Agenda item

The Head of Finance introduced the report on the draft financial accounts for the period 1 April 2016 to 31 March 2017 to Members of the Committee.  The report outlined the key statements within the accounts, and issues of interest to provide members with an understanding of the information presented.   

The draft accounts along with supporting working papers had already been provided to the Wales Audit Office w/c 19 June 2017, to facilitate early engagement where possible.  The Section 151 Officer would be signing the Council’s Draft Accounts by the statutory deadline of 30 June 2017.  Any information and comments from Committee Members could, where appropriate, be incorporated into the final signed draft version.  Quality reviews had been undertaken by the Head and Assistant Head of Finance but if Members noticed any errors they were asked to bring them to their attention.

The accounts were subject to audit and would be re-presented to the Committee in September for formal approval and signing following completion of this work.

Members were informed of the four key statements together with supporting notes detailing the financial performance as follows:

·         The Comprehensive Income and Expenditure Statement (CIES): showing the accounting cost in year of providing services in accordance with generally accepted accounting practices.

·         The Movement in Reserves Statement: summarising the Authority’s income and expenditure activity and showing how this was adjusted to arrive at the Authority’s funding, or council tax position, and how surpluses/deficits had been distributed to reserves.

·         The Balance Sheet: showing the value as at 31 March 2017 of the assets and liabilities held and recognised by the Authority.

·         The Cash Flow Statement: showing the movements in cash and cash equivalents of the Authority during the reporting period.

The CIES showed a financial position which looks different to the underspend reported to Cabinet.  This was because the Financial Statements were required to make a number of adjustments under the Code.  Note 28 provided a reconciliation back to the surplus reported to Cabinet.  The Head of Finance’s foreword to the account explained this point and the key adjustments/differences. 

Discussions included the following issues:

·         With regards the £10m Friars Walk Reserve, as this was sold on 9 June would the reserve now become a useable reserve? – Members were informed that a Part 1 Report submitted to Cabinet in July would include details of the Friars Walk deal and implications of the issues. 

·         With regards the £107m reserves how much is generally usable reserves? – Members were advised that there was no reserve not earmarked for a specific purpose.  £11m Invest to Save and £7m Capital Projects could potentially be used but there were implications of doing that. 

·         With regards Contingent Liabilities, is there a percentage involved? – Members were informed that rather than a probability of it happening, to protect the Authority risk-wise, the Head of Finance has to make a judgement.

·         Page 133 refers to the Authority paying 7 elected members £1677 could the word “each” be inserted and then confirmed by payroll? – Members were informed that this would be noted and updated in the accounts.

·         Page 134 – Head of Children and Family Services (staff secondment from Barnardo’s) – Why does it appear and is it relevant? – Members were advised that the Auditors had asked for it to be included but the Officers would check to see if it was still relevant. 

·         Page 134 – “The employer pension contributions in 2016/17 reflect a contribution rate of 12.4% as the additional amount paid to the fund of the difference to 19.2% that was paid as a lump sum payment, therefore it is not reflected as an employer contribution for the individual” – 19.2% to be amended to figures.

·         Page 135 - Why has there been an increase in the Returning Officer’s fees and could there be a note to explain it? – Members were informed this was due to the fact there had been an increase in elections during the period and an explanation would be added to the accounts.

·         A number of corrections were identified in the Draft Accounts and Officers requested that if Members identified any other typographical or formatting errors, they email them to Officers.

·         There was discussion regarding the recommendation last September that a log be kept of any changes and for Members to be shown a copy of those changes.  The copy of the papers in September had been different to those submitted.  Members were advised that the copy for Audit in September 2017 should be the final version.

·         Members stated that they did not understand underspend of cash – The Head of Finance suggested that Members should contact him or the Assistant Head of Finance outside the meeting to clarify any issues and also reminded Members of the Treasury Management training session in September 2017.

Agreed

To note the draft accounts subject to the comments above.