Agenda item

The Chief Operating Officer (COO) introduced a report on the Council’s Statement of Accounts for 2018/19.

The draft accounts had been certified by the COO as presenting a true and fair view of the Council’s financial position by the statutory deadline of 30 May 2019 and were now the subject of a detailed audit by the Council’s new external auditors, BDO, who took up the role at the beginning of 2019.

Representatives of BDO were present and explained that there had been a number of challenges in conducting the audit which meant that the final accounts would not be able to be published by the 31 July deadline, although this would not have an impact on the timetable for the accounts being signed off of the individual Council-owned companies.  The challenges included the production of an inaugural set of Group Accounts relating to the Council’s subsidiary companies and discussions had taken place with Council officers regarding the work needed to be undertaken to the Group Accounts, as well as in several other areas, to enable the audit to be concluded.  The COO added that although there was still much to be done, the audit was not expected to lead to the Council’s final accounts being ‘qualified’ in any way.

During the discussions, Members raised a number of issues which included the cessation of Revenue Support Grant funding from 2021, the ongoing pressures on budgets and the consequential impact on the Council’s reserves, the Council’s borrowing arrangements and the 20% increase in complaints from the public during 2018/19 (which was referred to in the Annual Governance Statement).  The BDO representative explained that the audit focussed on compliance with Council policies and accounting practice, value-for-money and ‘reasonableness’ considerations, the impact on the Council’s medium-term financial strategy and the robustness of the arrangements, as opposed to the detail of individual decisions taken by the Council. 

With regard to the reserves and borrowing issues, the COO directed Members to the “Medium Term Financial Strategy and Reserves Policy 2019/20 to 2023/24” report to the Cabinet of 16 July 2019 and the “Treasury Management Annual Report 2018/19” to Assembly of 24 July 2019 for further information on those aspects.  The COO was also pleased to confirm that the problems that had caused the 20% increase in complaints from the public during 2018/19, which primarily related to the domestic waste collection service, had been addressed and the number of complaints received had reduced significantly over the last few months.

In respect of the signing off of the final Statement of Accounts on the completion of BDO’s audit, the Committee requested that the matter be brought back for its consideration rather than delegated to the COO and Chair, as had been proposed in the report.  The Committee also asked that the final papers be circulated as far in advance as possible to allow Members and the Independent Advisor (Audit) (IAA) to fully consider the documentation.  To that end, officers were asked to liaise with BDO regarding the expected audit completion date and, if appropriate, to arrange a special meeting of the Committee to consider the final Accounts prior to the next scheduled meeting on 28 October 2019.

The IAA acknowledged the particular challenges of this year that had led to the delays with the 2018/19 Statement of Accounts and proposed that progress / update reports on some of the documentation that made up the Statement of Accounts could be presented to the Committee during the course of the year, to enable Members to consider matters in more detail.  One of those documents was the Annual Governance Statement and the IAA suggested that the document could benefit from being reviewed to make it more meaningful to a wider audience.

Having regard to the above, the Committee resolved to:

(i)  Approve the draft Statement of Accounts for the year ended 31 March 2019 as appended to the report;

(ii)  Agree that, on the conclusion of BDO’s full audit, the final Statement of Accounts 2018/19 be presented to the Committee for formal approval prior to their publication.