Agenda item

Consider the annual audit reports from the External Auditors of the Council,

Common Good Funds and Charitable Trusts, Audit Scotland, and of Bridge Homes, SB Supports and SB Cares LLPs, KPMG.   (Copies attached)

(i)         Scottish Borders Council Annual Reports and Accounts 2016/17

With reference to paragraph 6 of the Minute of 28 June 2017, there had been circulated copies of a report by Audit Scotland, the Council’s external auditors.  The report explained that Audit Scotland had now completed the audit of the Council’s Annual Accounts for 2016/17 and had given an unqualified audit opinion in all cases.  In addition, Audit Scotland concurred with management’s accounting treatment and judgements; and had reached positive conclusions in respect of financial sustainability, financial management, governance, transparency and value for money.  Ms Woolman, Audit Scotland was in attendance and summarised the report, in addition she advised that there were no material adjustments or unadjusted errors arising from the audit.

In response to questions, Mr Robertson advised that the £0.5m overspend noted with regard to the Scottish Wide Area Network (SWAN) was due to slippage in the project caused by the failure of an external partner to migrate sites.  An action to recover this cost was ongoing in conjunction with Dumfries and Galloway Council and progress would be reported to the Executive Committee.  Mr Robertson highlighted that further improvements would be made to the information Members received as part of budgetary monitoring process  including regular review of Strategic Asset Management Plans being developed for all asset classes.  These would include information regarding quality, risk and delivery of benefits.  With regard to the 46 outstanding equal pay claims, Mr Robertson advised that HR these were progressing as quickly as possible.   Mr Robertson referred to Bridge Homes LLP and explained that the project had been established to deliver 200 affordable housing across the Scottish Borders. Following a detailed analysis of available sites, the project had developed where possible.  However, there was now likely to be limited opportunity for further development. 

(ii)        Scottish Borders Council Pension Fund Annual Audit Report 2016/17 and Statement of Accounts 2016/17

With reference to paragraph 7 of the Minute of 28 June 2017 there had been circulated copies of the above reports by Audit Scotland in respect of Scottish Borders Council Pension Fund.  Ms Woolman advised there were no material adjustments to the unaudited financial statement arising from the audit.  The only misstatement identified related to an overstated debtor with the Council of £168k. This had been adjusted by finance officers.  Mrs Woolman highlighted the key message from the report was the benefits going out during 2016/17 exceeded the contributions coming in.  However, it was noted that the Investment Strategy had been revised to reflect this, with a move away from growth generating assets such as equities to income generating assets which would positively impact on cash flow.  

In response to questions, Mr Robertson advised that the Pension Fund assets were sufficient at the 2014 triennial valuation to meet 101% of its liabilities.  The Council’s Actuary, Barnett Waddingham, would present the 2017 Triennial valuation in December 2017 and this would set contribution rates for the following three years.  Mrs Robb reiterated  that the Fund’s investment strategy had been revised to fulfil cash flow obligations and that instead of  reinvesting annual dividends these were being drawn down to fulfil cash flow obligations.   With regard to early retirement payments, Mr Robertson explained that this did not adversely affect the Fund as the Council compensated the Fund for all employee contributions that were lost through early retirement via the strain on the fund calculation undertaken for all approved early retirals.

DECISION

AGREED

(a)        the Scottish Borders Council’s audited Annual Accounts for the year to 31 March 2017 (Appendix 1);

(b)       the Scottish Borders Council’s Pension Fund audited Annual Accounts for the year to 31 March 2017 (Appendix 2);

(c)       the Scottish Borders Council Common Good Funds’ (Charity SC031538) audited Annual Accounts for the year to 31 March 2017 (Appendix 3);

(d)       the SBC Welfare Trust (Charity SC044765) audited Annual Accounts for the year to 31 March 2017 (Appendix 4(i));

(e)        the SBC Education Trust (Charity SC044762) audited Annual Accounts for the year to 31 March 2017 (Appendix 4(ii));

(f)        the SBC Community Enhancement Trust (Charity SC044764) audited Annual Accounts for the year to 31 March 2017 (Appendix 4(iii));

(g)       the Thomas Howden Wildlife Trust (Charity SC015647) audited Annual Accounts for the year to 31 March 2017 (Appendix 4(iv));

(h)       the Ormiston Trust for Institute Fund (Charity SC019162) audited Annual Accounts for the year to 31 March 2017 (Appendix 4(v));

(i)         the Scottish Borders Council Charity Funds’ (Charity SC043896) audited Annual Accounts for the year to 31 March 2017 (Appendix 4(vi));

(j)         the Bridge Homes LLP audited Annual Accounts for the year to 31 March 2017 (Appendix 5);

(k)        the SB Supports audited Annual Accounts for the year to 31 March 2017 (Appendix 6 (i); and

(l)         the SB Cares audited Annual Accounts for the year to the 31 March 2017 (Appendix 6 (ii).

MEMBER

Councillor Tatler left the meeting during consideration of the above report.