[LETTER TO BE WRITTEN ON CLIENT HEADED PAPER]
Grant Thornton UK LLP
30 Finsbury Square
London
EC2A 1AG
[Date] – [TO BE DATED SAME DATE AS DATE OF AUDIT OPINION]
Dear Grant Thornton UK LLP
Spelthorne Borough Council
Financial Statements for the year ended 31 March 2024
This representation letter is provided in connection with the audit of the financial statements of Spelthorne Borough Council and its subsidiary undertakings, Knowle Green Estate (KGE), Spelthorne Direct Services (SDS) for the year ended 31 March 2024.
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 group and Council’s financial statements in accordance with International Financial Reporting Standards and the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 ("the Code"); in particular the financial statements are fairly presented in accordance therewith.
ii. We have complied with the requirements of all statutory directions affecting the group and 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 group and Council financial statements in the event of non-compliance. There has been no non-compliance with requirements of any 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. Such accounting estimates include Property, Plant and Equipment, Investment Property Valuations, Pension Fund Net Liability, Provisions, Depreciations, Financial Instruments, Accruals, Minimum Revenue Provision. 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. We understand our responsibilities includes identifying and considering alternative, methods, assumptions or source data that would be equally valid under the financial reporting framework, and why these alternatives were rejected in favour of the estimate used. We are satisfied that the methods, the data and the significant assumptions used by us in making accounting estimates and their related disclosures are appropriate to achieve recognition, measurement or disclosure that is reasonable in accordance with the Code and adequately disclosed in the financial statements.
vi. 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.
vii. Except as disclosed in the group and Council financial statements:
a. there are no unrecorded liabilities, actual or contingent
b. none of the assets of the [group and ]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. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of International Financial Reporting Standards and the Code.
ix. All events subsequent to the date of the financial statements and for which International Financial Reporting Standards and the Code require adjustment or disclosure have been adjusted or disclosed.
x. We have considered the reported known and potential misstatements and misclassification and disclosures changes schedules included in your Audit Findings Report.
xi. We accept that you have been unable to conclude your audit and evaluate the errors within the timeframe and the list of findings identified is not an exhaustive list of errors or potential errors.
xii. Actual or possible litigation and claims have been accounted for and disclosed in accordance with the requirements of International Financial Reporting Standards.
xiii. We have no plans or intentions that may materially alter the carrying value or classification of assets and liabilities reflected in the financial statements.
xiv. The prior period adjustments disclosed in the accounts to the financial statements are accurate and complete. There are no other prior period errors to bring to your attention.
xv. We have updated our going concern assessment. We continue to believe that the group and Council’s financial statements should be prepared on a going concern basis and have not identified any material uncertainties related to going concern on the grounds that:
a. the nature of the group and Council means that, notwithstanding any intention to cease the group and Council operations in their current form, it will continue to be appropriate to adopt the going concern basis of accounting because, in such an event, services it performs can be expected to continue to be delivered by related public authorities and preparing the financial statements on a going concern basis will still provide a faithful representation of the items in the financial statements
b. the financial reporting framework permits the entry to prepare its financial statements on the basis of the presumption set out under a) above; and
c. the group and Council’s system of internal control has not identified any events or conditions relevant to going concern.
xvi. We believe that no further disclosures relating to the group and Council's ability to continue as a going concern need to be made in the financial statements
xvii. The group and Council has complied with all aspects of ring-fenced grants that could have a material effect on the group and Council’s financial statements in the event of non-compliance.
Information Provided
xviii. All transactions have been recorded in the accounting records and are reflected in the financial statements.
xix. We have disclosed to you the identity of the group and Council's related parties and all the related party relationships and transactions of which we are aware.
xx. On 30 September 2024 parliament approved the Accounts and Audit (Amendment) Regulations 2024. These Regulations set a publication date for financial statements in respect of 2023/24 of 28 February 2025. The new National Audit Office Code which was approved on 14 November 2024 also requires that where auditors are unable to conclude their work, they should issue either a qualified audit opinion or a disclaimer of opinion by this date, known as the ‘statutory backstop date’. It has not been possible to provide you with the all the required information for you to complete your audit for year ending 31 March 2024 by the statutory backstop date. This includes the following:
a. providing you with:
i. access to all information of which we are aware that is relevant to the preparation of the group and Council’s financial statements such as records, documentation and other matters;
ii. additional information that you have requested from us for the purpose of your audit; and
iii. access to persons within the Council via remote arrangements, from whom you determined it necessary to obtain audit evidence.
b. communicating to you all deficiencies in internal control of which management is aware.
c. disclosing to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.
d. disclosing to you all information in relation to fraud or suspected fraud that we are aware of and that affects the group and Council, and involves:
i. management;
ii. employees who have significant roles in internal control; or
iii. others where the fraud could have a material effect on the financial statements.
e. disclosing to you all information in relation to allegations of fraud, or suspected fraud, affecting the financial statements communicated by employees, former employees, analysts, regulators or others.
f. disclosing 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.
g. disclosing to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements.
h. disclosing to you all matters in relation to the accounting treatment of transactions between the council and its subsidiaries including, group consolidations.
i. disclosing to you all known information on the Minimum Revenue Provision and impact on the financial statements including the basis of calculation, including the underlying judgements, assumptions and inputs underpinning the Council’s MRP charges including but not limited to useful economic lives adopted.
Annual Governance Statement
xxi. 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
xxii. The disclosures within the Narrative Report fairly reflect our understanding of the group and 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 Audit Committee at its meeting on [ENTER DATE].
Yours faithfully
Name……………………………
Position………………………….
Date…………………………….
Name……………………………
Position………………………….
Date…………………………….
Signed on behalf of the Council