HA192 Annual Audit Letter - FINAL
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audit 2003/2004 Annual Audit Letter Hatfield Town Council INSIDE THIS LETTER PAGES 2 - 4 • The purpose of this letter • Key messages • Accounts and governance • Looking forward • Closing remarks PAGES 5 - 7 Appendices • Appendix 1 – Audit reports issued • Appendix 2 - Scope of our audit • Appendix 3 - Audit fees Reference: HA192 Annual Audit Letter Date: December 2004 audit 2003/2004 ANNUAL AUDIT LETTER Action needed by the council The council should: The purpose of this letter • take forward the recommendations from our This is our annual audit letter for councillors for reports on your BVPP and final accounts; 2003/04, and is presented by the council’s and district auditor. The letter summarises the • continue its own programme of review of conclusions and significant issues arising from activities eg the Birchwood Centre. our recent audit of the council. We have issued separate reports during the year. These reports are listed at Appendix 1. Appendix 2 sets out the scope of our audit and Accounts and governance appendix 3 provides information about the fees charged. Best Value Performance Plan We have issued an unqualified opinion on your Best Value Performance Plan (BVPP). Key messages We have completed our work on the performance information (Best Value Performance Indicators) included in the BVPP Best Value Performance Plan and on the BVPP’s compliance with guidance. ...
Voir
Reference:
HA192 Annual Audit Letter
Date:
December 2004
Annual Audit Letter
Hatfield Town Council
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The purpose of this letter
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Key messages
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Accounts and governance
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Looking forward
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Closing remarks
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Appendices
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Appendix 1 – Audit reports issued
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Appendix 2 - Scope of our audit
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Appendix 3 - Audit fees
audit
2003/2004
audit
2003/2004
ANNUAL AUDIT LETTER
Annual Audit Letter – Audit 2003/2004
Hatfield Town Council – Page
2
The purpose of this letter
This is our annual audit letter for councillors for
2003/04, and is presented by the council’s
district auditor. The letter summarises the
conclusions and significant issues arising from
our recent audit of the council.
We have issued separate reports during the
year. These reports are listed at Appendix 1.
Appendix 2 sets out the scope of our audit and
appendix 3 provides information about the fees
charged.
Key messages
Best Value Performance Plan
We have issued an unqualified opinion on your
Best Value Performance Plan.
Audit of 2003/04 accounts
We have given an unqualified audit opinion on
your financial statements.
Financial position
The council recorded a deficit of £78,000 in the
2003/04 year. This leaves a revenue account
balance of £27,000.
Other accounts and governance
issues
Your overall corporate governance arrangements
are satisfactory in most key areas. We have,
however, identified weaknesses that need to be
addressed in the areas of recruitment, bank
reconciliation, and contingency planning.
Appropriate recommendations have been made
in the final accounts memorandum.
Action needed by the council
The council should:
•
take forward the recommendations from our
reports on your BVPP and final accounts;
and
•
continue its own programme of review of
activities eg the Birchwood Centre.
Accounts and governance
Best Value Performance Plan
We have issued an unqualified opinion on your
Best Value Performance Plan (BVPP).
We have completed our work on the
performance information (Best Value
Performance Indicators) included in the BVPP
and on the BVPP’s compliance with guidance.
We have issued an unqualified opinion.
However, we have made recommendations that
will help the council improve the BVPP and its
associated processes.
Audit of 2003/04 accounts
We have given an unqualified opinion on your
financial statements.
This year the financial statements needed to
reflect the revaluation of the councils fixed
assets and the implementation of FRS17 in
relation to pension costs. Though problematical
these were properly reflected in the statements.
Councillors approved the annual accounts in
accordance with the statutory timetable. It
should be pointed out however that over the
next few years the deadline for completion of
the accounts will be brought forward in line with
the government’s requirements.
Financial standing
The council recorded a deficit of £78,000 in the
2003/04 year. This leaves a revenue account
balance of £27,000.
The council planned to use £63,000 of reserves
to meet its 2003/04 spending plans. Actual
outturn showed a use greater than this.
audit
2003/2004
ANNUAL AUDIT LETTER
Annual Audit Letter – Audit 2003/2004
Hatfield Town Council – Page
3
The table below shows the level of reserves
available to the council at 31 March 2004
compared to previous years.
EXHIBIT 1
2004
2003
2002
Reserves
£27,200
£104,900
£68,500
The net pension fund liability as at
31 March 2004 is £153,000. The primary cause
of the change from an estimated net liability of
£252,000 at 31 March 2003 has been the
increase in the capital value of the fund’s
investment assets, arising from a rise in equity
markets from the low position during 2002/03.
It must be noted that liabilities will be
discharged as people retire in future years and
will be offset by future contributions.
It is also important to note that the transactions
now in the council’s accounts are neutral in their
effect on council tax.
Systems of internal financial
control
Your overall corporate governance arrangements
are satisfactory in most key areas. We have,
however, identified weaknesses that need to be
addressed in the areas of recruitment, bank
reconciliation, and contingency planning.
Appropriate recommendations have been made
in the final accounts memorandum.
The Town Clerk acts as the internal auditor.
There is no formal internal audit plan, however.
We have recommended that such a plan is
prepared.
We have made recommendations in respect of
other areas where processes and procedures
could be improved.
•
Recruitment
; compliance with the Asylum
and Immigration Act criteria is an area
requiring attention.
•
Bank reconciliation
s; internal checks could be
strengthened by the Town Clerk reviewing
the Deputy Town Clerks work.
•
Disaster planning
; contingency actions
needing to be taken in the event of a disaster
need to be considered and documented.
Standards of financial conduct
and the prevention and detection
of fraud and corruption
We have not identified any significant
weaknesses in your arrangements to prevent
and detect fraud and corruption.
Looking forward
Future audit work
We have agreed an audit and inspection plan for
2004/05 and we have reported in this letter
those aspects that have already been
completed. The remaining elements of that plan,
including our audit of the 2004/05 accounts, will
be reported in next year’s annual audit letter.
We will be preparing our audit plan for 2005/06
by the end of March 2005 to ensure that, in
future, you are able to consider our audit plans
before the start of the financial year. We will
continue to ensure that our work is risk-based
and relates to the improvement priorities of the
council, wherever possible, when planning that
work.
Revision to the Code of Audit
Practice
The Audit Commission has consulted on a
revised Code of Audit Practice for application to
the audit of the 2005/06 accounts. The new
code, which will be laid before parliament in
January 2005, is designed to secure:
•
a more streamlined audit, which is
proportionate to risk and targeted on areas
where auditors have most to contribute to
improvement;
•
a stronger emphasis on value for money,
focusing on corporate performance and
financial management arrangements (rather
than individual services and functions); and
•
better and clearer reporting of the results of
audits.
Further details will be provided in the audit and
inspection plan 2005/06.
audit
2003/2004
ANNUAL AUDIT LETTER
Annual Audit Letter – Audit 2003/2004
Hatfield Town Council – Page
4
Closing remarks
This letter has been
discussed and agreed with
Peter Clark and Paul Widdicombe. A copy of the
letter was presented at the resources committee
on 8 December 2004.
The council has taken a positive and
constructive approach to our audit and I would
like to take this opportunity to express my
appreciation for the council’s assistance and
co-operation.
Availability of this letter
This letter will be published on the Audit
Commission’s website at
www.audit-commission.gov.uk
, and also on the
council’s website.
Rob Murray
District Auditor
8 December 2004
Status of our reports to the
council
Our annual audit and inspection letter is
prepared in the context of the statement of
responsibilities of auditors and audited bodies
issued by the Audit Commission. Annual audit
and inspection letters are prepared by
appointed auditors and addressed to
councillors and officers. They are prepared for
the sole use of the audited and inspected body,
and no responsibility is taken by the Audit
Commission or its appointed auditors to any
member or officer in their individual capacity,
or to any third party.
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2003/2004
APPENDICES
Annual Audit Letter – Audit 2003/2004
Hatfield Town Council – Page
5
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Audit reports issued
Report
Date issued
Audit Plan
July 2003
BVPP Report
November 2004
Final Accounts Memorandum
December 2004
Annual Audit Letter
December 2004
audit
2003/2004
APPENDICES
Annual Audit Letter – Audit 2003/2004
Hatfield Town Council – Page
6
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Scope of our audit
Our main objective as your appointed auditor is to plan and carry out an audit that meets
the requirements of the code of audit practice. We adopt a risk-based approach to planning
our audit, and our audit work has focused on your significant financial and operational risks
that are relevant to our audit responsibilities.
Central to our audit are your corporate governance arrangements. Our audit is then
structured around the three elements of our responsibilities as set out in the code and shown
below.
THE THREE MAIN ELEMENTS OF OUR AUDIT OBJECTIVES
Accounts
•
Opinion.
Financial aspects of corporate governance
•
Financial standing.
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Systems of internal financial control.
•
Standards of financial conduct and the prevention and detection of fraud and corruption.
•
Legality of transactions.
Performance management
•
Use of resources.
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Performance information.
•
Best Value Performance Plan.
The Audit Commission has circulated to all audited bodies a statement that summarises the
key responsibilities of auditors. Our audit has been conducted in accordance with the
principles set out in that statement. What we say about the results of our audit should be
viewed in the context of that more formal background.
audit
2003/2004
APPENDICES
Annual Audit Letter – Audit 2003/2004
Hatfield Town Council – Page
7
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Audit fee
Audit fee update
Audit area
Plan 2003/04
Actual 2003/04
Accounts
£3,400
£3,400
Financial aspects of corporate governance
£800
£800
Performance
£4,500
£4,500
TOTAL CODE OF AUDIT PRACTICE FEE
£8,700
£8,700
