Agenda item

2017-18 Draft un-audited Statement of Accounts (Agenda item 11)

Report of Christine Marshall - Executive Director Commercialisation.

Minutes:

The Chief Accountant presented the draft un-audited Statement of Accounts for 2017-18 and the Annual Governance Statement (AGS) for comments and information.

 

A detailed presentation was provided.

 

It was noted that the Management Accounts had not been included in the Statement as has this had been covered at the earlier Cabinet meeting. 

 

Members were informed that the audit of the accounts commenced on 21 May 2018 and would be reported back to the Governance & Audit Committee meeting in July.

 

The Balance Sheet at 1.6 of the report was highlighted and explained. 

 

Mr Plaskett had many questions to ask as follows:

 

Q -       Page 65 – what was the reason for the significant increase in the Growth &              Commercialisation Directorate budget?

 

A -       There were two reasons for this change; the first was due to the ARP             Enforcement    Service which had grown extensively for 2017-18 and the     second reason the Council’s commercial property had gained additional       rental income.

 

Q -       Also on page 65 – the retained NNDR increase?

 

A -       This increase was due to the Snetterton Biomass Plant which came on-line in             2017-18 and would continue; however, £600k had been set aside in Reserves        for any appeals.

 

Councillor Nairn asked about Necton substation.  Members were informed that this had been included in the budget for the current year but only for part of the year.  The NNDR retention would not be as much as Snetterton.

 

Q -       Page 66 – Revenue Support Grant

 

A -       Revenue Support Grant used to be significantly higher and is reducing and             the year after next it could be nil.

 

Q -       Page 71 – query on the increases and decreases

 

A  -      the signage was incorrect and would be amended accordingly.

 

Q –      Page 74 – typo on 3rd sentence ‘until 2021-21’

 

A -       This would be corrected.

 

Q -       Page 76 – slight confusion between the Corporate Risk Register and the     Strategic Risk Register.

 

A -       The wording would be changed accordingly.

 

Q -       Page 80 – cost of services in relation to the Growth & Commercialisation             Directorate?

 

A -       This was due to the downward revaluation of surplus assets in 2017/18       compared to the upward valuation in       2016/17.  This could be a little            misleading as the valuation basis is ‘highest and best use’ which is not the       the market value.

 

The Chairman said that it was the definition of best use.  The Chief Accountant advised that it was an accountancy treatment.

 

Q -       Page 82 – the column, ‘Unusable Reserves’ for the 16-17 year.

 

A -       This was due to the massive change in pensions valuation.

 

Q -       Page 85 – why were the numbers so big?

 

A -       Due to more short term investments rather than using Money Market Funds.

 

The Chairman pointed out that this was about counting the same pound over and over again as it was counted each time a new short term investment was made.  The Executive Director for Commercialisation & S151 Officer explained that this depended on what how the cash market was performing.

 

Q -       Page 99 – explain the net change between the 2 years.

 

A -       This was due to accounting adjustments such as re-valuations rather than   ‘real’ spend – the accounting value for this year     was different to the      previous year.

 

Q -       Page 100 – Note 4 – employee benefits increased by 18%.

 

A -       Due to Breckland being a shared Council; Breckland Council had     more    employees compared to its partners but their share of the costs are        recharged.

 

Q -       Pages 102/103

 

A -       This was about reversing everything that had not gone through the Council             Tax.  

 

The Chief Accountant said that she would be happy to go through this in more detail with Mr Plaskett after the meeting.

 

Q -       Page 104 – Match Funding

 

A -       Match-Funding was about bids that the Council matched.  A review had been             undertaken during 2017/18 and a decision had been made to take money out         of this pot and put it elsewhere in the Growth & Investment Reserve.

 

Q -       Page 106 – current service costs

 

A -       AC to investigate as this information came from the Council’s Actuaries.

 

Q -       Page 110 – surplus assets £6.7m

 

A -       The Chairman these included the Councils Riverside investment at Thetford.

 

Q -       Page 111 - minor typo – heading 6th column.

 

Q -       Page 116 – under short term investments, the difference between the 2 years         not very good

 

A -       The investments all follow the Treasury Policy with security coming first, there         are better longer term rates available, but many are property backed and we     already have our own investment properties so wouldn’t want to invest further             in this area, so to keep our portfolio diversified. Under the Treasury   Management Policy we are able to invest up to £5m for over one-year.

 

The Chairman pointed out that the Treasury Management Policy was part of the Governance & Audit Committee’s remit.

 

Q -       Page 122 – Revaluation of (gains)/losses on property, plant and equipment

 

A -       The figures were in relation to Riverside

 

Q -       Page 125 – should it read the Executive Manager?

 

A -       This will be amended

 

Q -       Page 141 – Collection Fund - no entries/lack of figures under Income

 

A -       The Collection Fund Revenue Account is estimated compared to actuals.  In             2016/17 there were many NNDR appeals in relation to GP surgeries and the             deficit has to be repaid.  It was noted that NCC received 75% of Council Tax             collected.

 

Other questions/concerns related to the narrative on page 60 where it mentioned the number of planning applications that had been granted; the question asked was should the number of dwellings be added too.

 

Further to the above, the Chairman drew attention to page 59 and felt that the age bands should be displayed/calculated in 5 year segments. Councillor Monument suggested having the age structure chart in 15 year age bands – 0 – 15, 15 – 29 etc and explained the reasons for this suggestion.

 

Councillor Hewett asked if there was a need to disclose the gender pay gap.  In response, the Chief Accountant said that this could be added.  Councillor Hewett also asked, and wanted it minuted, that he found the wording within the top box under mitigation on page 75 very confusing.  Overall, he had found some real issues in terms of what was negative and what was positive.

 

Councillor Hewett referred to page 117 and felt that under ‘Short Term Debtors’ was worth another sentence as there was no real need to show it.

 

The Chairman had noticed that on the Collection Rate had gone down on page 55.  Members were informed that this did fluctuate each year but not by much.  The Chairman asked if there was a set of benchmark figures that could sit beside that.  The Chairman also asked if it was still sensible to remain part of the Business Rate Pool.  The Chief Accountant advised that it had been really good for Breckland thus far but it would be difficult to predict the future. 

 

The Chairman asked if information could be provided in relation to the Business Rate Pool for discussion at a future meeting.

 

The Chief Accountant reported that an objection to the Statement of Accounts had already been received and would be responded to accordingly.

 

Under the Annual Governance Statement, Mr Plaskett had noticed a typographical error on page 164 and also on this page he asked whether the Business Continuity Plan Framework had been completed by the date shown.  Members were informed that this would be investigated.  He further asked why cyber security had not been mentioned under the Auditors Notes.    The Head of Internal Audit explained that this had been picked up in the Annual Report and Opinion to be discussed later on in the agenda.  She had, however, given this a limited assurance but had been very happy with the progress and the risk would be amended to reflect mitigations.   The Executive Director of Commercialisation & S151 Officer advised that this risk should be worded accordingly.  It was pointed out that this issue did not exist at the point of the Statement of Accounts and should be flagged up as a risk not as an audit issue.

 

On pages 168 and 169, the Internal Audit Consortium Manager would be changed to the Head of Internal Audit.

 

Subject to the aforementioned amendments, it was

 

RESOLVED that:

 

1.     the un-audited Statement of Accounts for 2017-18 be noted; and

 

2.     the Annual Governance Statement for 2017-18 be noted.

 

 

 

Supporting documents: