Agenda item

Jaclyn Gibson, Chief Finance Officer:

1. presented the draft Statement of Accounts for the financial year which ended 31 March 2022, together with a short summary of the key issues reflected in the statutory financial statements for scrutiny

2. highlighted the summary of key issues within the below areas in the Financial Statements:

·       The Comprehensive Income and Expenditure Statement

·       The Balance Sheet

·       Cross Cutting Key Issues

3. recommended that Audit Committee scrutinise the draft Statement of Accounts

4. invited members questions and comments.

Members discussed the contents of the report in further detail.

NOTE: - Officers wished it to be noted there was a typing error at section 4.2.2 to the report. The correct figure should read 2.668.

Members commented that historical documents would be checked by external auditors. Council figures would be imputed to a standardised document.

Question: It is stated at section 4.3.6 to the report, that rates are no longer compared to the LIBID rates which ceased in December 2021. Are rates being compared using SONIA?

Response: Work was ongoing with Reassure Management providers to assess if SONIA will be used as a benchmark measure for investments.

Comments were received that if we saw the same change next year, liquidity issues could arise if the ratio changed from 1.5 to 1.3. Officers confirmed that exceptional fluctuations had been experienced over the previous two years. This was a result of grant monies received from the Government whereby funds were received in one financial year but not used until the next financial year. Therefore, it appears as a liability as it remains.

Question: What would be the cost of transferring a number of investments to save money instead of using a bank overdraft?

Response: A fluctuation of £7m would ordinarily not be expected. Interests have not been high recently with an amount of variations. The balance sheet showed issues which made comparisons difficult.

Comment: The report states a lone stock loss of 3% and no requirement for a qualified accountant on the Audit Committee.

Response: Lone stock made the Council a Public Interest entity which would necessitate a higher level of external audit. This would facilitate an annual expenditure of approximately £5000 in audit fees. The cost was considered in comparison to the return and the decision was taken to dispose of the stock. The loss of a qualified accountant on the Audit committee would show in next years finances.

Members noted a spelling error on page 58 of the Statement of Accounts 2021/22 under Performance. The correct spelling of the second bullet point should read ‘extra care facility’. Officers noted the comment and advised that it would be changed as part of the audit.

Members noted at page 150 of the Statement of Accounts 2021/22 under Note 38 – Related Parties, the date printed was incorrect. The report incorrectly listed the members appointed for 2022/23, instead of 2021/22. Officers noted the comment and agreed.

Question: Is it a statutory requirement to disclose remuneration to senior employees and does that increase with the rate of inflation?

Response: Disclosure is a statutory requirement and there are limits in place for increases for a number of years.

Question: Under Note 4 at page 104, there was a decrease of 16% in the Council’s share (40%) of the balance of business rates appeals amounting to £0.381m. What is the grand total, after considering the Covid grant, to make up the shortfall?

Response: As time approaches for the next revaluation, the number of outstanding appeals reduces. When provisions are set aside for appeals, an external company is instructed to provide an assessment to determine threats and those that have been settled are removed. Therefore, there would be a slow decrease until the next revaluation whereby it would increase. The revaluation is carried out every three years.

Question: Does the Council still receive £1m bonus for business rates relief?

Response: The previous Secretary of State announced there would be a Consultation over the summer, announced at the AGL conference before his resignation but we do not know whether the bonus for business rates relief would continue. The assumption is that we will loose the resource but nothing has been confirmed. Therefore, financial planning becomes difficult.

RESOLVED that the draft Statement of Accounts be received and comments made by the Committee be noted.