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Agenda and minutes

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Contact: John Williams, Democratic Services Officer  020 8496 4344 | Email:

No. Item




In the absence of the Chair and Vice-Chair, the Democratic Services Officer sought nominations for Chair of the meeting.


Councillor Patrick Edwards was duly nominated, seconded and there being no other nominations, elected Chair.


Councillor Patrick Edwards in the Chair




Apologies for absence were received from Councillors Rosalind Doré and Joe Lacey-Holland.


It was noted that Councillors Saima Mahmud and Richard Sweden were present as substitute Members for Councillors Doré and Lacey-Holland.


Councillor Edwards was delighted to announce that the Chair of the Committee had just become a father, to a baby girl.  The Committee asked that their warmest congratulations be sent to Joe and Ros.



To note the resignation of the independent co-opted member of the Committee, Ms Caryle Webb-Ingall, with effect from 4 July 2019.


The selection process for a new independent member will begin shortly and following which a recommendation for appointment will be made to full Council.


The Committee noted the resignation of the independent co-opted member of the Committee, Ms Caryle Webb-Ingall, with effect from 4 July 2019.  Members wished to put on record their thanks for her service to the Council both as the Independent Person under the Localism Act, and for her counsel to the Committee.  They wished her every happiness for the future.


John Williams briefly outlined the selection process which had previously been used to select the independent member.  The Chair said that the Committee would like to be involved in this prior to the recommendation for appointment to full Council, and officers undertook to build this into the process.




Members are required to declare any pecuniary or non-pecuniary interests they or their spouse/partner may have in any matter which is to be considered at this meeting. Interests are defined on the inside cover of this agenda.


Councillor Sweden declared a general non-pecuniary interest as a trustee of Leyton Orient Trust in relation to the SCORE building, which the Trust occupies, referred to in the accounts.


Councillor Mahmud and Councillor Sweden declared a general non-pecuniary interest as members of the Local Government Pension Scheme.




Minute 4 - Internal Audit and Anti-Fraud Division - Annual Report and Opinion on the Council's Internal Control System 2018-19: School Audits - Councillor Fitzgerald said that her statement had been incorrectly recorded, and in fact she had said schools which did not buy into the Governing Bodies’ Unit’s training programme would not necessarily have information about, or access to, any specific training which might be provided. She asked how clear the Council was with them on what was expected. 

The Committee accepted the amendment.

Subject to this, the minutes of the meeting held on 3 July 2019 were approved as a correct record and signed by the Chair


UNAUDITED ACCOUNTS 2018/19 pdf icon PDF 141 KB

Additional documents:


Consideration was given to a report of the Strategic Director of Finance and Governance and the Chief Accountant.


Assurance - The Chair sought to establish the purpose of the report and the meeting. In the light of the other report on the agenda, he struggled to see the value of considering unaudited accounts without the assurance provided by external audit.  He stressed that the reason the Council employs external auditors is to obtain the assurance that Members of the Council and residents require and deserve.


Officers explained that the accounts as presented this time were essentially for information.   This was the opportunity for Members to see them in advance of the September meeting, when the audited accounts would be presented.


Notes to the Accounts - Members were interested to know which Notes to the accounts had been omitted this time.  It was explained that the exclusion of notes was considered against the Council’s materiality threshold.  Materiality levels are designated by the external auditor and are generally considered to be the level below which information is not deemed necessary to inform the reader’s judgement of the “true and fair” nature of the accounts. It was explained that the excluded notes were below these materiality thresholds, for example ‘accumulated absence’ calculations of outstanding leave, where there is no real ultimate impact on the state of the Council’s finances.  Nevertheless, Members said they would like to see which Notes had been taken out.


Reserves - Councillor Mahmud asked to what extent the reserves represented a contingency for the many of the Council’s current projects, for example Borough of Culture.  Mr Bacchus said this is considered within the resilience element of the budget report, and that a key part of the external audit is the Value for Money judgement.  The Chair felt that this should be an integral part of the process of budget setting (as recently discussed by the Budget and Performance Scrutiny Committee.)  Officers confirmed that reserves levels are integral to budget setting, and resilience is specifically mentioned in the budget report.


Financial Planning – Officers added that local authorities are in a period of exceptional uncertainty, given the spending review, the Fair Funding Review and a review of business rates, coupled with a new Prime Minister who may have different priorities.  There has been a degree of modelling but without certainty financial planning is difficult, although assumptions are prudent. Councillor Sweden also noted the impact of an ever-greater share of Council’s resources being raised locally. 


Minimum Revenue Provision - It was clarified that this is a minimum revenue charge to ensure capital expenditure funded from borrowing is financed.  It is reviewed three times a year as part of the Treasury Management reporting to the Committee.




The Committee


(a)  noted the report; and


(b)  asked to see which Notes had been taken out of the accounts, and why.





Consideration was given to a report of the Strategic Director of Finance and Governance and the Chief Accountant.


The report set out the reasons why the Council had not been able to publish audited accounts by 31 July as required by the Accounts and Audit Regulations 2015.


The Chair questioned the external auditors EY closely on the reasons provided. He quoted the Municipal Journal which on 3 June said, “The auditor has blamed ‘recent high levels of attrition and difficulties in recruiting to replace a number of government and public services trained staff sufficient to resource and deliver audits that meet the required quality standard within the tight timescale to 31 July’ “.  He noted that Waltham Forest was not alone, and that at least 19 other authorities were in a similar position.


He also quoted EY’s report to the PSAA, which said that the firm had achieved a KPI of 90 per cent of audits achieved on time in 2018-19 when the target was 100 per cent.  He was concerned that they may have stretched themselves too far with new clients.


Debbie Hanson reiterated the reasons for the delay set out in the report and accepted that the firm had experienced recruitment and retention problems.  There were also factors peculiar to Waltham Forest in additional to the national picture.  This included the delay caused by the need to avoid a potential conflict of interest for EY as a result of there being at the time a Member of the Council who worked for the firm. 


This was EY’s first year with Waltham Forest, and a new auditor always takes longer to start the process and understand the organisation.  It is also the first year that local government was expected to meet the much tighter July deadline, which was previously the end of September. 


Furthermore, preliminary work with the Council indicated the need for additional testing of the Council’s financial processes and systems, especially the processing of journals.  It was clarified that a journal is a record of financial transactions in order by date.


The Chair asked about the cost implications of the delay.  Ms Hanson said there would be additional costs if the need for extra work and further meetings came to light.  Nevertheless, but without pre-empting the auditors’ opinion, she expressed confidence that the accounts would be audited in time for the September meeting of the Committee.




The Committee notedthat Ernst & Young LLP (EY) will commence the audit of the Council and Pension Fund accounts in August 2019 and their findings are expected to be reported to the Committee in September 2019.