Agenda item

The Director of Finance, Assets and Information Services will submit a report presenting the 2015/16 Statement of Accounts, the sixth set prepared in accordance with International Financial Reporting Standards.

The Director of Finance, Assets and Information Services submitted a report on the 2015/16 Statement of Accounts, the Council’s sixth set of accounts prepared in accordance with International Financial Reporting Standards (IFRS).

The report indicated that the accounts had been submitted to the External Auditor (KPMG) on the afternoon of 30^th June, 2016 in accordance with the statutory deadline.  In addition, it was noted that there was no longer a requirement to submit them for approval to the Council prior to that deadline.  This was primarily to enable additional time to prepare the accounts under the more complex and time consuming IFRS and to place public bodies on a similar reporting footing with the private sector.

The Council would receive the External Auditor’s report on the accounts prior to the statutory deadline of 30^th September, 2016.

The Summary of Accounts together with the Draft Statement of Accounts 2015/16 were appended to the Director’s report.  The report also outlined the main elements of the requirements of the International Financial Reporting Standards.

The Committee noted the significant work undertaken by the Service Director Finance’s Team in relation to the preparation of the Statement of Accounts which was commendable given the restrictions on staffing within the Service.

Reference was then made to the following matters:

·         It was noted that the format of the information provided was prescribed and based on the International Financial Reporting Standards as interpreted by the Code of Practice on Local Authority Accounting as this allowed comparisons to be made between differing local authorities and other bodies.  This was different to the Local Authority’s service and management structures (the management accounts) and the rationale for this was explained.  These could be made available to Members of the Committee if required.  Arising out of the discussion, reference was made, particularly by the Independent Members, to the need for specific training on financial accounting so that Members had a better understanding on how the Statement was prepared and could question and scrutinise better any issues identified.  It was suggested that an awareness/training session be held immediately prior to the December meeting

·         In response to detailed questioning, the Director of Finance, Assets and Information Services explained the rationale behind the ‘carry forward’ figure. It was noted that the ‘surplus’ did not represent spare cash as the majority of in year surplus was as a result of one-off events during the year as well as scheme and project slippage

·         There was a general discussion of the potential impact of Brexit which was still largely unknown

·         Reference was made to the changes in debt recovery processes

·         The Service Director Finance, in response to specific questioning made reference to the Trading Operations and particularly to those units with a greater turnover than £4m or a surplus/deficit greater than £1m. It was accepted that the report had been prepared in the required format but this was not particularly helpful and it was suggested, therefore, that they be accompanied by an explanatory note in future accounts

·         Ms Wild explained the role of the External Auditor in the Statement of Accounts process

·         Reference was made to the need for the Committee to be able to assure itself that the information presented was accurate.  In response, the Service Director Finance stated that this information would be addressed within the forthcoming awareness/training session where an detailed explanation would be given on the different stages of the process and the gateways where integrity checks were made.  The representative of the External Auditor then explained that the Finance Team regularly consulted on the preparation of the accounts and in such circumstances any inaccuracies would be identified as part of that process

·         There was a discussion of the way in which the pension fund liabilities were calculated, managed and dealt with.  A re-evaluation was being undertaken and discussions were continuing with the actuary.  There were currently no issues of major concern

·         It was noted that an update of the reserves position was being undertaken and a report on this would be provided for a future meeting

RESOLVED:-

(i)        that the Director of Finance, Assets and Information Services and Service Director Finance and their respective Teams be thanked for their hard work and dedication in producing the accounts on time and with reduced resources; and

(ii)       that the work that has taken place to prepare the Authority’s Draft 2015/16 Statement of Accounts on an International Financial Reporting Standards basis be noted.