Issue - meetings

The Committee received a report from the Chief Financial Officer and S151 Officer. The Committee were introduced to Matthew Crosby as Interim Deputy Chief Financial Officer.

In terms of the 2023/24 accounts there were no significant changes to the accounting principles for the accounts. The draft accounts for 2023/24 could be drafted based on the 2022/23 accounts. Guidance on their publication would need to be considered. The external auditors, Ernest & Young (EY) were thinking how this would work in practice.

Members were informed that the rent regulations issues that had been identified in the Housing Revenue Account (HRA) were likely to have an impact on both the 2022/23 and 2023/24 accounts. EY had been briefed on the issues but it was unclear what impact this would have. Furthermore, this may have an impact on the accounts when they come to be audited.

In response to questions the Chief Financial Officer stated:

i.               EY would attend future meetings of the committee when there was progress on the signing off of the accounts. An audit plan was in the process of being produced by EY and this would also be presented to Committee.

ii.             The 2022/23 accounts had been published on the Council’s website since June 2023 and were still unaudited.

iii.            The most recent set of contracts the Council had with the external auditors were reduced in terms of the fees being charged in comparison with the previous contract. This had caused some issues including a number of external auditors not being able to recruit and retain staff in order to complete audits. In addition, a number of local authorities had struggled to recruit and retain staff within their finance teams and produce accounts in line with statutory timeframes, fortunately that was not the case at the Council.

iv.           Local authority accounts had become more complex to complete and audit. This was another reason for a slower rate of accounts being signed off.

v.             The government was aware of the issues and it was anticipated that proposals would be consulted on shortly to re-set the accounting process.

vi.           The draft accounts had been published on the Council’s website and there was a statement published with this to outline that the accounts were in draft form.

vii.          Each year the Council received an actuarial report on the numbers that needed to go into the accounts and were provided by an expert. The pension liability was usually the largest figure in the accounts. This was an unusable reserve and did not impact the income and expenditure account. The only impact was when the triennial actuary report was produced which could impact the rate of pension contributions.

viii.        The draft accounts on the website had a statutory notice, which made clear that the accounts had not been audited.

ix.           There had been communication from residents with regards to any concerns over the accounts that had been published on the website, or that they had not yet been audited.

x.             This was the first year that the pensions had been an asset rather than a liability, although it was a small asset in terms of the figures.

xi.           Thanks were given to the Chief Financial Officer and S151 Officer for her work and the committee wished her well for the future.

RESOLVED (4 votes for, 0 against):

        i.       To note that there are no significant changes to accounting policies anticipated for the 2023-24 Statement of Accounts.

      ii.        To note and approve the proposed critical judgements and major sources of estimation uncertainty in respect of the 2023-24 Statement of Accounts.

iii. To note the position regarding the outstanding audit of the 2022-23 Statement of Accounts and the impact of the delay in concluding audit procedures on production of the 2023-24 Statement of Accounts.

ACTIONS:

i.    The Committee agreed that a letter be written to Michael Gove outlining the Council’s concerns over the delays in the auditing of the statement of accounts.