To receive a report on the 2016/17 Accounts from the Council’s external auditor EY.

Adrian Balmer, EY, presented the Audit Results report on the 2016/17 accounts.  The External Auditor’s opinion was that the financial statements:

• gave a true and fair view of the financial position of Reading Borough Council and Group as at 31 March 2017 and of its expenditure and income for the year then ended, except for the following areas: short-term creditors; short-term debtors; comprehensive income and expenditure statement; and IAS 19 scheme assets; and
• had been prepared properly in accordance with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom.

The report explained that EY’s opinion was qualified because of a number of significant control deficiencies which included: no journal controls; no control account or bank and cash reconciliations; and no clear control over the year-end financial closedown processes.  In addition, EY had not been able to obtain sufficient appropriate compensating audit evidence in relation to the following areas: short-term creditors; short-term debtors; IAS 19 scheme assets and the following lines that made up the cost of services’ part of the comprehensive income and expenditure statement: Adult Care and Health Services; Corporate Support Services; Children, Education and Early Help Services; Environment and Neighbourhood Services and Housing Revenue Account.  Given the material uncertainty in these areas and the fact that EY had been unable to obtain the required level of assurance, EY could not form an opinion on the material correctness of these accounts.

Resolved:    That the position be noted.