Agenda item

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

With reference to paragraph 4.1 of the Minute of 23 September 2019 there had been circulated copies of covering letters and 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 2019/20 and had given an unqualified audit opinion in all cases.  Mrs Woolman and Mr Samson from Audit Scotland summarised the report.  Mrs Woolman advised that the financial statement gave a true and fair view and included, exceptionally, an ‘Emphasis of Matter’ paragraph for Common Good Funds and the Ormiston Trust for Institute because of the uncertainties caused by Covid-19 on property valuations.   There were no unadjusted misstatements or material weaknesses in the accounting and internal control systems identified during the audit.  The Committee confirmed that they knew of no issues or any concerns with regard to fraud or non-compliance.

6.2         A number of questions were raised which were answered by officers.   Regarding Education Maintenance Grants, Mr Samson explained that external audit had identified discrepancies over attendance records and payments over the past few years.   Officers had explained that school staff were satisfied pupils were in attendance but attendance records were not always updated accordingly.  The Service Director Customer and Communities, Mrs Craig, added that record management had been reviewed and progressed through Business World. In response to a request by Management, Internal Audit were also reviewing the process, ensuring appropriate controls and monitoring was in place.  An update would be provided at a future meeting.   With regard to the £0.8m health and social care overspend, Mr Robertson acknowledged that this was not sustainable.   The ongoing problem of overspends with respect to the Social Work Budget had the potential to destabilise the Council’s financial planning, was well documented in the Outturn report and Risk Register, and would be the focus of the Corporate Management Team going forward.  Mr Robertson advised that slippage of the capital plan was a common to most other Councils and was currently being reviewed in terms of the impact of Covid-19, to ensure realistic and deliverable projects for 2021/2022.  Regarding Executive Committee’s lack of opposition membership, Mrs Woolman advised that local authorities had different administration models and this comparison would be captured in their 2020/21 Audit report.   Regarding the Community Toolkit, Mrs Woolman agreed to include, as amendment to the draft report, a recommendation for more explicit monitoring going forward.   With regard to payroll creditors, positive reassurance had been received from managers that Business World had improved the system of internal controls.  With regard to the significant increase in gas consumption, Mr Robertson explained that this related to converting existing inefficient oil based systems to gas, and also additional heating costs associated with the opening of new buildings for example the Jedburgh Campus and Kelso High School.  Whenever possible, renewable technology was used to minimise energy consumption within the Council’s estate. Mrs Stacey added that an internal audit of the Council’s decisions in terms of climate change would consider associated performance indicators aligned to carbon emissions.   Regarding the Brexit Response Team, Mrs Stacey confirmed the Team had been meeting throughout the pandemic and the Brexit Risk Register continued to be updated.  Mrs Woolman confirmed she would reference, in the draft report, the uncertainty around the European Union and Brexit.   Members noted that ‘Following the Public Pound’ guidance would be refreshed in November 2020 and not November 2021 as stated in the report.   The Chairman thanked Mrs Woolman and Mr Samson for their attendance and the comprehensive, clear reports provided to the Committee.

DECISION

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