Agenda item

2019/20 Draft Statement of Accounts

Minutes:

The Committee was reminded that the Council is required to prepare a Statement of Accounts for each financial year and those accounts must be prepared in accordance with statutory timelines and accounting practices set out in the Chartered Institute of Public Finance and Accountancy (CIPFA) 2019/20 Code of Practice on Local Authority Accounting in the UK and any additional CIPFA guidance such as the year end Final Accounts Bulletins.

 

As a result of the Covid-19 pandemic, revised deadlines and timescales had been agreed by Government such that the publication date for final, audited, accounts for Category 1 Councils such as Oldham had moved from 31st July to 30th November 2020 and the requirement for the public inspection period to include the first ten working days of June (for Category 1 Authorities) had been replaced with a requirement that the public inspection period must commence on or before the first working day of September 2020.  So far as Oldham was concerned, the Council had submitted its draft financial statements to the External Auditors on 31st May 2020 with the public inspection period running from 1st June to 10th July 2020.  In order to facilitate the audit process, the Council had made working papers available to the auditors prior to the handover of the Statement of Accounts.  

 

A submitted report introduced the Council’s draft Statement of Accounts 2019/20 which was appended to that report and the following issues were highlighted to the Committee –

·         the overall revenue outturn position for 2019/20 was a surplus of £0.270, an increase on the favourable variance of £0.065m projected at month 9;

·         the year-end variances attributable to each Portfolio area;  

·         Schools balances at 31 March 2020 of £5.487m were offset by the deficit on the Dedicated Schools Grant (DSG) of £4.916m leaving a net balance of £0.571m held within Other Earmarked Reserves;

·         the final Housing Revenue Account (HRA) balance was £21.796m;

·         the balance on the Collection Fund was a surplus of £3.295m;

·         the small reduction in revenue account earmarked reserves of £1.263m to a level of £79.360m, a decrease in other earmarked reserves of £4.431m to a level of £8.504m, and an increase in the General Fund balance of £0.270m to £15.110m which was reflective of the revenue outturn position;

·         expenditure on the Council’s Capital Programme for 2019/20 was £54.383m, an increase on the month 9 forecast expenditure of £52.497m requiring funding allocated to future years to be re-profiled to fully finance the Capital Programme in 2019/20;

·         Capital Receipts in year totalled £9.914m, all of which were used to finance the Capital Programme in year;

·         the significant items in each of the primary financial statements;

·         the preparation of Group Accounts incorporating the Councils two wholly owned companies – the Unity Partnership Ltd. and MioCare Community Interest Company; and

·         the performance of the Finance Team in closing the accounts.

 

The Director of Finance noted that the accounts had been completed in accordance with the original statutory deadline and, while this had been a challenge in current circumstances, this reflected the good performance of the Finance Team.

 

The External Auditor noted that they had now had the draft accounts for 3-4 weeks and were making strong progress in the audit, notwithstanding the challenges presented by current circumstances.  There were no matters or significant issues to raise with the Committee at this time and they were looking to conclude the audit by mid-July in order to report further to the Committee in mid/late July.

 

A Member queried figures provided in Section 9 of the Core Financial Statement and Explanatory Notes that appeared to suggest an increasing number of managers while redundancy tended to affect lower paid staff.  The Director of Finance noted that the figures presented covered both the Council and schools, schools having some degree of discretion in staffing matters with impacted on the figures presented.

 

In response to queries concerning the impact of Covid-19 on the draft accounts, the Committee was advised that there was little impact given the timing of the pandemic.  However, the Committee’s attention was drawn to a grant allocation of £7.6m made by government to the Council in the closing days of March which, while reflected in Reserves, was intended for expenditure in the current financial year.  The real issue for the Council would be in the current financial year and, while it was important for the Council to demonstrate financial resilience, it was difficult to be clear as to the impact on finances given the evolving situation. 

 

Responding to a query as to the presentation of Covid-related business grants in next years accounts, the Director advised current thinking was that most would be regarded as an agency arrangement on behalf of the government and would not be included in the accounts, while the allocation of discretionary grants would be.  It was acknowledged that the financial position for the Council going forward would be challenging, and it could be that in addition to increased funding, the government may introduce some technical changes to help local authorities to spread the cost of Covid response.

 

RESOLVED that the Council’s draft Statement of Accounts 2019/20 be noted.

 

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