Agenda and minutes

Governance and Audit Committee
Tuesday, 22nd July, 2014 2.00 pm

Venue: Council Chamber - South Kesteven House, St. Peter's Hill, Grantham. NG31 6PZ. View directions

Contact: Jo Toomey 

No. Item




Disclosure of interests


Minutes of the meeting held on 26 June 2014



    The minutes of the meeting held on 26 June 2014 were proposed, seconded and agreed as a correct record.


Financial outturn 2013/14

    Report number HOF277 by the Head of Finance.                          (Enclosure)


    The Strategic Director – Corporate Focus presented report number HOF277 on the revenue and capital outturn 2013/14 for the General Fund and the Housing Revenue Account including commentary on significant variances. A report giving details of the Statement of Accounts, informed by the outturn position, would be presented at the Committee’s next meeting (25 September 2014) following an audit of the statements by the District Auditor.


    The Head of Finance explained that a number of technical accounting adjustments were required to comply with the International Financial Reporting Standards. Those adjustments that had to be shown above the line were removed to enable a direct comparison between the original budget and the final outturn position.


    Members asked questions and clarified statements related to the significant variances listed in the report:


    General Fund (Revenue)


    ·         Committee members requested a clearer explanation on the revaluation of Bourne Corn Exchange; the revaluation was based on two assets: Bourne Corn Exchange and Bourne Community Access Point. The decreased value of the Corn Exchange was shown as a significant variance while the corresponding value attached to the new asset, Bourne Community Access Point, required an appropriate commentary.


    ·         Members were pleased with savings achieved in respect of leisure centre management fees.


    ·         Officers explained that variances against budgeted income for markets were attributed to the mix of casual and regular traders and adverse weather. Councillors were advised that consideration of market provision was part of the work programme for the Resources Policy Development Group.


    ·         Disabled Facilities Grants were classed as revenue expenditure funded by capital. Statute permitted this classification as the grants related to the improvement of an asset even though that asset was not the Council’s.


    ·         Officers were asked to provide a clearer explanation of the £104K decrease in recycling credit income. Councillors felt that the explanation in the report implied there was a direct cost of £104K. Current recycling provision was under review and a new, Lincolnshire-wide contract would go out to market with the new contract to begin from 1 April 2015.


    ·         The £34K variance associated with the helpline under Housing and Neighbourhoods accounted for additional officer time in order to prepare for the service transfer from the Council to the new provider from April 2014.


    ·         The £504K adjustment associated with benefits administration represented recoverable amounts that had become classified as irrecoverable and consequently written-off.


    ·         The variance related to Human Resources related to one-off costs associated with changes to staffing arrangements. Members felt this variance could be explained more clearly.


    ·         There was no correlation between the number of planning applications received and the quantity of work for building control; planning was a statutory function while building control operated in a commercial environment. It was hoped that working with neighbouring authorities would help realise savings enabling the service to achieve a break-even position over the requisite three-year period.


    ·         Functions that could only be carried out by local authority building control officers were funded from a separate account.


    Housing Revenue Account


    ·         Page 9, paragraph 5.3 - correction of  ...  view the full minutes text for item 14.


Draft Annual Governance Statement 2013/14

    Report number HOF280 by the Head of Finance.                          (Enclosure)


    The Head of Finance explained that the draft Annual Governance Statement attached as appendix A to report number HOF280 would form part of the Statement of Accounts (subject to review by External Audit). The purpose of the report was to give an open and transparent assessment of the governance framework and arrangements the Council had in place. It also considered items arising in 2013/14 that needed to form part of the action plan for 2014/15.


    The report was predominantly based on internal audit work throughout the year and internal assurance statements provided quarterly by service areas which comprised an independent assessment of compliance with the governance framework. The final part of the report was the annual audit letter and opinion on the accounts from KPMG.


    The format of the 2013/14 draft Statement had been redesigned of which Members were complimentary. They asked that their congratulation of the Governance and Risk Officer be recorded.


    Members requested the clarification of one point; the ‘internal and external audit assurance’ section referred to a total of 30 reviews while the diagram showing the audit opinion makes reference to 25 reviews. Councillors asked for an addition clarifying that follow-up and advisory reviews were not considered in the formation of the assurance opinion, explaining the different numbers.


Draft Statement of Accounts 2013/14

    Report number HOF281 by the Head of Finance.                          (Enclosure)


    The Committee considered the draft Statement of Accounts 2013/14, which was attached as an appendix to report number HOF281. Committee members were informed that after the meeting the draft Statement would be audited and re-presented for sign-off on 25 September 2014. Any changes made in that period would be summarised and any resulting impact on the audit opinion highlighted. The Council was required to publish its final accounts by 30 September 2014.


    Accounting changes relating to pensions agreed at the Committee’s meeting in March 2014 had been built into the document. The prime statements were the Movement in Reserves Statement, Comprehensive Income and Expenditure Statement, Balance Sheet and Cash Flow Statement. Officers were thanked for their hard work in compiling the Statement of Accounts within a challenging timescale.


    Members were invited to make comments on the draft Statement of Accounts.


    ·         The Statement included an explanation that a number of accounting entries were removed to help people understand the outturn position. Councillors felt this was expressed more clearly in the financial outturn 2013/14 report.


    ·         One Councillor asked about the year-on-year difference for Central Services to the Public on the Comprehensive Income and Expenditure Statement. Officers stated they would provide an answer outside the meeting.


    ·         Year-on-year differences on the Comprehensive Income and Expenditure Statement in relation to local authority housing were attributed to the revaluation of the stock.


    ·         The debt incurred as a result of the self-financing of the Housing Revenue Account was shown on the balance sheet.


    ·         The £4m variation with regard to non-domestic rates was a result of new funding arrangements through local business rate retention.


    ·         A brief breakdown was given of the structure and value of the Council’s investments.


    ·         The statement regarding VAT refunds was part of the CIPFA template however it was not applicable to South Kesteven District Council during 2013/14.


    ·         Page 67, note 22 (Debtors) – correction of a typo under long-term debtors sub-heading required to read: “Local Authority Mortgage Scheme”.


    ·         Page 68, note 24 (Assets held for sale) – the underline below “10” should be removed.


    ·         Injury and damage compensation was on a downward trend.


    ·         Page 83, note 33 (officer remuneration) – the increase in the number of officers between 2012/13 and 2013/14 was due to staff turnover and based on the number of individuals and not the number of roles.


    ·         Grant income was projected to fall year-on-year. Any small one-off grants were not built into the budget but used in-year to avoid the authority becoming reliant on them.


    ·         Pensions had just been subject to a three-year review; contribution rates had increased while benefit rates had decreased as a result of major changes to pensions.


    ·         When asked about the definition of intangible heritage assets, officers explained it was the non-tangible benefits, beyond assets, associating a place with a historical person or event.


    ·         A marginal increase in debt-management costs was attributed to the self-financing of the Housing Revenue Account.


    ·         Disposals shown under the Housing Revenue Account were associated with the Right to Buy.


Close of meeting