Agenda and minutes

Audit and Performance Committee - Monday 17th June, 2019 6.30 pm

Contact: Andrew Palmer, Senior Committee and Governance Officer  Tel: 020 7641 2802 Email:

No. Item



To note any changes to the membership.


1.1       There were no changes to the membership.


Declarations of Interest

To receive declarations by Members and Officers of the existence and nature of any personal or prejudicial interests in matters on this agenda.


2.1       There were no declarations of interest.


Annual Accounts and Outturn 2018/19 - Formal Approval pdf icon PDF 649 KB

Report of the Executive Director of Finance & Resources.

Additional documents:


3.1       Gerald Almeroth (Executive Director of Finance & Resources) and Dave Hodgkinson (Director of Corporate Finance & Property) presented the draft Statement of Accounts for the City Council and its Pension Fund, and provided a narrative as to the outturn position for the financial year ended 31 March 2019.  Since the last meeting of the Committee on 2 May 2019, Grant Thornton had continued to work on their audit of the accounts as Westminster’s external auditors.


3.2       The Committee noted that the General Fund revenue position had seen a net outturn of £3.916m underspend against an approved budget of £187.641m, which compared to a Period 10 (January 2019) forecast underspend of £4.141m.  The revenue underspend would increase the Council’s general reserves to £62.783m; and increase the Council’s financial resilience and ability to withstand any short-term funding shortfalls that may result from the Fair Funding Review and Spending Review. The HRA revenue outturn was a surplus of £4.678m, against a budgeted surplus of £6.993m. HRA General Revenue balances, after the funding of the capital programme, had reduced to £17.234m in line with expectations within the HRA business plan approved in March. The General Fund capital outturn represented a gross expenditure underspend of £54.858m against budget and a net underspend of £44.571m; which compared to a gross expenditure budget of £279.078m and income budget of £108.870m.  The HRA capital outturn had a variance of £12.305m (in year underspend) against a revised budget of £113.329m. The total value of the Pension Fund had been £1.408bn as at 31 March 2019, and had an allocation of 9% within property; 1% in infrastructure; 69% in equities; and 21% in fixed income.


3.3       The Executive Director of Finance & Resources presented an additional paper which outlined three proposed changes to the financial statements submitted to the Committee, which had arisen due to emerging issues which had to be dealt with late in the audit process. It was proposed that the financial statements would be revised to incorporate:


           An update for the value of the City Council’s HRA Dwellings as at 31 March 2019;

           A note on a contingent liability on the Council’s Pension Fund which had arisen from the recent McCloud judgement in the Court of Appeal; and

           An adjustment to the accounts resulting from the bank reconciliation.


In light of the revisions, the paper recommended that a revised set of accounts was produced which included the changes; and authority for sign-off be delegated to the Chairman. 


3.4       The Director of Corporate Finance & Property reported that the City Council had historically valued dwellings on 1 April at the beginning of the financial year, but needed to demonstrate that the valuation was not materially different at the end of the financial year on 31 March. In previous years there had never been a material movement and therefore no adjustment to the accounts had been needed. However, due to market conditions, Westminster’s auditors had identified that there could have been a material movement in 2018/19. In addition, the  ...  view the full minutes text for item 3.


Audit Findings Report 2018/19 pdf icon PDF 76 KB

Report of the City Council’s external auditors.

Additional documents:


4.1       Paul Dossett, Laurelin Griffiths and Paul Jacklin (Grant Thornton) presented a report from Westminster’s external auditors, which set out the key findings from the work that had been completed in their audit of the City Council’s financial statements (Council and Pension Fund) for the year ending 31 March 2019.


4.2       The audit progress report for the City Council had highlighted significant risks, together with the work that was being done to mitigate potential problems. The risks had included management over-ride of controls; valuation of land and buildings; valuation of the pension fund net liability; and the provision for Business Rate appeals. Grant Thornton confirmed that testing on the accounts was almost complete. No comments had been received during the public inspection period, which was due to finish on 18 June. The auditors’ final checks could include minor, immaterial amendments to the accounts, but the auditors expected to issue unqualified audit opinions on both sets of financial statements.


4.3       Grant Thornton commented on the implications of the McCloud judgement, which was a national issue that could increase pension liabilities and could possibly affect all local authority pension funds. The Committee noted that the auditors had received a report from the actuary on the possible estimated impact of the judgement, and that the auditor’s response was in progress.


4.4       Committee Members discussed the Action Plan that had been included in the report, and noted that the income manager system that had been introduced to interface with the new ledger system was working well, with few difficulties being found in the reconciliation by the end of the financial year. The Director of Corporate Finance & Property confirmed that reconciliation would be carried out on an ongoing basis, with reports being run every day and a formal sign-off every month.


4.5       The Committee also discussed the valuations of land and property, and acknowledged the need to review the valuer’s reports to ensure they were complete.


4.6       The Committee thanked Grant Thornton for their work in auditing the City Council’s final accounts.


4.7       RESOLVED: That the draft audit findings and subsequent recommendations from Grant Thornton be noted.