Meeting documents

To be presented by Mr R Ambrose, Director of Finance & Procurement.

Mr R Ambrose presented a report on the audited Statement of Accounts. Before giving an overview of the report, Mr Ambrose apologised to Members for the late amendments.

• The following points were noted during discussion and in answer to Members questions:
• Since 31 May, Grant Thornton had completed their audit of Buckinghamshire County Council’s accounts. As a result of the audit, there had been three main adjustments and six recommendations which Members would be asked to consider and make a decision on whether the Committee could agree to endorse the Statement of Accounts.
• A discussion took place where Members raised concerns about accessing reports. Mr Ambrose agreed to ensure that, in future, the correct version of the report was clearly marked with version control.

ACTION: Mr R Ambrose

• It was requested that reports containing significant financial detail are printed for Members for ease of reference during meetings. The Chairman agreed to consider requests for printed reports when appropriate in future.

ACTION: Chairman

• The first adjustment to the Statement of Accounts was a technical accounting adjustment which would have no impact on investment assets. Further detail on the change was included on page 67 (note 19) of the accounts.
• The second adjustment was in relation to Council Tax, short term trade and other receivables. This was detailed on page 77 and 78 (note 24). The line that had changed was the collection fund adjustment line and this was a presentational correction.
• The third adjustment arose from the meeting held on 31 May 2018, at which it was requested that officers look into the high balance of grants over £1m. These grants, including Adult Social Care and Better Care grants, had been moved to page 44 (note 7) and were now correctly reallocated. A Member suggested that it would be more helpful to differentiate the grants capital from the revenue and tie this information to the figures on page 13 relating to revenue financing.
• While auditors were satisfied that the presentation of the accounts was compliant with regulations, Members were welcome to request a change. In respect of the table on page 13, Mr Ambrose agreed to review the presentation to see where improvements could be made for future years.

ACTION: Mr Ambrose

• The Vice-Chairman identified that a correction to a typographical error was required on page 67; the revaluation gains and losses was £9,122 but the amended number on page 84 was £9,110.

ACTION: Ms R Martinig

• The table on page 15 showed a figure of £30,819,000 outturn for Corporate Costs. An in depth discussion took place on what level of detail would be appropriate in the County Council’s final accounts. Mr Ambrose confirmed that there had been an error relating to the figure for earmarked reserves in that there had been an increase of £15m as opposed the decrease that was shown. Mr Ambrose agreed to make the necessary amendments.

ACTION: Mr Ambrose

• A correction was required on page 20 under the heading Unitary Authority. The date should be changed from May 2017 to May 2018.
• A discussion took place with regards to the information on page 26, Events after the Balance Sheet. Mr Ambrose clarified that the Early Redemption figure was the result of a strategy to repay certain LOBO loans and borrow using PWLB loans where it would be more cost-beneficial to do so. Further explanation was provided on the £28.7m early redemption premium; the old LOBO loans were 4.4% interest and the new PWLB loans were 2.5% which would cover the premium costs, over the 50 year lifetime of the new loan.
• The Council had appointed an Independent Treasury Management Advisor (Arlingclose) whose role it was to review and inform these decisions. Arlingclose have approximately 170 Local Authority clients. The Council’s officers meet with Arlingclose regularly for advice along with the Cabinet Member for Resources to discuss strategies and plans.

• Members highlighted that there had been an increase in Investment Property value (page 32 of the Statement of Accounts supplement) from £83.8m in 2017 to £130.8m in 2018. It was explained that the majority of this increase came from the revaluation of land and property owned by Buckinghamshire County Council.
• Two properties that were purchased with PWLB loans raised concerns about the commercial risk in the property sector. Members were assured that the Council was aware of the risks and that, to mitigate these risks, the Council had a diverse portfolio which included industrial and office units. Decisions to acquire investment properties required approval from the Cabinet Member for Resources.
• The title of this section was ‘Comprehensive Income and Expenditure Statement’ and this should be changed to ‘Comprehensive Balance Sheet’.

ACTION: Mr Ambrose

• The concerns about the risks involved in investing in retail properties would be discussed at a future Risk Management Group meeting.

ACTION: Ms Gibb

• An in depth discussion took place regarding the timeliness and quality of the accounts and audit reports. Members discussed the controls that Grant Thornton had put in place to identify errors, the process for quality checking and testing. Members received reassurance that the audit of the Statement of Accounts was completed with adequate controls and in alignment with CIPFA accounting principles and policies.
• Page 113 set out the Significant Audit Risks and findings. These were inherent risks that were not specific to Buckinghamshire County Council.
• Mr Grady confirmed that Grant Thornton was comfortable with the assessments and judgements used by management; and accounting policies had been green rated as appropriate. 

• Mr Grady gave an overview of the addendum report which had been tabled at the meeting and highlighted the following:
• Page 4 of the addendum report showed that £5M of investment properties had not been valued during the period but this would not have an impact on the audit findings as this was an estimate on judgement rather than statement of fact.
• Points 2 and 3, pertaining to liabilities still showing at year end, explained that the errors were extrapolated and would not mislead the reader of the accounts.
• While the external auditors could not provide a percentage against the number of errors, it was explained that a predictive algorithm was used to identify that the four items that were in error were as a result of balances that had rolled over. These were all small in value.
• Mr Ambrose confirmed that a clean-up of roll over balances would be completed.

ACTION: Mr Ambrose

• A Member raised concerns regarding the length of time that the Council had experienced issues with privileged SAP access.

RESOLVED

The Committee NOTED the report