn
reports considered by Cabinet on 21 June 2022. Along with minor
adjustments and presentational changes, significant findings and
misstatements to the Statement submitted to audit on 29 July 2022
have been identified through the audit process. These are outlined
in Mazars Audit Completion Report.
None of the changes to the
Statement of Accounts impact on the revenue and capital outturn
positions reported to Cabinet, nor do ...
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