Issue - meetings

The committee received a report introduced by the Head of Finance in regarding the Statement of Accounts 2021/2022.

Also presenting were the Deputy Head of Finance, Senior Accountant (Technical and Financial Accounting) and Audit Manager from Ernst & Young (EY).

In response to Members’ questions, the Head of Finance, the Deputy Head of Finance, Senior Accountant (Technical and Financial Accounting) and Audit Manager from Ernst & Young said the following:

      i.         Regarding the timetable for the audit, the outstanding work in the key areas sat outside of the Audit and Finance teams. There were external factors they were waiting on, such as responses from valuers.

    ii.         There had been challenges in response times, but the Council had put in measures to reduce response times, including the hiring of a new Deputy Head of Finance.

   iii.         The Cambridge Investment Partnership (CIP) auditor had concluded their audits of individual components and EY have signed audited accounts.

  iv.         Delays were as a result of waiting for information and responses that external parties are responsible for and had not been significantly affected by the work and day to day activities of the Cambridge City Council’s finance team. Delays in this year’s audit would not cause a knock-on effect for future years. The Council would be able to produce a draft set of accounts on time, in line with the statutory timetable. However, it was widely acknowledged that there were significant challenges facing the external audit sector. The Council would work with EY to ensure that external experts were aware of timetables. There is a deadline of 30 November 2022, and they would work with EY and external bodies to meet this deadline.

    v.         In relation to future risks related to the value of pension fund assets, it was noted the Local Government Pension Scheme (LGPS) operates on a long-term basis. Though there would be a short-term decline, the LGPS planned their investments for the long term so they can pay pensions when they are due to be paid. There had been no indication that there is any problem with LGPS going forward.

  vi.         The Head of Finance stated she would like her thanks noted to former Deputy Head of Finance Jody Etherington for the work done on these accounts.

 vii.         Regarding Pg. 50 recommendation 2.3 of the agenda:

“Delegate to the Chair of the meeting, in consultation with the Opposition Spokes, to approve any amendments to the Statement of Accounts arising from the remaining audit procedures, provided that these do not have a material impact on the Council’s usable reserves or result in any changes to the auditor’s opinion.”

It was confirmed that the Chair of the meeting would consult with the Opposition Spokes as well as the Independent Spokes. Would like to ask the Members if they had any objections to her deferring to her colleagues Cllr Davies, Cllr Hauk and Cllr Porrer. Members had to no objection to this.

viii.         In response to an enquiry about the Councils financial reserves, and how inflation had affected these numbers, stated that it was true that the numbers have less buying power than they did a year ago. They act as the Council’s contingency fund. When the prudent minimum balance of reserves is set, a risk-based calculation is done. This was based on the expenditure budget. The expenditure budget had been inflated, as is done every year. When risks of varying expenditure and probabilities are calculated, this was based on inflated amounts. 

  ix.         Stated that with the Medium-Term Financial Strategy approved in October there was a slight increase in the prudent minimum balance to reflect current level of uncertainty and increased level of risk. Stated that another aspect of reserves is that we hold cash, that backs those reserves, and is invested. That although we cannot make up for inflation rates of ten plus percent, with investment interest rates being at approximately 3-4 percent, Officers were doing everything they could to maintain the value of the cash that backs up the reserves.

Resolved (by 5 votes to 0 – unanimous of those able

to vote) to:

i.       Receive the Audit Results Report presented by EY.

ii.       Approve the Statement of Accounts for the year ended 31 March 2022, subject to any remaining amendments per recommendation iii.

iii.      Delegate to the Chair of the meeting, in consultation with the Opposition Spokes, to approve any amendments to the Statement of Accounts arising from the remaining audit procedures, provided that these do not have a material impact on the Council’s usable reserves or result in any changes to the auditor’s opinion.

iv.      The Chair of the meeting being authorised to sign the Letter of Representation and the Statement of Accounts for the financial year ended 31 March 2022 on behalf of the Council.