Meeting documents

To be presented by:

·         Elspeth O’Neill, Financial Accountancy Lead

·         Julie Edwards, Pensions and Investments Manager

with

·         Rachael Martinig, Accountant

·         Patrick McGovern, Senior Finance Officer

Mr Ambrose introduced the report of the unaudited draft statement of the accounts.  The report set out the following recommendation to the Committee:

Recommendation:

To review the Draft Statement of Accounts for Buckinghamshire County Council and Pension Fund for the year ended 31 March 2017 and to note the timing and requirements for completion and authorisation of the draft and final Statement of Accounts.

Mr Ambrose highlighted the following points:

• Revenue budget position reflected an underspend of £6m, which had masked some pressures in portfolios, but had restored balances.  It was confirmed that some underspends were  one off in nature, so these would not be  seen year on year
• Mr Ambrose announced that Mrs E O’Neill, Financial Accountancy Manager would be moving to Transport, Economy and Environment as Finance Director.  Mr Ambrose thanked Mrs O’Neill and her team for their hard work and this was echoed by Members of the Committee.  Mr Ambrose assured the Committee that the effectiveness of the County Council’s financial management and accounting functions will not reduce while appointing Mrs O’Neill’s replacement.

Mrs O’Neill presented the draft statement of accounts and highlighted the following points:

• There had been strong performance this year with a £6.0m underspend added to a planned contribution to the general fund; resulting in an overall £7.1m increase in general fund reserves. When setting the budget for 16/17 the team were aware the reserves had reduced. Therefore as part of the budget setting process £1.1m had been added into the reserves.
• Additions to the accounts this year included ‘Telling the Story’ changes that CIPFA had introduced nationally.  It was also highlighted that Income and Expenditure was now matched to how this was reported to Cabinet Members.
• The report included a new note which related to the Expenditure Funding Analysis note, which provided direct reconciliation from how we present in our management accounts to Cabinet and the actual amounts shown in the accounting statement under the comprehensive income and expenditure statement. This would show a £21m loss however this would  relate to the adjustments 
• There was a significant increase in the Pension Fund liability, showing an increase of £250m.  The main reason for this was a drop in the bond discount rate 3.6% to 2.7%.  It was noted that should the discount rates increase then this effect would be reversed.
• Strong year for the asset growth of the Pension Fund increasing by £88m.
• Triannual review of the Pension Fund in 2016/17 looked at the overall liabilities and employer contributions which needed to be made. As a result of the revaluation contributions had increased from 22.8% to 26.4%, which had been factored into budgets for this and future years.
• The issue relating to Schools Revaluations was also highlighted referring to the Prior Period Error.  The valuers had advised of an error in the reporting of land values held at Academy Schools under 125 year leases. The land element was retained on the balance sheet; however due to the nature of the lease the Council’s valuers had advised that the land should be recorded at notional value only (of £1,000 for each school) as the freehold value of the land should be deferred for the unexpired residual term of the lease. The impact of this error was to reduce the value of Property, Plant & Equipment reported in the balance sheet as at 31 March 2016 by £89.5m. In order to correct this error, the County Council had restated the prior year balance sheet, prepared a third balance sheet and restated the Notes to the Accounts.

The Committee discussed the following points:

• The Committee queried if the figures quoted in the accounts for Bucks Care were based on assumption or whether it was known what the total value of outstanding debts were and how much would be recovered?  Mrs O’Neill confirmed that there had been a detailed review of Bucks Care and in particular outstanding debtors.  A detailed exercise had taken place and those debts included were considered to be recoverable.
• Reference was made to the segmented income and the decrease in Health & Wellbeing, Children’s Services and Education and Skills.  Mrs O’Neill agreed to look into this and report back to the Committee in July 2017

ACTION: Mrs O’Neill

• The Committee asked for an explanation around the £3.3m reserve in Planning and Environment relating to Waste as it was understood that the Energy form Waste Plant was operating to a higher capacity than originally thought.  Mr Ambrose confirmed that this was as the plant had only been in operation for a year with no downtime; this was to build up reserves to plan for the future.  Mr Ambrose also confirmed that this would be reviewed on a yearly basis
• The Committee suggested more clarity be provided in the report on the impact of the waste contract with Business Units and to isolate the impact this was having on the accounts.  Mr Ambrose agreed this was a good suggestion and would take this forward

ACTION - Mr Ambrose

• The Committee discussed the overall underspend and whether this had been anticipated.  Mr Ambrose confirmed that the County Council had not budgeted for a further contribution due to the underspend.  They were forecasting an increasing underspend throughout the year, however this ended up being slightly higher than previously forecast
• The future plans for Bucks Learning Trust were also discussed and Mr Ambrose confirmed that the team were reviewing how some of these services were to be delivered going forward and what the  statutory duties were for the County Council

The Committee also considered the Draft Statement of Accounts for the Pension Fund, which were presented by Mrs J Edwards.

Mrs Edwards highlighted the following points:

• There was an increase in the net assets available for benefits of £474m. It was noted that the number of contributors on the report had reduced as outstanding leavers had now been processed following an administration backlog.  This would also result in the number of contributors decreasing  further as some leavers as at 31 March 2017 remain outstanding
• The results of the valuation were that the past service funding level of the Fund as a whole had increased from 82% to 87% between 31 March 2013 and 31 March 2016. The improvement of the funding position since the previous valuation was mainly due to improved investment returns and employer contributions.

The Chairman thanked Mrs O’Neill for the quality of the reports and wished her well in her new role with TEE.

RESOLVED: The Committee REVIEWED the Draft Statement of Accounts for the Council and Pension Fund for the year ended 31 March 2017 and NOTED the timing and requirements for completion and authorisation of the draft and final Statement of Accounts.