Agenda item

The Service Director Finance will submit a report presenting the Draft 2018/19 Statement of Accounts, the Council’s ninth set of accounts prepared in accordance with International Financial Reporting Standards.

The Committee will also receive a presentation on the main components of the Statement of Accounts.

The Service Director Finance submitted a report on the draft Statement of Accounts 2018/19, the ninth set of accounts prepared in accordance with International Financial Reporting Standards.

The Committee also received a presentation from Mr P Danforth (Strategic Finance Manager) on the background and legislative requirements to be adhered to in the preparation of the Statement of Accounts. 

He made specific reference to the following matters which he put in the context of and, cross referenced to, the current Statement of Accounts:

·         The Statement of Accounts Process including

o   The legislative drivers

o   The International Financial Reporting Standards

o   The changes in the timeframes for preparing the draft and audited accounts

·         The role of this Committee with particular reference to

o   The Authority’s Financial Reporting and Accounting Policies

o   The Risk Management and Governance Arrangements

o   The arrangements in place to identify and tackle Fraud

·         Recent changes affecting the preparation of the Statement of Accounts including

o   Code Changes – the changes to Accounting for Investments and for accounting for revenues from contracts

o   Other significant changes – the introduction of Summary Accounts and Explanatory Notes as well as the introduction of Technical annexes

·         The Statement of Accounts.  The following matters were particularly highlighted

o   The Funding Basis Position (Management Accounts) vs Accounting Basis Position (Financial Accounts)

o   The Management Accounts – Revenue including the Net Revenue Expenditure 2018/19 and Accounting Adjustments

o   The Structure of the Statement of Accounts – the Narrative Report, the four Core Statements, the Disclosure Notes and the Technical Annexes

o   The Financial Accounts including the Movement in Reserves Statement, the Comprehensive Income and Expenditure Statement and the Balance Sheet (Net Worth)

·         Next Steps – following discussion at this meeting further discussions would progress with the External Auditors during the rest of June and July following which the External Auditors would submit there ISO 260 Report on their findings to this Committee and to Council on the 25^th July, 2019

The report and presentation engendered a full and frank discussion during which matters of a general and detailed nature were raised and answers were given to Members questions where appropriate.  The following matters were amongst those raised:

·         In response to questioning Mr G Mills (Grant Thornton) referring to the legislative drivers, timeframes, the Code changes and other changes that had been introduced and commented on the impact this had both on the Statement of Accounts and on the role of the External Auditors in this.  He was satisfied, however, that all processes had been followed and there were no material issues to raise in this respect

·         Arising out of the above, particular reference was made to the new timescales for the production of the Statement of Accounts and the challenges this presented.  It was considered that there were adequate resources both within the Council and the External Auditors to meet this timeframe despite those challenges.  A brief overview was provided of the arrangements in place and the meetings organised to take matters forward

·         The Service Director Finance commented that whilst there appeared to be a £51.5m underspend this was to be utilised within the medium term

·         Referring to the balance sheet, there was a discussion of

o   the implications of the Retirement Benefit Obligation.  It was noted that this situation was common to most local authorities

o   the financial resilience of the Authority particularly in the light of the financial commitment and borrowing in relation to the Town Centre redevelopment.  It was noted, however, that all borrowing was in line with the Council’s previously approved strategy and objectives

·         there was a discussion of

o   the potential impact on fixed term assets and use of reserves.  Such matters would, however, be a key area of focus by the External Auditors and mention would be made within the ISO 260 report

o   the recent benchmarking exercise referred to in the press and the monitoring being undertaken by government of 11 councils use of reserves.  It was noted that whilst Barnsley’s reserves had been reduced, largely as a result of the Town Centre redevelopment, this had been planned and it was thought that the governments focus was primarily on the unplanned use of reserves

·         reference was made to and there was a discussion of  the costs of academisation and also in relation to PFI costs on the authority

·         there was a discussion of Officer Remuneration and Exit Packages, of the ways and time scales in which these were paid and particular reference was made to pre-agreed pension strain costs and how these were calculated

·         the reasons for the planned use of Housing Revenue Account Balances reserves was outlined.  It was noted that there had been a decrease in balances which comprised of the Authority’s total in year surplus of £4.4m net of reserves utilised in the year totalling £8.8m

·         referring to the demographic profile for Barnsley, questions were asked about continuing health inequalities.  Particular reference was made to sickness data particularly when comparing those in employment and the unemployed.  This matter had been previously identified as part of the discussion on the Strategic Risk Register.  It was noted that there were probably some legacy reasons for this but a further report was anticipated from the Director of Public Health which would address such issues

RESOLVED

(i)        that the Service Director Finance and his Team be thanked for their hard work and dedication in producing the accounts in challenging circumstances and restricted timeframe;

(ii)       that the work that has taken place to prepare the Authority’s Draft 2018/19 Statement of Accounts on an International Financial Reporting Standards basis be noted; and

(iii)      that the finalised Statement of Accounts 2018/19 be submitted to the next meeting of the Audit Committee to be held on 22^nd July, 2019.