Draft Statement of Accounts (Agenda item 6)
- Meeting of Governance and Audit Committee, Friday, 10th June, 2011 10.00 am (Item 33.)
- View the declarations of interest for item 33.
- View the background to item 33.
Report of the Assistant Director of Finance.
Appendix A to follow.
The Accountancy Manager presented the draft un-audited Accounts and updated the Committee on changes which had been made to take account of the amended Accounts and Audit Regulations 2011.
To continue the Council’s good practice, the draft was presented to the Audit Committee to enable comments and challenge from the Committee Members. It also allowed an update to be provided on the significant changes brought about by the introduction of International Financial Reporting Standards (IFRS). With this in mind, Members were asked if they wanted to continue to receive the draft Statement of Accounts in June in future.
The Accountancy Manager brought to the attention of the Committee the main variances over the previous year and the major changes to the Council’s accounts as a result of the IFRS (see paragraph 3.2.2 of the report).
The Movement in Reserves was a brand new Statement that showed the movement in the year on the different Reserves held by the Council. The bottom line of the Movement in Reserves Comprehensive Income and Expenditure Statement highlighted the balance of where the Council was at as of 31 March 2011. Members were informed that although the Capital Receipts showed a balance of zero, there was still approximately £12m Capital Funding available held in investments rather than in Capital Receipts.
The Committee made a detailed examination of the Statement of Accounts, during which the following matters were discussed:
Corrections to the Explanatory Foreword, first sentence to read “….needing to find an efficiency saving….”, and the penultimate paragraph central should have a capital ‘C’. Still under the Explanatory Foreword, it was explained that the major statutory functions had been marked to follow as these referred to the new management structure with South Holland, the joining of St Edmundsbury Council with ARP and the bus station in Thetford which had not been finalised. In response to a question as to whether the Council was expecting any Material Events after the Reporting Date, Members were informed that nothing was expected at the moment but the reporting date was not until the end of June.
The Assistant Financial Director, who was not in attendance, would be asked to respond to a Mr Kybird who questioned the Post Employment Benefits under the heading Core Financial Statements. The set up of the Notes to the Core Financial Statements was explained.
Mr Kybird felt that the Statement of Accounts was not clear to the reader particularly in relation to the brackets and asked whether explanations could be included on the relevant pages.<2>
In response to a question as to what was meant by non-distributed costs, Members were informed that the figure of £8,158m was the first time it had appeared in the Income and Expenditure Statement as it was a credit from the pension fund based on CPI not RPI.
Another question related to the meaning of a Non-Usable Reserve. It was explained that this Reserve was similar to the Revaluation Reserve which could not be used. however, if the property was sold the monies would be put into Capital Receipts which could then be spent.
Mr Kybird asked if a statement could be included in the explanatory foreword about what had been delivered thus far through the Moving Thetford Forward Board.
There was some discussion about the reconciliation of figures to the Comprehensive Statement which Mr Ludlow felt should be explained in the notes with the breakdown. The Accountancy Manager said that she would look into this.
1) the draft un-audited Statement of Accounts for 2010-11 be noted subject to the amendments/additions referred to above; and
2) the Audit Committee continue to receive the draft un-audited Statement of Accounts in June each year.
RECOMMEND to Council that:
1) the policy to contribute revenue grant income received without conditions but not yet spent into the Revenue Grants Receipts in Advance Reserve be adopted;
2) the New Homes Bonus received in 2011-12 be contributed into the Organisational Development Reserve; and
3) the below budget revenue outturn of £400k be contributed into the Organisational Development Reserve.