Bridgend County Borough Council

1. Public Sector Bridgend County Borough Council Financial statements audit 2005/6 – Presentation to Audit Committee 26 October 2006 AUDIT Gilbert Lloyd Ian Pennington

2. Contents • Analysis of Accounts • Audit Issues and adjustments • Statement on Internal Control • Use of Resources opinion • What next?

3. Analysis of accounts • Balance sheet • Assets and liabilities • Revenue reserves • Council tax and NNDR collection • Consolidated revenue account

4. Assets and Liabilities Assets Liabilities

5. Council Tax Collection Ageing of Council tax debts Source: Iworld

6. NNDR Collection Ageing of NNDR debts Source: Iworld

7. Revenue Reserves Source: Draft financial statements

8. Consolidated Revenue Account • Detailed narrative in the accounts • Directorate deficit £1.5m as previously forecast • Offset by better than budgeted council tax collection • Management looking at ways of improving transparency

9. Contents • Analysis of Accounts • Audit Issues and adjustments • Statement on Internal Control • Use of Resources opinion • What next?

10. Audit issues and Adjustments • Audit adjustments – Revenue Account • Audit adjustments – Balance Sheet • Representation letter • Post balance sheet events

11. Audit adjustments – Revenue Account

12. Audit Adjustments – Balance Sheet

13. Audit issues and Adjustments • Representation letter • Post balance sheet events • No unadjusted audit differences to report

14. Contents • Analysis of Accounts • Audit Issues and adjustments • Statement on Internal Control • Use of Resources opinion • What next?

15. Statement on Internal Control • New statement prepared for 2005/06 • Process has been well performed • Bought into at the highest level (Cabinet, CMB and Audit Committee) • SIC reported in the first draft of the accounts amended to reflect Internal Audit’s “unsatisfactory” opinion • Detailed action plans taken out of final draft • The statement is very personalised to Bridgend, and interesting and informative • Authority should continue to review the process for 2006/7

16. Statement on Internal Control - continued • Audit Committee’s role is to: • Review SIC • Consider it in context of your work over the last 12 months • Reports read • Presentations given and • Questions answered • Make recommendations to the signatories • Audit Committee has considered the draft of the SIC as previously reported and recommended it to signatories subject to an amendment to Internal Audit year end opinion

17. Contents • Analysis of Accounts • Audit Issues and adjustments • Statement on Internal Control • Use of Resources opinion • What next?

18. Use of Resources • Background • Use of resources opinion – types • Use of resources opinion 2005/6

19. Use of Resources opinion • New code of audit practice • More formalised opinion • Eventually opinion will be incorporated into the financial statements • 2005/06 reported via the Relationship Manager’s audit letter – which will include detailed comments and issues • National moderation process

20. Use of Resources opinion • Links to Authority’s responsibilities • Not a “yes/no” opinion • Details will be in the RMAL

21. Use of Resources Opinion 2005/6 • Key matters • Performance management of services and staff (being dealt with by performance management flagship project and HR flagship project • System of internal control (as evidence by Chief Internal Auditor’s annual report) • Arrangements to maximise use of corporate asset base • Issues arising in year (primarily children’s services, and corporate culture review) • There are a number of other issues which will be reported in the RMAL

22. Contents • Analysis of Accounts • Audit Issues and adjustments • Statement on Internal Control • Use of Resources opinion • What next?

23. What next? • Relationship Manager’s Annual Letter • Regulatory plan for 2006/07 • Accounts signing process