Agenda item

2020/21 Annual Statement of Accounts

Minutes:

 

Consideration was given to a report presenting the 2020/21 Draft Statement of Accounts which was attached to the report at Appendix 1.

 

The Committee was advised that the Council had submitted its draft financial statements to the External Auditors, Mazars LLP, on 6th June 2021 which had been a little later than anticipated due to the impact of the pandemic.  To facilitate the audit process, the Council had made working papers available to the auditors prior to the handover of the Statement of Accounts.  The public inspection had commenced on 17th June 2021 and had concluded on 28th July 2021.  No objections were received.

 

The Committee was reminded that the draft Statement of Accounts had been presented, with a covering report outlining key issues to the meeting of the Committee on 29th June 2021.  This had provided members of the Audit Committee the opportunity to consider the key issues and ask officers and the External Auditor any relevant questions.  All matters that had been raised had been addressed at that meeting to the satisfaction of the Committee.

 

The reported highlighted the following:

 

           The overall revenue outturn position for 2020/21 was a surplus of £2.153m

           The year-end variances that are attributable to each Portfolio

           The level of Grants received in relation to the COVID-19 Pandemic

           School balances as 31st March 2021 were £9.306m

           The Dedicated Schools Grant (DSG) deficit was £3.560m which is now held in an unusable reserve rather than being netted off the Schools balances (as presented in the accounts in previous years)

           The final Housing Revenue Account (HRA) balance was £21.370m

           The balance on the Collection Fund was a deficit of £27.213m

           The revenue account earmarked reserves at £113.512m, other earmarked reserves at £29.452m (Revenue Grant Reserves of £20.145m plus School Balances as above) and an increase in the General Fund balance of £2.153m to £17.263m, reflective of the revenue outturn position

           Expenditure on the Council’s Capital Programme for 2020/21 was £73.22m which is an increase on the month 9 forecast expenditure of £71.012m.  The increase in expenditure required funding allocated to future years to be re-profiled to fully finance the Capital Programme in 2020/21

           The significant items in each of the primary financial statements

           The preparation of Group Accounts incorporating the Council’s two wholly owned companies – the Unity Partnership Ltd. And MioCare Community Interest Company

           The Annual Governance Statement

           The performance of the Finance Team in closing the accounts.

 

It was reported that the audit of the Accounts was now substantially complete with a few significant outstanding items, which were outlined within the report, along with some other small items that needed to be completed.

 

As the outstanding matters had not been resolved, The External Auditor was content with a recommendation that the Committee considered the accounts but delegated the final approval of the Council’s Statement of Accounts, on resolution of the outstanding items, to the Vice-Chair of the Audit Committee having regard to the advice of the Director of Finance and the External Auditor.  Also attached to the report at Appendix 2 were details of the changes to date, to the Draft Statement of Accounts.  The Committee was requested to consider the Accounts and the changes made.

 

It was further reported that the audit process could not be fully finalised until all remaining issues were resolved and the Whole of Government Accounts (WGA) audit was completed, and that the WGA audit could not be undertaken yet and was programmed for later in the year.  Mazars LLP was required to provide the Council with an Annual Audit Completion Report (as referred to in item 7).  The Committee was advised that no material errors had been identified for the 12th successive year.

 

The Committee was reminded that this was the third year that the Council’s audit had been undertaken by Mazars LLP, and that due to the Covid-19 pandemic, extensive testing had been conducted, including the examination of samples and more in-depth review of processes.  It was reported that the overall audit process, to date, had been positive and despite the additional testing, the ACR had resulted in one low priority ranking recommendation regarding Housing Benefit reconciliations (as referred to in item 7).

 

In addition to the Statement of Accounts, the Committee was required to note the Management Letter of Representation which was attached to the report at Appendix 3.  This was a formal letter prepared by the External Auditor but signed on behalf of the Council by the Director of Finance.  The letter attested to the accuracy of the financial statements, which the Council had submitted to the auditors for their analysis.  The Management Letter of Representation enabled the Council to declare in writing the Statement of Accounts and other presentation to the Auditors were sufficient and appropriate and without omission of material facts, to the best of management knowledge.  This letter was used by the Auditor as part of the audit evidence.

 

In response to queries from Members, it was confirmed that:

 

           There will be Code changes implemented for the closure of the accounts for 2021/22 but the Council does not see theses Code changes as having a significant impact on the accounts.

           As part of the ongoing development of the Audit Committee, training is being arranged by the Council external advisors and constitutional services are arranging an appropriate date.

 

 

 

 

RESOLVED – That the Audit Committee:

 

1.         Note the Council’s Statement of Accounts for 2020/21; and

2.         Note the Management Letter of Representation; and

3.         Delegate the approval of the Council’s Statement of Accounts to the Vice-Chair of the Audit Committee having regard to the advice of the Director of Finance and the External Auditor.

 

Supporting documents: