Agenda item

Statement of the Accounts 2019/20

To present the Statement of Accounts 2019/20.

Minutes:

The report of the Director of Function (Resources)/Section 151 Officer highlighting the main issues arising since the draft Statement of Accounts was presented to the Audit and Governance Committee on 21 July, 2020 was presented.

 

The Director of Function (Resources)/Section 151 Officer -

 

           Advised that the Council’s draft Statement of Accounts for 2019/20 was presented to the Council’s external auditors for audit on the 6 July, 2020. Whilst the detailed audit work is now substantially complete, External Audit is not able to provide an audit opinion or publish its ISA 260 report on the financial statements due to outstanding reviewing and reporting work. The delay is a result of resourcing issues within the audit team which has been compounded by a delay in NHS audits because of Covid-19.

           Explained the process that would be followed in the absence of the Auditor’s opinion and report which would entail subject to Audit and Governance scrutiny and Full Council, the Director of Function (Resources)/Section 151 Officer signing the Statement of Accounts without the audit opinion and publishing the Statement on the Council’s website on or before 15 September, 2020 with an explanatory notice regarding the unavailability of the audit opinion and ISA 260 report. It is hoped that the audit opinion and report will be available as soon as possible thereafter. Consequently, additional Audit and Governance Committee and  Full Council meetings will need to be convened to review  the accounts again with the Auditors’ opinion and report and following endorsement by Full Council, they will be signed by the Director of Function (Resources)/Section 151 Officer and published definitively with a notice of completion of audit.

           Highlighted that since the draft accounts were published a small number of changes have been made by the Council’s accounting team together with a small number of amendments to the disclosure note as recommended by the external auditors (Section 3 of the report refers). The most significant amendment (detailed in paragraph 3.1) is in relation to the Pension Fund valuation as a result of a recent judgement in the McCloud case in respect of the provision of protection to early retirees against adjustment to their pension as a result of early retirement. Whilst the change in the valuation of the Pension Fund is reflected in the accounts, the pension liability is adjusted out when the amount to be charged to local taxation is calculated; therefore while there is a resulting change in the value of the Balance Sheet it does not affect the Council’s general reserves position.

           Asked the Committee to support the revised process and make a recommendation to the Council to confirm the acceptance of the 2019/20 Interim Final Statement of Accounts and to endorse the Annual Governance Statement and refer it to Full Council for approval and to be signed by the Leader of the Council and the Chief Executive.  Welsh Government has issued guidance that the accounts closure and approval process should be completed by 30 November, 2020 and based on the progress of the audit to date, he was confident the revised timetable would be met.

 

Mr Ian Howse, Deloitte in clarifying the External Audit position, congratulated the Council’s Finance Service on meeting the original statutory timetable for issuing the draft accounts and confirmed that the delay was due to External Audit not having sufficient resources to be able to complete the audit. All audit work has been held up because of the pandemic hence the extension to the deadline by Welsh Government to 30 November reflecting the fact also that some councils have not yet issued draft accounts. He could not see any reason why the revised deadline could not be met with much of the audit work already completed. External Audit will endeavour to conclude the work as soon as practicably possible and to minimise the impact on the Finance Service’s staff as a result of the audit taking longer than planned.

 

In considering the situation, the Committee’s members together with the Portfolio Member for Finance reiterated their appreciation of the work undertaken by the Finance Service’s staff in succeeding to meet the challenge of issuing the draft accounts in line with the original statutory timescale. The Committee raised the following points on the information presented –

 

           Clarity around the wording at paragraph 3.3.3.2 of the narrative report which states that the balances of the reserves has continued its recent trend of reducing year on year when in fact the 2019/20 end of year balance has increased. The Director of Function (Resources)/Section 151 Officer confirmed that the wording would be amended.

           With reference to the Pension Fund assets, the bulk of the investments is described as not quoted despite the fact that 67% of the investments is shown to be in equities which suggests they are quoted investments. The Director of Function (Resources)/ Section 151 Offices explained that he would clarify the matter with the Actuary, Hymans Robertson LLP from whose report the information was derived.

           The Vice-Chair asked that he be provided with a list of the Council’s assets so that he could be better informed about the Council’s management of assets in terms of ensuring they are achieving the use the Council proposes for them and that assets that can be realised to provide income for the Council are being actively pursued. The Director of Function (Resources)/Section 151 Officer explained that the Council’s Land and Assets group which monitors the Council’s assets is provided with a list of land and assets that are available for disposal  and that pre-pandemic it met on a regular basis to review those assets. As part of the review process, the list is then forwarded to elected members which he understood included the Lay Members. This was affirmed by a member of the Committee with reference to an e-mail from September. The Chief Executive confirmed that elected members are provided with such a list on a monthly basis and that further in response to the Vice-Chair confirming that he had no recollection of seeing the list, she would liaise with the Chair of the Land and Assets Group to confirm its availability for the Committee’s Lay Members.

 

It was resolved –

 

           To recommend to the Full Council that it confirms acceptance of the 2019/20 Interim Final Statement of Accounts as presented in Appendix 1 to the report to Committee

           To endorse the Annual Governance Statement and to refer the document to Full Council for approval and the Leader of the Council and the Chief Executive for signature.

           To note that the Statement of Accounts 2019/20 will return to the Audit and Governance Committee and Full Council and will be signed again by the Director of Function (Resources)/Section 151 Officer once the audit opinion and report have been completed. Any changes arising from the audit review will be reflected in the Statement of Accounts on its return for scrutiny and endorsement.

 

ADDITIONAL ACTIONS-

 

           Director of Function (Resources)/Section 151 Officer to amend/clarify the textual points raised with regard to wording.

           Chief Executive to confirm availability of the assets list for the Committee’s Lay Members with the Chair of the Land and Assets Group.

Supporting documents: