Agenda and minutes

To receive any apologies for absence

There were no apologies received on this occasion.

To note any changes to the membership of the Committee

There were no changes to the membership made on this occasion.

There were no disclosures of interest made on this occasion.

There were no items on the agenda which required the exclusion of press and public.

To confirm as a correct record the minutes of the meeting of the Committee held on 14 September 2021 (copy enclosed).

RESOLVED that,     the minutes of the previous meeting held on 14 September 2021 be agreed as an accurate and complete record.

It was AGREED that officers of the Council be asked to consider in their horizon scanning the modelling carried out by University College London in relation to the risk posed to areas of west Cumbria by a potential tsunami caused by volcanic eruptions on the island of La Palma.

To consider a report from the Director of Finance (s151 Officer).

The Director of Finance (s151 Officer) provided a general overview before asking members to consider the County Council, Local Government Pension Scheme (LGPS) and Port of Workington accounts.

In terms of background, the Director of Finance (s151 Officer) explained that as those charged with governance the Audit and Assurance Committee are asked to receive the annual accounts, consider the external auditor’s report relating to those accounts and consider and agree the action plan relating to management’s response to the auditors findings.

Members of the Committee had received a presentation and briefing session from the Finance team on the afternoon of Thursday 23 September 2021 where discussion took place regarding the process by which the Accounts had been prepared and audited and the approach to providing assurance in relation to completeness and thoroughness of the accounts. Members also considered the approach of the auditor in undertaking their audit of the Accounts and the progress of the audit and their findings as a part of their training.

Another discussion that was central to the briefing session was in relation to the headlines of the Accounts – for example the Finance Team provided a detailed explanation of how pensions liabilities were calculated for accounting purposes at year end.

The Director of Finance (s151 Officer) thanked those members who attended the training for their input as well as the Finance team in producing a robust and accurate set of accounts. Members noted the added complexity that the significant number of individual COVID grants had brought to both the in-year budget monitoring and the final accounts position.

The Senior Manager – Accountancy (Deputy s151 Officer) provided an overview of the Audited accounts and highlighted that the Audit Findings Report for the Council concluded that again the Accounts have been produced to a very high standard and the finance team have produced good working papers and have been responsive to  audit queries. Grant Thornton positively commented on the effective response time to their audit queries. The Senior Manager Accountancy (Deputy s151 Officer) explained that the very small number and the nature of the adjustments reflect the continuing and sustained improvement and substantial progress the Council has made in strengthening the accounts process over recent years.

The Unaudited Accounts for the County Council and the Cumbria LGPS were published on 1^st July 2021 in line with the Accounts and Audit (Amendment) Regulations 2021.The unaudited accounts were amended following the change in Cumbria LGPS asset values in August 2021. This gave rise to a decrease in the Council’s net pension liabilities of £11.499m which had now been amended in the primary statements. In addition, there were some changes required to disclosure notes to aid the reader’s understanding.

Overall, the Council, as at 31 March 2021 still had a negative Balance Sheet position with Total Net Liabilities of £102.303m, which is an increase in the liabilities of £68.255m from 31 March 2020. Members were reminded that the Council has had a negative Balance Sheet position as at  ...  view the full minutes text for item 162.

The Committee considered the Letter of Representation to the Engagement Lead at Grant Thornton in connection with the audit of the financial statements of Cumbria County Council and its subsidiary undertakings for the year ended 31 March 2021.The Letter of Representation sought to provide the external auditor with the assurance that their audit had been based upon the complete financial picture of the Council, up to the date of the signing of the accounts, and that the accounts were in full compliance  with statutory requirements.

The Director of Finance (s151 Officer) asked that members consider the contents of the Letter of Representation and approve the signing of the letter by the Director of Finance (s151 Officer) and Chief Executive.

Approval of this item is recoded at Minute 162.

The Committee considered the Letter of Representation to the Engagement Lead at Grant Thornton in connection with the audit of the financial statements of Cumbria Local Government Pension Scheme (LGPS) for the year ended 31 March 2021.The Letter of Representation sought to provide the external auditor with the assurance that their audit had been based upon the complete financial picture of the Accounts, up to the date of the signing of the Accounts, and that the Accounts were in full compliance with statutory requirements.

The Director of Finance (s151 Officer) asked that members consider the contents of the Letter of Representation and approve the signing of the letter by the Director of Finance (s151 Officer) and Chief Executive.

Approval of this item is recoded at Minute 162.

To consider a report from the Director of Finance (s151 Officer).

Members considered a report from the Director of Finance (s151 Officer) which provided a detailed overview of the Council’s response to the External Audit Findings Report. The Senior Manager Accountancy (Deputy s151 Officer) highlighted the key messages of the Audit Findings Report explaining that Grant Thornton intended to issue an unqualified audit opinion on both the Cumbria County Council and the Cumbria Local Government Pension Fund (Cumbria LGPS) 2020/21 Accounts.

Further discussion and approval of this item is recorded at Minute 162.

To consider a report from the Director of Finance (s151 Officer).

The Director of Finance (s151 Officer) provided an overview of the Port of Workington Statement of Accounts 2020/21. It was explained that these accounts were audited separate to the Cumbria County Council accounts by the External Auditor.

Further discussion and approval of this item is recoded at Minute 162.

To consider a report from the Chief Legal Officer (Monitoring Officer).

Members considered a report from the Chief Legal Officer (Monitoring Officer) which presented and provided the background to the Annual Governance Statement 2020/21.

The Senior Lawyer – Governance explained that since publication of the draft statement the Secretary of State for housing, communities and local government announced his intention to implement proposals for local government reform in Cumbria which would see the creation of two new unitary authorities in Cumbria and the dissolution of the existing authorities including the Council.  Members heard that to date this had had no impact on the governance arrangements.  In the period running up to the implementation date on 1 April 2023 there would likely be some impact on the governance arrangements of the Council and so there would be a need to continue to monitor this.  On this point, the Senior Lawyer – Governance explained that the Council would continue to work closely and cooperatively with the other authorities in Cumbria to respond to the proposals.  In addition, members heard that there has also been a focused Ofsted inspection which was referred to in the revised statement. Aside from these additions there had been no other significant events which would impact on the governance arrangements since the publication of the draft statement.

RESOLVED that,    

1)    Members approve the final Annual Governance Statement of Cumbria County Council for 2020/2021 before its publication on the Council’s website.

2)    Members note that the Leader of the Council and the Chief Executive will sign the Annual Governance Statement prior to publication.

Members considered the External Audit Findings Report for Cumbria County Council for the year ended 31 March 2021. The Engagement Lead and Senior Audit Manager from Grant Thornton provided a detailed account of the contents of the External Audit Findings Report.

The Engagement Lead began by reminding members that there was a new framework for the Value for Money judgement which meant it would be reported as part of a separate annual report by the revised deadline of 8 December 2021.

It was then confirmed that Grant Thornton anticipated issuing an unmodified and unqualified audit opinion and commented on the effective response time to their audit queries. Overall, the very small number and the nature of the adjustments reflected the continuing and sustained improvement and substantial progress the Council had made in strengthening the accounts process over recent years.

Further discussion and approval of this item is recoded at Minute 162.

The Engagement Lead and Senior Audit Manager from Grant Thornton provided a detailed account of the contents of the External Audit Findings Report for the Cumbria Local Government Pensions Scheme 2020/21.

Members were reminded of the challenges faced by both the Council’s Finance team and the External Audit team in producing the audited accounts to this point. The Audit work was completed remotely during June – September 2020/21. Members heard that one misstatement had been identified which management had not adjusted for in the financial statements on the grounds of materiality. This misstatement would increase the Schemes Net Assets by £19.8 million.

Further discussion and approval of this item is recoded at Minute 162.

To note the Forward Plan for the Audit and Assurance Committee and agree any additional items (copy enclosed).

It was AGREED that a report titled the Annual Auditors Report be added to the agenda for the December meeting of the Committee.

It was AGREED that a report relating to the Future Procurement of External Auditors be added to the agenda for the December meeting of the Committee.

The next meeting will be held on 3 December 2021 in Conference Room A/B, Cumbria House.

The next meeting of the Audit and Assurance Committee is due to take place on 3 December 2021 in Conference Room A/B, Cumbria House.