Agenda item

Consider the following reports (Copies attached.):-

5.1    There had been circulated copies of a report by Audit Scotland, the Council’s Auditors, together with a report by the Chief Financial Officer and a copy of the Annual Accounts 2018/19.  The Chief Financial Officer’s report explained that this was the third year of Audit Scotland undertaking the external audit of the Council’s Annual Accounts.  They also covered the Council’s related charities. Audit Scotland had now completed the audit of the Council’s 2018/19 Annual Accounts and had provided an unqualified independent audit opinion.  The Annual Audit Report summarised Audit Scotland’s conclusions, including:

·         An unqualified audit opinion

·         They concurred with management’s accounting treatment and judgements;

·         They concluded positively in respect of financial management, financial sustainability, governance and transparency and value for money.

Audit Scotland had identified two recommendations requiring action and these had been accepted by management and would be enacted within the agreed timescales.  As required under the Local Authority Accounts (Scotland) Regulations 2014, the audited Annual Accounts for Scottish Borders Council, Scottish Borders Council’s Pension Fund, SBC Common Good Funds, the SBC Charitable Trusts and Bridge Homes LLP, copies of which had also been circulated, had been presented to the Audit & Scrutiny Committee prior to signature and no issues had been raised. 

5.2     With reference to the KPMG Audit of SB Cares and SB Supports an amended recommendation was circulated and the Chief Financial Officer made the following statement:-

“Late in the 2018/19 Audit process for SBcares KPMG the LLP Auditors  identified that the actuarial valuation obtained from the pension fund actuary Hymans Robertson with respect to the 2018/19 valuation of the pension fund liabilities of  SBcares LLP  had been prepared on a different basis to the 2017/18 pension fund liability figures .  A revised report has been obtained from the Actuary this week and the impact of the updated figures is to improve the actuarial valuation of pension fund liabilities in SB Cares accounts by £250,000.  This adjustment due to timing is not however reflected in the accounts for SB cares in your agenda pack.  I am drawing this to your attention because the draft unadjusted Sbcares accounts do however form part of the Council’s 2018/19 consolidated group financial statements which are submitted to you today as part of the council agenda for approval. 

          I can confirm to the best of my knowledge, that the adjustments required to the SBcares accounts will not require any amendments which will have a material impact on the Council’s Group financial statements for 2018/19.  I have concluded, based on the information available to me, that the amendments required should not require Audit Scotland to amend their opinion on the Council’s group accounts. I propose to note this issue in my standard letter of representation to the Mrs Woolman as the Council’s appointed auditor following your approval of the financial statements. Depending on the decision you take at Item 11 regarding the future of SBcares this may amend the status of the draft SBcares accounts from them being classified as a going concern with material uncertainty to not a going concern.  This technical change would not however impact on the council’s group statements for 2018/19 and therefore does not affect ability to approve the audited accounts (excluding SBcares) this morning.   My recommendation is that in considering item 8 you therefore note the SBcares 2018/19 accounts and proceed to approve the Council’s group accounts for 2018/19 accordingly.“

5.3     Councillor Tatler commended the Chief Financial Officer and his team for their diligent work in preparing the accounts, which showed the Council had made good progress against a tough background of funding.  Councillor Bell, as Chairman of the Audit and Scrutiny Committee, also spoke in support of the accounts and the recommendations made by the Auditors.

         DECISION

         AGREED to:-

         (a)      approve the following audited Accounts:

                 (i)      the Scottish Borders Council’s audited Annual Accounts for the year to 31 March 2019;

                 (ii)     the Scottish Borders Council’s Pension Fund audited Annual Accounts for the year to 31 March 2019;

                 (iii)    the Scottish Borders Council Common Good Funds’ (Charity SC031538) audited Annual Accounts for the year to 31 March 2019;

                 (iv)    the SBC Welfare Trust (Charity SC044765) audited Annual Accounts for the year to 31 March 2019;

                 (v)     the SBC Education Trust (Charity SC044762) audited Annual Accounts for the year to 31 March 2019;

                 (vi)    the SBC Community Enhancement Trust (Charity SC044764) audited Annual Accounts for the year to 31 March 2019;

                 (vii)   the Ormiston Trust for Institute Fund (Charity SC019162) audited Annual Accounts for the year to 31 March 2019;

                 (viii)  the Scottish Borders Council Charity Funds’ (Charity SC043896) audited Annual Accounts for the year to 31 March 2019;

                 (ix)    the Bridge Homes LLP audited Annual Accounts for the year to 31 March 2019; and

                 (x)     Lowood Tweedbank Ltd Annual Accounts for the 30^th November 2018 to the 31 March 2019 (part year).

        (b)     note the following audited Accounts:

                 (i)      the SB Supports LLP audited Annual Accounts for the year to 31 March 2019; and

                 (ii)     the SB Cares LLP audited Annual Accounts for the year to the 31 March 2019;

        (c)     note the basis of the preparation of the accounts at (b)(i) and (ii) above may change from there being material uncertainty that SB Cares is a ‘going concern’ to a ‘not a going concern’ depending on decisions taken at paragraph 9 below.