Contact: Ejner Knudsen, ext 7403 email: [email protected]

1 Summary and purpose of this report

1.1 The Audit Commission's revised Code of Practice now requires an independent report on certain aspects of the statutory audit to be made to those charged with governance (which has been agreed as the Council's Standards Committee).

1.2 The attached report will be introduced by the Audit Commission at the meeting and consolidates the statutory issues set out in the Statement of Auditing Standards (SAS) 610 with the revised judgements under the Comprehensive Performance Assessment (CPA).

1.3 Members of the Standards Committee are not required to formally respond to the issues raised in the report but need to consider the management response to them and this note advises on the current position.

1 Issues

1.1 In the context of a very satisfactory CPA, there are very few issues identified in the report and none which have a material effect on the accounts or control framework. The following paragraphs represent the comments made by management to any of the more significant matters discussed during the course of the audit which are mentioned in the report:

Page 6: Systems of financial control

The systems replacement project is still in its transitional phase and documentation of the control framework will be delivered after the roll out of SAP is completed in March 2005.

Page 7: Schools' financial returns and bank reconciliations

The LEA will continue to urge all schools to comply with requests to provide regular financial information, including bank reconciliations. The auditor acknowledges the autonomy of schools over local financial management.

Page 8: Systems reconciliations and holding accounts

The situation is again a reflection of the current transitional phase of systems replacement and it is expected that some rationalisation will be achieved as implementation progresses. The additional audit testing has provided assurance that any errors are minimal.

Page 10: Capitalisation of highways structural maintenance

As the auditor reports this is a conscious policy decision taken on the introduction of the Local Transport Plan to complement government funding with a level of local investment in capital repairs.

Page 10: Disclosure of related parties

This issue was raised too late for action this year and the basis of the existing related party disclosure will be reviewed in preparing 2003/04 Statement of Accounts.

Recommendation

1 The Committee are asked to welcome the satisfactory report and note the management reponses to the issues raised.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

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