Issue - decisions

The committee received a report from the Section 151 Officer regarding the Statement of Accounts 2013/14.

Minor amendments were table - available via: http://democracy.cambridge.gov.uk/documents/b8304/Statement%20of%20Accounts%20-%20tabled%20updates%2025th-Jun-2014%2018.00%20Civic%20Affairs.pdf?T=9.

In response to members’ questions the Section 151 Officer and the Accountant said the following:

       i.          There had been some debate nationally amongst practitioners and auditors in respect of the appropriate basis for business rates appeals provisions. Officers had already spoken to Ernst & Young’s technical team on this issue and believe that the approach taken was consistent with their viewpoint. However, officers understand that the Audit Commission intended to consult with audit firms to ensure that provisions have been calculated on a consistent basis nationally. This was therefore an area where further guidance may emerge as external audits commence and before the statutory deadline for council accounts to be audited at the end of September.

     ii.          The Council continues to be supported in respect of its investment in LBI by its legal advisors, Bevan Brittan.  The statement of accounts reflected their latest briefings and officers would continue to review the position reported in the accounts until they were finally approved in September.

Councillor Cantrill referred to the Movement in Reserves Statement on Page 125 of the agenda and asked about the relationship between the surplus/deficit on the provision of services and ‘cash-backed’ reserves available to the Council to spend. 

The Accountant (Projects and Publications) explained that the surplus on the provision of services was the ‘accounting’ result, comparable to the result for a commercial organisation using International Financial Reporting Standards. The ‘adjustments between accounting basis and funding basis under regulation’ then adjusts this accounting result to get back to the cash backed balances available to the Council to spend in usable reserves as shown at the bottom of the statement. The net transfers to earmarked reserves shown on the Movement in Reserves are the sum of the transfers in and out of earmarked reserves as shown in Note 5 to the accounts.

Councillor Pitt asked about the £1.0m adjustment to pensions referred to in paragraph 7.17 of the covering report and balance on the pensions earmarked reserve as reported in Note 5 (page 141 of the agenda). The Accountant (Projects & Publications) explained that the £1.0m adjustment was the result of changes in the pensions accounting standard and had no overall impact on the Council’s pension liability. It meant that part of the movement in the liability was now analysed and reported differently in the Comprehensive Income and Expenditure Statement. The Section 151 Officer explained that the balance on the pensions earmarked reserve was a prudent fund that the Council had agreed to set up to fund expected increases in the employer pension contribution rate.  In response to Councillor Cantrill he said that increases in employer pension contributions were cost, rather than asset performance led.

Resolved (unanimously) to:

       i.          Note the contents of the draft Statement of Accounts presented (as amended) at Appendix 1 of the officer’s report.

     ii.          Approve the accounting policies and treatments on which they were prepared.