Grant Thornton UK LLP
Fleming Way

Manor Royal

Crawley

RH10 9GT

 

20th September 2016

 

Dear Sirs

Thanet District Council

Financial Statements for the year ended 31 March 2016

 

This representation letter is provided in connection with the audit of the financial statements of Thanet District Council for the year ended 31 March 2016 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with International Financial Reporting Standards and the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2015/16 and applicable law.

We confirm that to the best of our knowledge and belief having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves:

Financial Statements

 

i         We have fulfilled our responsibilities for the preparation of the financial statements in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2015/16 ("the Code"); which give a true and fair view in accordance therewith.

 

ii        We have complied with the requirements of all statutory directions affecting the Council and these matters have been appropriately reflected and disclosed in the financial statements.

 

iii       The Council has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance. There has been no non-compliance with requirements of regulatory authorities that could have a material effect on the financial statements in the event of non-compliance.

 

iv      We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud.

 

v       Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable.

 

vi      We are satisfied that the material judgements used in the preparation of the financial statements are soundly based, in accordance with the Code and adequately disclosed in the financial statements. There are no other material judgements that need to be disclosed.

vii     Except as disclosed in the financial statements:

a   there are no unrecorded liabilities, actual or contingent

b   none of the assets of the Council has been assigned, pledged or mortgaged

c   there are no material prior year charges or credits, nor exceptional or non-recurring items requiring separate disclosure.

 

viii    We confirm that we are satisfied that the actuarial assumptions underlying the valuation of pension scheme assets and liabilities for IAS19 Employee Benefits disclosures are consistent with our knowledge.  We confirm that all settlements and curtailments have been identified and properly accounted for.  We also confirm that all significant post-employment benefits have been identified and properly accounted for.

 

ix      Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of the Code.

 

x       All events subsequent to the date of the financial statements and for which the Code requires adjustment or disclosure have been adjusted or disclosed. 

 

xi      Actual or possible litigation and claims have been accounted for and disclosed in accordance with the requirements of the Code.

 

xii     We have considered the adjusted misstatements, and misclassification and disclosures changes schedules included in your Audit Findings Report. The financial statements have been amended for these misstatements, misclassifications and disclosure changes and are free of material misstatements, including omissions.

 

xiii    We have considered the unadjusted misstatements schedule included in your Audit Findings Report and attached. We have not adjusted the financial statements for these misstatements brought to our attention as they are immaterial to the results of the Council and its financial position at the year-end.

 

xiv    We have no plans or intentions that may materially alter the carrying value or classification of assets and liabilities reflected in the financial statements.

 

xv     We believe that the Council’s financial statements should be prepared on a going concern basis on the grounds that current and future sources of funding or support will be more than adequate for the Council’s needs. We believe that no further disclosures relating to the Council's ability to continue as a going concern need to be made in the financial statements.

Information Provided

 

xvi    We have provided you with:

a   access to all information of which we are aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;

b   additional information that you have requested from us for the purpose of your audit; and

c   unrestricted access to persons within the Council from whom you determined it necessary to obtain audit evidence.

 

xvii   We have communicated to you all deficiencies in internal control of which management is aware.

xviii  All transactions have been recorded in the accounting records and are reflected in the financial statements.

 

xix    We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.

 

xx     We have disclosed to you all our knowledge of fraud or suspected fraud affecting the Council involving:

d   management;

e   employees who have significant roles in internal control; or

f    others where the fraud could have a material effect on the financial statements.

 

xxi    We have disclosed to you all our knowledge of any allegations of fraud, or suspected fraud, affecting the Council’s financial statements communicated by employees, former employees, regulators or others.

 

xxii   We have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements.

 

xxiii  We have disclosed to you the identity of all the Council's related parties and all the related party relationships and transactions of which we are aware.

 

xxiv  We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements.

 

Annual Governance Statement

xxv   We are satisfied that the Annual Governance Statement (AGS) fairly reflects the Council's risk assurance and governance framework and we confirm that we are not aware of any significant risks that are not disclosed within the AGS.

 

Narrative Report

xxvi  The disclosures within the Narrative Report fairly reflect our understanding of the Council's financial and operating performance over the period covered by the financial statements.

 

Approval

The approval of this letter of representation was minuted by the Council's Governance and Audit Committee at its meeting on 20 September 2016.

Yours faithfully

Name……………………………

Position………………………….

Date…………………………….

Name……………………………

Position…………………………

Date…………………………….

 

Signed on behalf of the Council

 

Unadjusted Misstatements

 

Detail

Comprehensive Income and Expenditure Account

Balance Sheet

Reason for not adjusting

 

 

£’000

£’000

 

1

-       Transfer of Council Dwellings to Assets under Construction (AUC) – Gross Book Value including Additions and Accumulated Depreciation

-        

-       AUC (Opening Gross Book Value)

-       Council Dwellings (Opening Gross Book Value)

-        

-       AUC Additions

-       Council Dwellings Additions

-        

-       AUC Accumulated Depreciation

-       Council Dwellings Depreciation

 

 

 

 

 

 

1,859

(1,859)

 

 

1,314

(1,314)

 

120

(120)

Response received from Thanet DC:

The CIPFA Local Authority Capital Accounting Reference Manual states that ‘categorisation hinges on the readiness  of the asset for use (not the readiness of the authority to use it or the project’s financial completion)’. Following a review of the HRA properties in question, we feel that these assets are ready for use (being purchased rather than constructed) but just not ready for use in the way that the Council intends to use them as council dwellings, as the conversions were not complete at the year-end. Accordingly, we view the conversions to be ‘change of use’ rather than Assets Under Construction (AUC). The properties are being converted to meet social housing needs rather than being demolished and rebuilt and accordingly we have classified them as HRA OLB not AUC.

2

-       Reversal of in year Depreciation Charge in respect of Council Dwellings above

-        

-       Accumulated Depreciation

-       Depreciation Charge to the CIES

-        

-       General Fund

-       Capital Adjustment Account

 

 

(137)

-        

-        

-        

-        

-       137

-        

-        

-       137

-       (137)