Agenda item

Report of the Chief Finance Officer (to follow)

The Chief Executive submitted a report for Committee approval of the audited Statement of Accounts (SOA) for its publication by 30 September 2017 under the requirement of the Accounts and Audit Regulations 2015. Once approved, the signed Statement would be published on the Council’s website.

Members were informed that material changes to the SOA from the draft version published on 23 June 2017 related to the accounting treatment of a £2.404m capital grant from the Homes and Communities Agency (HCA); netting off the Bank Overdraft from Cash and Cash equivalents in Current Assets; and restating the 2015/16 figures for receivable rents in the Leases note. Other changes to the Statement were explained in the report.

It was understood that the Appointed Auditor intended to issue an unqualified audit opinion of the SOA; an economy, efficiency and effectiveness in use of resources (“Value for Money”) conclusion.

The Committee was advised that at the time of preparing the report and the current version of the SOA, the auditors were still undertaking a limited amount of checks. Due to the audit not having been finalised, it was possible that further changes to the SOA could be required. As a consequence it was recommended that the Chief Finance Officer in consultation with the Chair of the Governance Committee should approve any non-material amendments before recertifying the SOA. In the event that the Chief Finance Officer was of the opinion that the amendments were considered material, the Governance Committee would be reconvened to approve the new SOA.

It was reported that the main adjusted misstatement was in respect of the accounting treatment of a capital grant from the HCA, for the financing of the Primrose Gardens Retirement Living capital project. The £2.404m HCA grant was accrued in the 2016/17 accounts, the cash having been received in early April 2017.

To credit the grant to the Comprehensive Income and Expenditure Statement (CI&ES) in 2016/17, all conditions relating to the grant should have been met by 31 March 2017. As the conditions had not been met, the grant should not have been transferred via the Movement in Reserves Statement to Usable Reserves (Capital Grants Unapplied Reserve). Instead the accounting treatment at present agreed that it should have been credited directly to Balance Sheet account Grants Receipts in Advance - Capital. The HCA grant was still in the Council’s accounts for 2016/17, but it had been moved from Usable Reserves to Long Term Liabilities. Though this had the effect in 2016/17 of reducing both Net Assets and Total Reserves by £2.404m, the HCA grant remains available to finance capital expenditure from 2017/18 onwards.

Although the Council treated Cash and Cash Equivalents as being net of the Bank Overdraft, on the face of the Balance Sheet the Bank Overdraft was shown separately within Current Liabilities. It had subsequently been netted off Cash and Cash Equivalents within Current Assets. This adjustment by £0.834m did not affect Net Assets and Total Reserves.

The current version of the SOA 2016/17 included the AGS approved on 21 June 2017. The revised AGS for approval included a number of changes suggested by the external auditors. If approved, the AGS in the SOA would be replaced by the revised version prior to publication.

RESOLVED;

1.    That the report be noted.

2.    Approval of the Statement of Accounts for 2016/17.

3.    Approval granted for the authorisation of the Chief Executive to sign off the Letter of Representation.

4.    That the AGS included within the SOA be updated to include any changes to the AGS as approved at the meeting.