Meeting documents

Reports to be presented by Richard Schmidt, Elspeth O’Neil and Julie Edwards.  

Members of the finance team attended to present the draft statement of accounts, including the Pension Fund.

·         Richard Schmidt passed on the apologies of Richard Ambrose for this meeting.

·         Richard Schmidt confirmed that this will have been the earliest point in the year that these reports have even been made available. They had been brought forward in line with changes in the national timetable. By the end of June 2015 Richard Ambrose will have signed off the report in preparation for the report to be sent to the Auditors.  (Following the meeting RA signed off the report 10 June 2015.) .

·         The Chairman thanked Richard and the finance team for providing the accounts to the committee at this time.

·         Richard Schmidt also confirmed that the government are intending on bringing forward the account deadline within the next 2 years, so we are now working ahead of this plan which is good practice.

 

A detailed discussion took place regarding the account papers presented. A further report outlining updated figures (balance sheet etc) was distributed at the meeting (these figures had not previously been available before today).

 

Schools Assets

·         There has been a recent change in guidance. Voluntary Controlled schools have been removed and Foundation schools have been added, which has had an implication on the accounts, as outlined on the balance sheet.

·         With regard to academy schools, those academy schools that are on council land, the land remains in our balance sheet but the buildings themselves do not.

 

Valuations of Property, Plant and Equipment

·         Not compliant with the 2014/15 code of practice

·         Rolling programme of asset valuations, under the Code should look at each class of asset in any given year

·         The rolling programme looks at 20% of all classes of assets each year over 5 years, which we believe gives a better reflection

·         CIPFA are about to change the 2015/16 code to reflect this practice

 

Outstanding Information

·         A further account information sheet relating to the third balance sheet was distributed, to include the previous year comparative table.

·         The assessment with foundation schools on the balance sheet, and voluntary controlled schools off the balance sheet was £2.6m less as at 1 April 2013 which is reflected in the reserves.

·         Changes impact on the income & expenditure statement  total.

·         Elspeth O’Neil advised the members that the finance team can circulate a fresh full set of accounts showing the adjustments if required.

·         Richard Schmidt advised that to reflect the adjustment there will be a technical restatement of the previous year, which the auditors are aware of as they have been included on the discussions throughout.

·         Paul Grady from Grant Thornton confirmed that they have been aware of this adjustment and agreed with the treatment. 

 

Financial results for the year

·         The Movement in Reserves statement, records a loss of £42m this year on an accounting basis.

·         A £47m credit, then reflects items charged to income & expenditure statement relating to capital items which are adjusted under statute to get to the surplus or deficit chargeable to Council tax.

·         The overall surplus against the General Fund is £4.5m

·         Of the £4.5m increase, £3m relates to schools.

·         A transfer to the earmarked reserves of £11.5m

·         A decrease of £10m in the general fund

·         General Fund balance is now £21m

·         Richard Schmidt confirmed the level of reserves, are in line with guidance and will continue to be reviewed.

·         Although we are now finding ourselves in a slightly more risky position, it is within acceptable guidelines. 

 

Member Questions / Comments

 

Question 1

·         A member asked, will there be a plan to stop moving funds from the general fund reserve, the current contribution having been £10m.

·         Richard Schmidt confirmed that there may be a reduction in future contributions.

·         The main contribution relates to money being set aside to fund the Energy from Waste Plant.  At the end of this financial year or the beginning of next financial year, payment of £180m is required for the Energy from Waste Plant, the reserves strategy is in place to reduce the amount we have to borrow. Figures can be flexible if need be.

 

Question 2

·         A member had a query around the earmarked reserves. Are these reserves ever looked at in detail, as a huge amount has been earmarked, is this amount balanced or unbalanced?

·         Richard Schmidt confirmed that the reserves do have a review, some are more necessary than others. There is no perfect answer as to whether the balance is correct or not. However having a large reserve does allow us more flexibility.

·         The members agreed however that a careful look at the earmarked reserves would not do any harm.

·         The Chairman suggested that perhaps the details of the reserve funds should go to One Council Board or Cabinet for oversight.

·         Richard Schmidt advised that he is not aware that these figures go to One Council Board however Richard Ambrose does circulate the details to all Directors.

·         Ian Dyson also advised that within the new structure, each Business Unit has a Finance Director who will have regular meetings with RS and RA and so therefore should be able to flag up any issues.

·         The Chairman suggested that a formal review of the reserve fund should still be brought back to this committee at a future meeting.

·         The Chairman thanked the finance team for their comprehensive report and complex, detailed accounts.

 

Pension Fund Accounts – Julie Edwards

 

·         Attention of the committee was drawn to the table of accounts on P 86 of the report.

·         Showed the net assets of the Fund are £2.2bn, an increase of £264m

·         £112m contributions from scheme employers and members

·         £102m benefits/ staff leavers

·         £269m net return on investments

 

Member Questions/Comments

 

Question 1

·         A member thanked the finance team for the report. Referring to the Scheme membership table, the member asked why has the number of contributors gone up?

·         Julie advised that this could be due to staff turnover, possibly more part time staff.

·         The Chairman suggested that it could also be due to compulsory enrolment into the system, which Julie agreed with.

·         The Chairman asked for clarification of this figure to be circulated to the committee following the meeting, which Julie confirmed would do.

 

Following the meeting Julie Edwards circulated an email to the committee on 23^rd June 2015 to provide an explanation for the reason why the number of contributors has gone up. "To advise the number of contributors has increased from 21,693 to 25,112. This is mainly due to the impact of auto-enrolment; auto-enrolment is a government initiative to encourage more people to save for retirement.  Those individuals who had previously opted out of the Pension Fund were auto-enrolled resulting in an increase in Scheme membership."

 

 

Question 2

·         A member asked how often are fund managers reviewed and how can easily can they be changed?

·         Julie advised fund managers’ performance is reviewed every quarter; the fund manager contracts have a one month termination clause.  Appointing new managers is subject to European tendering processes and can be a long process.

 

Recommendation: To review the Statement of Accounts for Buckinghamshire County Council and Pension Fund for the year ended 31 March 2015 and to note the timing and requirements for completion and authorisation of the draft and final Statement of Accounts.

Recommendation was Agreed by all members of the Committee.