Agenda item

To consider the attached report.

Contact Officer:  Hasina.Shah@buckinghamshire.gov.uk

The Accounts and Audit Regulations 2015 required Local Authorities to prepare a Statement of Accounts in accordance with proper accounting practice and were required to be approved and signed by the Council’s Audit & Governance Committee.  Due to Covid-19, the statutory deadline for completion of draft Statement of Accounts had been postponed from 31 May 2020 to 31 August 2020.  The publication of the audited statement had been postponed from 31 July 2020 to 30 November 2020.

Closing the 2019/20 Statement of Accounts and audit had been done under the challenging circumstances of lockdown due to Covid-19.  The draft statement of accounts had been published on the Council’s website on 29 of June, well in advance of the revised statutory deadline.  The public inspection period for the accounts was from 29 June 2020 to 7 August 2020.

Since the draft accounts, the final National Non-Domestic Rates 3 (NNDR) had been completed and this had an impact on outturn along with other minor adjustments.  The adverse impact of £54k had impacted on the General Fund reserves. Any further adjustment above the materiality for reporting threshold of £48k would be circulated to the Audit and Governance Committee members.

The Committee was informed that the audit of the accounts had commenced in June and at the time of writing this report, it had been planned to substantially complete the audit fieldwork followed by closing procedures and final reviews with a view to signing off the audit soon after the completion of public inspection period on 7 August 2020.

In accordance with the International Standard on Auditing (ISA) 260, the External Auditor (EY LLP) had prepared a detailed record of all matters arising from the audit of the Statement of Accounts. This Report is attached as Appendix 2 to the agenda.  As the Auditors opinion on the financial statements had not been confirmed at the time of writing the report it had not been included in the Statement of Accounts.

The following key points on the full draft Statement of Accounts were highlighted:-

RevenueOutturn

In terms of the Financial Outturn the most significant feature was the £1,552k contribution to the Unitary Transition budget.  Excluding this the revenue budget showed an underspend of £322k.  The main other points to note in the outturn were as follows:

·                    Additional Waste contract costs and the authority’s share of the joint procurement costs (£129k).

·                    Staff vacancies in Revenues & Benefits and Customer Services, which included the Head of Service and the Customer Services Manager, offset by the costs in increasing the bad debt provision for housing benefit overpayment recovery (£398k).

·                    Savings in temporary accommodation costs (£150k)

·                    Rephasing of the costs of the South Bucks Country Park project and income now being received for soil importation (£108k). 

·                    Additional costs in Human Resources, Finance and Legal teams as a result of transition work and supporting the insourcing of Bucks County Council’s legal services (£160k).

·                    Additional staffing costs in Planning Services, including agency cover for Head of Service, and reduced planning and building control income (£185k).

·                    Investment income exceeded target mainly due to interest received from Consilio

Usable Reserves: at the end of the year reserves had been as follows -

The movement in the General Reserve was primarily the result of the £1,552k contribution to Unitary Transition costs.  The net movement in Earmarked Reserves mainly related to funding for the Local Plan Development and S106 contributions received.

Capital Outturn

The total capital expenditure for the year had been £8,120k.  The main expenditure had been on the Tatling End housing project (£6553k), Bath Road housing project (£760k), and Housing Grants (£679k).

The Capital programme had utilised £7,360k of internal borrowing as part of an agreed strategy to minimise external borrowing to allow the new Council maximum flexibility on it treasury management decisions.

A number of other matters were also mentioned for the Committee to note:

·                    A significant increase of £518k in the debtor provision for non-recovery of housing benefit overpayment had been made.  This reflected an assessment of the increased risk arising from the economic impact from Covid-19 on housing benefit claimants ability to make repayments.

·                    Financial assets in total had reduced as a result of the strategy to convert financial investments to cash held in bank accounts to ease the transition to the new Council.

·                    The deficit on the Pension Reserve reduced by £6.4m to £22.3m.

·                    The Officer Remuneration Table and Exit Packages reflected the significant changes to the costs of senior management during the year related to the transition to the Buckinghamshire Authority.

·                    The Collection Fund had an overall surplus for the year of £1,022k.  The Council tax collection rate had been 97.1% and 98.7% for Business Rates collection.

·                    Farnham Park Trust, for which the Council was the corporate trustee, was highlighted as a contingent liability due to its operating deficit which would be increased by the effect of Covid-19, making it more likely the Council would need to provide financial support at some stage in the future.

·                    Consilio Property Limited was wholly owned by the Council, and as such its accounts have to be shown consolidated with the Council’s in the section “Group Accounts”.  In 2019/20 it had acquired a second property financed by a loan from the Council of £19.4m. The council had used PWLB borrowing facilities to fund the loans to Consilio.  Consilio increased the overall consolidated balance sheet value by £399k.

The key issues going forward into the new Council were shown in the Annual Governance Statement which had been agreed by the South Bucks Audit Committee.  These were:

Members sought additional information on the statement of accounts and were informed:-

(i)                 that the audit of the Farnham Park Sports Field Charity was ongoing and would be reported to the Committee’s September 2020 meeting.

(ii)               that the Government had announced on 2 July that leisure facilities would be able to apply for some compensation for income lost due to Covid-19.  Information on how this impacted on the Farnham Park Sports Field Charity would be included in the Committee report.

(iii)             that the Revenue Outturn line item in the District Councils’ covering report ‘Payment to BCC Unitary Reserve’ could be changed to more accurately be defined as ‘Payment to BCC on behalf of the Buckinghamshire Council (unitary reserve)’.

Having reviewed the Statement of Accounts 2019/20, and considered the audit progress and findings report from the external auditors (ISA 260 report), it was,

RESOLVED –

(1)               That the audit progress and findings report from the external auditors be noted.

(2)               That the Letter of Representation (ISA 260) be approved.

(3)               That, subject to the audit progress and findings reported to the meeting, the Statement of Accounts for South Bucks District Council for 2019/20 be approved.

(4)               That the Service Director – Corporate Finance (Section 151 Officer), in consultation with the Chairman of the Audit and Governance Committee, be authorised to make any final amendments to the Accounts arising from outstanding audit work prior  to the approval of the accounts by the auditor.

Note: Councillor Smith abstained from voting.