Report by Alison Chubbock, Chief Accountant & Deputy S151 Officer.

Alison Chubbock, the Chief Accountant & Deputy S151 Officer presented the Annual Statement of Accounts 2019-20.

The report reflected what had already been said under the previous agenda item and detailed the changes that had been made to the Accounts since being sent to the Governance & Audit Committee in June 2020, and Members were thanked for all their questions all of which had been responded to.

The Chief Accountant was pleased with the progress this year as it had been a challenge and the audit had been very different with it being remote, but all had worked very well.  As the Committee were not meeting again until December, the report proposed that authority be delegated to the S151 Officer in conjunction with the Chairman of the Governance & Audit Committee to make any changes to the accounts as a result of the audit, and to approve the accounts and the letter of representation.  This would result in everything being completed by the deadline of 30 November 2020. 

Any changes would be sent to Members for comment or questions prior to the accounts being signed off.

Referring to pages 115 and 133 of the agenda pack, Councillor Kybird asked if further clarification could be provided in respect of the figures contained under Note 4 and for the latter, the Inland Revenue penalties for staff allowances.

In response, the Chief Accountant explained that the figures on page 133 was where it had been previously identified that the Council had not been treating the mileage payments correctly for the shared staff between Breckland and South Holland DC.  This had subsequently been raised and a disclosure had been made to HMRC and as such money had been set aside at that time.  This; however, had taken quite some time to resolve with HMRC but no fines had been issued.

Page 115, it was noted that the depreciation and impairment values did vary year on year and for 2019/20 the impairments had been slightly higher than in previous years.

Mr Plaskett appreciated that it was not his decision to make but felt uncomfortable with the recommendations listed in the report where it stated that delegated authority would be given to the S151 Officer and just the Chairman of the Governance & Audit Committee.  In his opinion, he felt that this was not good governance, and all members of the Committee should be included in the delegation. Additionally, on page 83, there was no explanation as to what was included under fees, charges & miscellaneous. 

In terms of the delegation, the Chief Accountant advised that in normal circumstances the Committee would be asked to approve the accounts and in terms of the fees charges and miscellaneous a description could certainly be added as these were in respect of  service charges such as planning fees, licensing, recycling credits, garden waste bins etc.

Mr Plaskett felt that to prevent unnecessary questions in future he would prefer an explanation to be included.

Mark Hodgson referred to the point made by Mr Plaskett about the recommendations.  It was relatively standard for the Committee to approve the accounts subject to any late material audit adjustments that would be delegated to the S151 Officer, and any material adjustments would be reported back to the Committee through an updated Audit Results report and proposed that the wording of the recommendation be amended accordingly.

The Chairman asked Members if they agreed with the proposal to amend the recommendations.  Members were also assured that, as Chairman, he would consult with the Committee prior to using his delegated authority as he would welcome any feedback from Members prior to making the decision.

For clarity Mark Hodgson was asked to repeat the recommendation.

The Committee approves the financial statements subject to any late audit adjustments which would be approved through delegation by the S151 Officer and if material, the Chairman of this Committee. 

Mr Plaskett felt that the Committee needed to see sight of the final results, and he did not hear that in what Mr Hodgson had suggested. 

The Chairman assured Members that the amendment and what he had previously stated would be reflected in the Minutes. 

Councillor Cowen, the Executive Member for Finance & Growth was aware that as a Committee the accounts could not be signed off at this meeting today which, given the pandemic and the situation that had been identified in the previous report was, in his opinion, the appropriate process.  This was not the first time that the Committee had not been able to sign off the accounts and the same delegation had been given to the S151 Officer and the Chairman of the Committee in the past due to further adjustments being required.  In this particular case, he felt that everyone should take heart from what the auditor had said given that in just 2 more weeks the final information would be received.  Ernst & Young had found nothing to suggest that the draft accounts were going to change in any material way and felt that this was a significant benchmark that this Committee should be rightly proud of.  The Finance Team had put these figures together including all the background information for Ernst & Young in these strange and difficult times which he felt should be congratulated. Councillor Cowen understood Mr Plaskett’s particular concern but under the circumstances that everyone was all facing what Members had before them was an excellent report from the external auditors.

Mr Plaskett then drew attention to page 87 of the agenda pack in regard to the capital investment spend for this year of £4.6m.  There was no comment included about what that capital investment had been spent on and he wondered if a note should be included.   The Chief Accountant explained that rather than repeating it twice, this information was always linked to the Cabinet out-turn report that included full details.

On page 98, Mr Plaskett had noticed a significant increase in spend on the Growth & Commercialisation Directorate and asked the Chief Accountant why this had increased by 59% increase over the year.  It was agreed that this information would be sent to Members after the meeting.

On page 102, Mr Plaskett was slightly confused about the purchase and proceeds from short, and long- term investments and the fact that it had changed significantly since 2018/19.  The Chief Accountant explained that the figure was quite misleading as these were each individual investment that the Council put in or out with the actual balance invested being much lower.

On page 115, Mr Plaskett had been surprised that the housing benefit figure was less for this year bearing in mind the additional work that had to be done in respect of homelessness and asked for an explanation.  The Chief Accountant advised that the housing benefit numbers had been going down and had made quite a significant impact on the value but would most probably increase in the 2021 accounts due to the Covid situation.

Referring to page 139, under Note 20,  and bearing in mind that this information would be going into the public domain, there had been a 20% increase to the salary for the Executive Director Strategy & Governance and an increase above inflation for the remaining Executives.  He felt that an explanatory note should be included in the report. Members were informed that in an Election year, the Monitoring Officer would receive an extra payment as the Returning Officer for the Council, and the remainder of the increases were simply due to the annual pay rise of 2% in 2018-19 plus an increment plus the change in pension contributions. These figures were fairly standard and therefore, the Chief Accountant felt that it did not warrant a Note.  

The Vice-Chairman explained that the Returning Officer was an artifact of statute and was paid a separate amount during an Election year.

The recommendations were proposed and seconded as amended, and it was:

RESOLVED that subject to any late audit adjustments which would be approved through delegation by the S151 Officer and if material, the Chairman of this Committee, following consultation with Members of the Governance & Audit Committee:

1.     the final audited Statement of Accounts 2019-20 be approved;

2.     the annual Governance Statement (AGS) 2019-20 be approved; and

3.     the letter of representation 2019-20 be approved.