Agenda item

Statement of Accounts including Annual Governance Statement

Minutes:

The Chairman reminded Members that the accounts had been available in draft form on the Council’s website at the end of May. A link had been emailed to Committee Members along with a copy of the draft accounts with the proviso that the Committee would receive details of any changes at the meeting. Members would need to raise any issues they had identified in the draft accounts.  A copy of the final accounts had now been provided and a short adjournment could be facilitated if Members felt they wanted to look through the final accounts in more detail.

 

A Member wished to have noted that she would have preferred to have had an adjournment but was happy to follow the lead of other Members of the Committee.

 

The Director of Finance noted that the draft Statement of Accounts 2018/19 had been published on the website on 31 May 2019. The Statement of Accounts had been updated to reflect the changes identified by the Finance Team and external audit following the completion of the audit. The final Statement of Accounts had to be published by 31 July 2019.  A summary of accounts had also been presented for Committee approval.

 

Further reference was made to the requirement for the accounts to reflect the impact of the McCloud judgement on the pension liability.  The ruling had been made regarding age discrimination arising from the public sector pension scheme transition arrangements relating to judges and firefighters. It was anticipated that there would be implications for the Local Government Pension Scheme. At the time of producing the Statement of Accounts there was uncertainty regarding the amounts and timescales involved in the appeals process. The accounts did not at this time reflect potential implications from the McCloud judgement.

 

In response to a Member’s query about why the Statement of Accounts did not include the accounts from the Council’s Companies, the Committee was informed that the companies’ accounts would not be consolidated into the Council’s Statement of Accounts. The companies would publish their own accounts.  Members were directed to Note 30 of the Statement of Accounts which detailed the Council’s interests in other companies. Further discussion ensued on the nuances of particular posts and whether they were on the Council’s payroll or the respective company payroll.  It was noted that the posts included on the Council’s payroll were recharged to the companies and that funding to the companies was for core service provision.

 

It was also noted that the Companies Committee would scrutinise the Council’s companies’ governance.  This committee was in the process of being created.

 

A Member wished to have recorded his concerns that there did not appear to be a mechanism in place to hold the Companies to account since the Shareholder Committee had been disbanded and no timeline could be provided in respect of when the Companies Committee would be in place.

 

The Cabinet Member for Finance confirmed that the accounts for the companies would be published by the end of December in line with statutory requirements.

 

The external auditor commented that the accounting arrangements for the companies would need to be reviewed, currently, the companies were not of a size that warranted scrutiny by the auditors.

 

Further discussion took place on the need to review the Terms of Reference for the companies, who would carry the burden should the companies fold or would the Council have to underwrite any losses. Members felt the Council would have a legal and moral obligation to underwrite losses.  Reference was made to how governance issues were dealt in respect of companies owned by other local authorities.

 

In response to a query about whether Members had access to the Service Level Agreements for the companies, it was noted that the former Growth Overview and Scrutiny Committee and the Shareholder Committee had reviewed these.

 

The Head of Finance then outlined the minor changes between the draft accounts and the updated Statement of Accounts.  These changes ranged from adjustments in terminology to small realignments.  The Committee was assured that the final Statement of Accounts would replace the draft accounts on the system once signed.  The Committee was reminded that the external auditors must complete their audit and issue the relevant audit opinion to ensure the statutory deadline was met. 

 

The Chairman thanked the auditors and officers for their work and noted that the accounts would be submitted earlier next year.

 

It was proposed, seconded and AGREED:

 

·      The Audit and Governance Committee approved the 2018/19 Statement of Accounts

 

·      The Audit and Governance Committee noted the outcome of the audit work

 

·      The Audit and Governance Committee approved the publication of the summary of accounts on the Council’s website

 

·      The Audit and Governance Committee approved the signing of the letter of representation by management

 

The meeting adjourned between 15:05 and 15:12 for the Accounts to be signed.

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