Agenda item

The above report will be published on a supplemental agenda in accordance with the provisions of the Local Government (Access to Information) Act 1985.

The Committee received a report of the External Auditor which provided an update on progress in delivering their responsibilities as Durham County Council’s external auditors. It included at Section 2 a summary of recent national reports and publications for information (for copy see file of minutes).

P Darby responded to Mr C Robinson that the external audit teams were experiencing resource shortages and that this had meant the audit hadn’t effectively started until August.

Mr C Robinson asked if the external audit had seen an emerging risk with the PPE (Property, Plant and Equipment) valuations or other judgements within the accounts.

M Outterside responded that valuations of PPE was a technical issue that it was difficult to replace the cost value of PPE as the price of an asset was not seen but rather the costs on the local authority to run the asset. It was also difficult to add prices as the assets would be unique to the local authority.  He gave an example of a school building that could not be sold on the open market as it was a specialised building and would have a unique value.

P Darby added that PPE valuations were based on a high degree of estimation and judgements made on them and the number of variables involved. 

The Head of Corporate Property and Land noted that PPE valuations were difficult as they were initially measured on its cost but subsequently measured either using a cost or revaluation model, and depreciated so that its depreciable amount was allocated on a systematic basis over its useful life.  This relied on opinion and its interpretation.  If there were two opinions and we were unable to agree that the Council would adopt the Mazars opinion and amend its valuations accordingly to ensure its accounts could be signed off with an unqualified opinion.

M Outterside stated that Durham was not unique and this applied to all local authorities across the country. Information was checked and adjusted on merit that came out in the review.

P Darby thanked the team for all their hard work to pull together the external audit for the Council.

Resolved:

That the progress of the External Audit for Durham County Council be noted.