Issue - meetings

To receive a report on the Audit Findings Reports for each Council owned company for the year ending 31 March 2024.

The committee considered the report which presented the audited financial statements of ANSA Environmental Services Ltd and Orbitas Bereavement Services Ltd for the year 2023-24.

The committee noted the internal control issue/risk relating to VAT, and that testing performed during the course of the external auditors’ work noted that multiple invoices had been dated pre year end but not invoiced by suppliers resulting in incomplete accrued expenses and VAT recoverable. Members queried if the council took steps to reclaim VAT at the earliest opportunity. In response, officers confirmed that processes were in place to recoup VAT at the earliest opportunity and the issue reported by the external auditor reflected a timing difference in how VAT is reported in the VAT return and that reported in the general ledger trial balance figure.  This matter was raised in the prior year audit and the difference between the two figures related to March invoices paid in April which are included in the VAT return for March (at the end of April) and whilst the expense was recognised in the accounts to 31 March via accruals, the VAT on the expense was not recorded until the invoice was processed/paid in April.  The VAT return process and related data from Unit4 ERP was consistent across the Cheshire East Group. 

The committee queried the issue reported in relation to ‘cash at bank’ and the external auditors’ comments that when performing their bank reconciliation, it was noted that the reconciling items on the bank reconciliation were not true reconciliation items. Assurance was provided that this related to small differences in the timing of payments (payments that were received after the cut-off – typically in the evening, via online payments). A live check-in of the bank account would be performed on 31 March into the evening to ensure that any late transactions were captured and coded before the end of year cut off.

RESOLVED:

That the Audit and Governance Committee

1. Note the Audit Findings Reports for each Council owned company for the year ending 31 March 2024.