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Agenda item

External Audit Management Letter 2015/16

Minutes:

The Committee considered the report of the Head of Finance and Business Improvement setting out the Management Letter that had been produced as part of the external audit of the accounts.

 

The Senior Finance Manager (Client) explained that:

 

·  The Management Letter had been produced by the external auditors and its purpose was to draw the attention of the Committee to various matters that had arisen as a result of the audit.

 

·  The first five sections of the Management Letter provided background information and details of the scope and objectives of the audit and the overall audit strategy.  Section 6 provided an update on issues raised in the 2014/15 Management Letter and section 7 detailed recommendations arising from the 2015/16 audit and the management response.

 

·  Arising from the 2014/15 audit, the external auditors had made a recommendation that the Council set up a separate accounting system for the accounts relating to the Cobtree Manor Estate.  This was still under consideration.  Setting up a new company in the Council’s financial ledger could cost the Charity around £10,000 so the possibility of using a smaller separate accounting package was being investigated, and a report would be submitted to a future meeting.  The external auditors had also made a recommendation that the Council stop claiming VAT on behalf of the Charity, and set up a separate VAT registration, and this had been done.

 

·  Arising from the 2015/16 audit, the external auditors had made the point that the Café and car parking operations could be considered to be commercial activities for the purpose of taxation, and it was possible that the tax threshold limit might be reached in future financial years.  The situation would be monitored closely to see if there was a possibility of reaching the limit.  It could be argued that rather than being commercial activities, the Café and car parking operations existed to provide funds to reinvest in the Estate.  This point would be investigated further by the Officers, and, if necessary, a report would be submitted to a future meeting to enable the Committee to consider the potential implications.

 

·  In response to questions by Members, the Senior Finance Manager (Client) confirmed that he would:

 

(a)Discuss with the Chairman and the Director of Finance and Business Improvement the most cost effective way to set up a separate accounting system for the accounts relating to the Cobtree Manor Estate;

 

(b)Clarify the projected deficit in respect of the Café as at 31 July 2017 referred to in the external auditor’s third recommendation arising from the 2015/16 audit; and

 

(c)Make clear to the external auditors that there is only one car park at the Cobtree Manor Park.

 

During the discussion, it was suggested and agreed that consideration be given to increasing car parking charges at Cobtree Manor Park, possibly as part of a package linked to use of the Café.

 

RESOLVED:

 

1.  That the contents of the Management Letter and the action proposed by the Officers in response be noted.

 

2.  That a report be submitted to a future meeting of the Committee examining the options for increasing car parking charges at the Cobtree Manor Park, possibly as part of a package linked to use of the Café.

 

Supporting documents: