The Chief Operating Officer submits a report to the Audit and Risk Committee which provides an opportunity for the Committee to consider the Council’s Draft Annual Statement of Accounts for 2020/21, before being brought back to Committee for formal approval.
The Committee is recommended to receive the Draft Annual Statement of Accounts for 2020-21 and the Draft Annual Governance Statement 2020-21 at Appendix A.
The Chief Operating Officer submitted a report to the Committee which provided an opportunity for the Committee to consider the Council’s Draft Annual Statement for Accounts for 2020/21, before being brought back to the Committee for formal approval.
Amy Oliver, Head of Finance, presented the report, and drew Members’ attention to the following:
· The statutory accounts were prepared in accordance with the Code of Practice on Local Authority Accounting in the UK.
· The accounts were produced consistently to the Outturn Report, but did show a very different presentation as the Outturn Report was produced in line with the authority’s budget. However, the financial position in the Statement of Accounts included Premises, Plant and Equipment, and Pensions Liability which would not usually be seen in the Outturn Report, as it did not directly impact on the Council Tax or Business Rate payer.
· In addition, the Annual Governance statement for approval was produced in line with the accordance with Local Code of Corporate Governance CIPFA guide, which showed all controls were in place.
· Draft accounts did not need to be published until the 1st August as there was an extension for 2021, but were published to the original deadline of May 2021, which worked well for audit.
· The front part of the Statement of Accounts was a narrative report which summarised the financial position of the Council and the impact of Covid-19 on the accounts in the year.
· The draft also included core financial statements, and explanatory notes to the accounts.
· There is a material item of expenditure note. Usually reported as 0 (Nil) return, but due to Covid-19 the income for the authority had changed, for example, leisure centre and car parking income had significantly reduced. Also, the collection of rent and council tax had not been as high as budgeted for. Some of the income loss had been replaced by government grants which had been included in the accounts, which compared differently when looking at other year on year financial statements.
· Usable and unusable reserves had increased significantly, mainly due to timing of financial years. For example, business rates and council tax deficits had increased through the impact of Covid-19 which would impact the Collection Fund in 2021/22, however, the Government had provided some compensation in advance in 2020/21. This had been transferred to earmarked reserves.
· The pension deficit had risen to £903millionat March 2021 in and was a figure based on an estimate of benefits likely to be paid out by the pension fund over the next 40-50 years. The tri-annual review would look at the employer’s and employees’ contribution rates and work out how much they need to be to recover that deficit over the longer term. £903million was a large number but statutory overrides meant it did not directly affect the financial position of the authority, and would be monitored to see how changes to the employer’s rate would impact on the financial strategy going forward.
· Other key notes which usually gained attention from external stakeholders ... view the full minutes text for item 11