Agenda item

Approval of the Draft Statement of Accounts (Agenda Item 13)

Report of the Chief Accountant.


Mr R Barlow, Assistant Director - Governance gave a brief presentation to Members outlining what was covered by the Statement of Accounts.  He confirmed that despite popular misconception accounts had to be backed by supporting evidence and their compilation was governed by Statute and Best Practice Guidance.


He then ran through the sections of the Statement, giving easy to follow explanations of their content, including:


Explanatory Foreword – This gave an opportunity to flush out important headlines and gave a quick view of performance.


Statement of Responsibility and Statement of Policy – These set the scene and explained the discretion used in the treatment of figures.  The Council has a policy on valuation of assets.  Such valuations make a big impact on the report.


Debtors / Creditors – The way these were assessed also had an influence on the figures; for instance, a judgement had to be made on whether debtors would pay or not.


Income and Expenditure Account - Reported on profit and loss showing incomings and outgoings.


Statement of Movement on General Fund Balance – Showed the money that was available for future events.  It was important that it stayed healthy.


Statement of Total Recognised Gains and Losses (STRGL) – Showed if the value of the business had gone up or down.


Balance Sheet – This was a snapshot, only valid for one day of the year (31 March).  It showed all assets and liabilities and by taking one from the other the net worth could be calculated.


The importance of valuations was explained.  They must reflect the latest position.  Most fraud was committed on the basis of evaluations.  When there was a downward movement in value it was known as an impaired value.


Cash Flow Statement – This looked at the actual figures in and out of the bank account.


Notes to the Accounts – The Statement of Accounts was a complex document and notes were used to explain items in greater detail.


Commercial Property Trading Account – This contained a lot of detail because the Council concentrated on trading and because of the need for transparency.


Collection Fund – This showed Council Tax and Business Rates movements and had to be kept as a separate and distinct record.


Annual Governance Statement – This was not based on figures but was a written explanation of how well managed and how well governed the accounts were.  It covered audit, complaints and comments and had been developed to overcome possible fraudulent practice.  It provided transparency and explained the finances, risks and controls and suggested a way forward.


Audit Opinion / Glossary

This included any ‘material’ errors, which in the case of Breckland Council would be £1,000,000.

The Glossary covered the acronyms and abbreviations and explained the terms used.


In summary the Assistant Director - Governance explained that the Statement of Accounts was a very complex document which could become understandable with time and assistance.  It formed an important part of the Council’s business and was not optional.  It needed to be robust and based on sound principles. 


The Chief Accountant then presented a report recommending approval of the Statement of Accounts.


He told Members that the Audit Committee had gone through the accounts page by page and made a number of suggestions which had been put forward for adoption.  He pointed out that balances had improved.


He highlighted one error concerning the amount for STRGL which should read £33,000 and should not be in brackets. (Page 12 of the Agenda Supplement).


The audit process had begun.  Supporting information was being checked and a Governance Report would be produced in September.  Previously this had been circulated to Members by e-mail.  Subject to the auditors’ comments the accounts would be published by the end of September.


A Member of the Labour Group thanked both officers for their excellent presentation.  However, he was only interested in the surpluses and wanted to know what was going to be done with them.  He was concerned that if the unitary recommendation for Local Government was agreed these assets might disappear.  He wanted provision to be made to put money aside for the towns and villages to give something back to the people of Breckland before it was too late.


The Leader of the Council responded to this.  He told Members that the Council was already investing in the community and he cautioned against over reacting.  Whoever took over would look after the money.


The Chairman of the Audit Committee thanked both officers for their thorough answers and recommended approval.


Another Member queried the amount of money spent on the PFI, which he considered to be excessive.  The Chief Accountant explained that the amount was offset by a Government Grant each year and that the figure only replaced what the Council had been paying out on leisure facilities previously.




(a)               to approve the draft statement of accounts;

(b)               to approve the Annual Governance Statement; and

(c)               to note the matters highlighted in section 3 of the report.


Supporting documents: