Agenda item

Consider the Annual Audit Reports from the External Auditors on various entities for review and scrutiny prior to Council approval.  (Copies attached).

Scottish Borders Council Annual Report and Accounts

With reference to paragraph 7.1 of the Minute of 24 September 2018, 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 2018/19 and had given an unqualified audit opinion in all cases.    In addition Audit Scotland has 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.

 4.2      In response to questions, Ms Woolman advised that Audit Scotland had carried out an audit on community engagement which would provide comparative information across local authorities.   Regarding the £10.2m purchase price for Lowood Estate, Mr Robertson clarified that this figure included legal fees and tax costs.  He further advised that the Estate had been acquired for economic development and it was reasonable to pay all legal fees associated with such transactions.   Regarding payroll creditors’ balances, Mr Robertson acknowledged that the Council had not taken sufficient action to reflect the Audit Scotland opinion of 2017/18; however, configuration changes to the system had now been concluded as required. Regarding invoice payment performance Mr Robertson stated 84% of invoices were paid within 30 days and all invoices were processed within two days of receipt; an update on progress would be provided to the December 2019 meeting.  Regarding the arrangements around recurrent and non-recurrent savings, Mr Robertson clarified that there were no formal targets around temporary savings, incidences occurred when projects had been delayed.  With regard to digital transformation, a number of lessons had been learned including that necessity for the Council to be fully involved and retain ownership of such projects.

4.3       Charitable Trusts administered by Scottish Borders Council

With reference to paragraph 7.2 of the Minute of 24 September 2018, there had been circulated copies of a report by Audit Scotland in respect of Charitable Trusts administered by Scottish Borders Council.  Mr Haseeb of Audit Scotland advised that there were no material adjustments to the financial statements. However, he highlighted that the cash flow statements for Common Good Funds had required a number of changes and these had been amended.  

4.4       Scottish Borders Council Pension Fund

With reference to paragraph 7.1 of the Minute 24 September 2018, there had been circulated copies of a report by Audit Scotland in respect of Scottish Borders Council Pension Fund.  Mr Hasseb of Audit Scotland presented the report, advising that there were no material adjustments to the unaudited financial statement arising from the audit.  Mr Haseeb highlighted that the triennial valuation showed a funding level of 114% - which was the highest in Scotland.  In response to questions, Mr Robertson advised that the Council policy was auto-enrolment for new employees; the Fund’s investment strategy focused increasingly on income bearing assets which would fund future pension payments.  The next triannual valuation was March 2020 and would set contribution rates for the next three years. Regarding members’ lack of attendance at training events during the year, Mr Robertson stressed the importance of this issue and advised that it had been addressed with the individuals concerned.  

DECISION

NOTED the Annual Reports from the Council’s External Auditors prior to Council approval.