The Annual Audit Letter from Ernst & Young, presented to Civic Affairs Committee on 15 February, covers the financial year ending 31 March, 2016 and comes at the end of the council’s audit process, which is carried out each year.
A letter is issued each year so that the public, councillors and other stakeholders can be made aware of any important issues or potential risks arising from the audit work.
The auditors identified the following key areas and undertook specific work to ensure that the council’s annual Statement of Accounts for 2015-16 was accurate and appropriate in these areas:
- Valuation and impairment of property, plant and equipment
- Pension liability
- Management override of controls
- Revenue and expenditure recognition
The Statement of Accounts allows the council to set out how it has used public money and how it can demonstrate its financial management and financial health.
Ernst & Young assessed whether the council has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, and concluded without qualification that this was the case.
Auditors concluded that the council has responded well to recent financial pressures including economic downturn and reductions in government funding. They indicated the council has a proven track record for achieving savings and achieving its budget, and that its General Fund balance of £16m is comfortably in excess of the minimum required balance of £5.1m.
The letter also identified the UK’s departure from the European Union and more devolved authorities in the East Anglia region as two issues that may have an impact on the council’s finances in the future.
Cllr Russ McPherson, Chair of Civic Affairs Committee, said: “I am pleased that our external auditors have concluded that the council has robust systems in place to ensure we offer good value for money to our residents and service users.
“Despite a challenging economic landscape in recent years, particularly due to reduction in government funding, we remain committed to providing essential services for all Cambridge people. To do that we have to ensure we have reliable financial management systems in place.”
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