Issue - meetings

Robin Baker, Director and Engagement Lead and Angela Pieri, Engagement Manager, representing Grant Thornton, the county council's external auditors, presented the audit findings for Lancashire County Council. The report at appendix A explained the overall findings of the external auditor in relation to the audit of the annual accounts of Lancashire County Council, the external auditor's proposed opinion on the accounts; and the value for money conclusion.

The following points were highlighted:

·  This was the standard annual report that was brought to the committee prior to the approval of the accounts and included the key findings and conclusions arising from the statutory audit of Lancashire County Council and the preparation of the financial statements for the year ended 31 March 2019.

·  All outstanding items were now completed and subject to the committee's approval, the auditor's intention was to issue an unqualified opinion confirming that the accounts presented a true and fair view of the Council's financial position.

·  With regard to the net pension fund liability of £1.2 billion, the auditors challenged and evaluated the work of the actuaries who assess this figure. The auditors had reviewed with officers the potential impact of a national legal case regarding age discrimination for judges and firefighters pension schemes (the McCloud judgement). This resulted in a £17.7 million increase in the pension liability. There was no impact to the useable reserves of the Council as a result of this.

·  The audit also looked at the external process of valuing land and buildings assets, which currently stood at just over £2 billion. Around 40% of assets had been revalued during the year. It was highlighted that there was a £3.5 million unadjusted error from 2017/18. There was no impact to the usable reserves of the Council as a result of this and there were no material errors that would impact on the auditor's unqualified opinion of the accounts.

·  The auditor's also reviewed the narrative report that set out the picture of the Council's financial position and the annual governance statement. This review confirmed that they were both reflective of the auditor's knowledge of the organisation and had been prepared in accordance with statutory guidance. The auditors could therefore issue a clean, unmodified audit opinion with respect to both these.

·  The auditors also looked at whether the Council made appropriate arrangements for ensuring value for money by making the best use of resources. As previously discussed, the internal audit was able to give an overall moderate assurance opinion which was a significant improvement on the position of previous years. On this basis the auditor would issue an unqualified value for money opinion confirming that the Council had appropriate arrangements in place. Detailed work had also been undertaken reviewing the financial sustainability of the Council. It was acknowledged that substantial savings had been made and this would need to be maintained in light of the continuing challenges faced. Progress with regard to this would be monitored going forward.

In response to questions the following information was clarified:  ...  view the full minutes text for item 8