Agenda item

A report of the Head of Finance.

A report of the Head of Financial Services was submitted setting out the Council’s Statement of Accounts 2020/21 (item 6 on the agenda filed with these minutes).

The Head of Financial Services, the Strategic Director, the Head of Strategic Support and Mark Surridge representing the External Auditors attended the meeting to assist with the consideration of the item.

The Committee were advised that statutory accounts were in line with the CIPFA code of practice.  Attention was drawn to the changes from 2019 within the report.

The Head of Financial Services thanked the accountancy team for supplying Mazars with the paper.

The Committee were advised in response to questions that:

·         In theory, the deficit of the collection of business rates should cause nil impact as the Council should be compensated for business rates relief.  The issue was complicated by the fact that Section 31 money should go into the fund to match the rates, however, it went directly into the reserves thus leaving a deficit in the collection fund.  Central government advised about how the deficit should be spread and how the account should work as well as how the deficit should be closed.  It was thought that the difference over the 3-5 year period should not be material.  There was a one-off Covid-reserve set up for 7,346,000 to offset the deficit.

·         In terms of year-end figures, compensation of commercial difference would be examined and it would be ensures that here were 12 months or four quarters in the accounts.

·         A legal dispute with a contractor had been reviewed also the amount that the claim included had been reviewed.  This was not considered to be a material liability from the Head of Service and the external auditors had been provided with emails and working papers to reflect this.  The numbers and the name of the contractor had been omitted to protect the organisation.  Figures would not be included in the accounts as they were in legal proceedings.  The event was contingent on an act that had not yet taken place and as such there was insufficient evidence to put the numbers in the statement.  If the dispute resulted in the Council having to make the payment then it would have to be put in the accounts, but it would not be a material amount from an accounts perspective.

·         Budgets were monitored throughout for both Income and Expenditure and filter to Finance and Performance Scrutiny as well as being separately audited and externally audited.  In terms of assurance they were a robust set of account that tallied to the Unit 4 System.

·         Regarding whether movement of money in and out of reserves was based on policy or circumstance, it was clarified that there was no general policy on when money was moved in and out of reserves, and usually occurred in response to circumstances. However standard custom and practice operates in respect of the Reinvestment Reserve which is topped up to a £500k on a regular basis (subject to the working balance having sufficient capacity) to allow ongoing funding for ‘spend to save’ activities.

The Chair raised issues with the lack of clarity in the narrative of the Statement of Accounts, highlighting that the narrative needed to explain issues to people who did not necessarily have an accounting background.  It was suggested that Mazars could look into best practice and this could be taken into account for next year’s Statement of Accounts.

RESOLVED

1.    That the Statement of Accounts for the year ended 31st March 2021 be approved and that the Chair (as Presiding person) be authorised to sign the accounts on behalf of the Audit Committee.

2.    That the Letter of Representation be approved for signature by the Chief Financial Officer.

Reasons

1 & 2. To comply with the Accounts and Audit (England) Regulations 2015.