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 1 June, well in advance of the revised statutory deadline.  The public inspection period for the accounts was from 4 June 2020 to 16 July 2020 and had now ended.

Since the draft accounts, the final National Non-Domestic Rates 3 (NNDR) had been completed and had an impact on outturn along with other minor adjustments.  The adverse impact of £174k had resulted in a reduced contribution to the Earmarked Reserve.  Any further adjustment above the materiality for reporting threshold of £86k will be circulated to the Audit and Governance Committee members.

Members were informed of a couple of typographical errors at page 32 of the statements (Comprehensive Income and Expenditure Statement) as follows:

Halfway down page 32, below the heading ‘Surplus’

·                    Opening General Fund Balance ‘at 31st March 2018’ should be changed to read ‘at 31st March 2019’.

·                    Closing General Fund Balance ‘at 31st March 2019’ should be changed to read ‘at 31st March 2020’.

Bottom of page 32, below the heading ‘Surplus’

·                    Opening General Fund Balance ‘at 31st March 2017’ should be changed to read ‘at 31st March 2018’.

·                    Closing General Fund Balance at ‘31st March 2018’ should be changed to read ‘at 31st March 2019’.

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:-

Significant movement between years

Comprehensive Income and Expenditure Account (CIES): This reported the net cost for the year of all functions for which the Council was responsible and demonstrated how that cost had been financed from general government grants and income from local taxpayers. Total Comprehensive Income and Expenditure for 2019/20 was £43.5m (credit) compared to £26.9m in 2018/19.  The movement of £16.9m was summarised below:

(i)                 Cost of Services had increased by £6.2m resulting from Capital accounting entries £780k, Unitary transition cost £3.5m, increase in Provisions £1m, increase in Waste collection £400k costs, Feasibility cost £700k offset by increase in car parking income of £300k.

(ii)               Financing and Investment Income and Expenditure had decreased by £5.3m resulting from Fair value adjustment of investment property portfolio £4.8m, Fair value adjustment to Property Pooled funds £1.4m offset by increase in investment income £300k and net rental income £500k.

(iii)             Taxation and Non-Specific Grant Income – year-on-year income has increased by £2.6m resulting from accounting adjustment of collection fund account £5.4m offset by decrease in CIL income £1.9m and Government grants £1m.

(iv)             Other Comprehensive Income and Expenditure for the year moved by £25.5m to £42.867 credit in 2019/20.  The main movements were due to IAS 19 Pensions liability reduction adjustment of £15.3m and Revaluation of assets £10.2m due to car parks and leisure centre.

Movement in Reserve Statement (MIRS): was a summary of changes to the Council’s reserve over the course of the year.  These were broken down into two main categories :

·                    Usable reserves that could be used for capital investments or service improvements.  These decreased by £8.6m as they had been used to fund the unitary transition cost of £3.5m and capital programme £11m offset by increase in capital receipt reserve by £4.5m due to sale of asset and contribution to earmarked reserve of £1.8m.

·                    Unusable reserves that were mainly held under the regulatory requirement for specific purposes.  These had increased by £52m mainly due to decrease in pension reserve £16.7m, increase in revaluation reserve £21.2m and capital adjustment account £11m.

Balance Sheet: This statement provided a snapshot of Council’s assets and liabilities.  The Council’s net worth was £296.2m as at 31 March 2020, which represents an increase of £43.5m on the previous financial year. The key movements were:

·                    Long-Term Assets had grown by £26.2m with key components including increases in the fair values of capital assets amounting to £26m, increase in capital investment of £8.7m, reduced investment in long-term deposit balances of £5m and a decrease in Long-Term Debtors of £3.1m due to repayment of debt.

·                    Current Assets had decreased by £1.5m on last year. Key factors – Sale of investment property £3m, Short term investments reduced by £5.6m, investment in property pooled fund £6.4m and an increase in cash £1.5m in line with the strategy to ease the transition to the new Council.

·                    Current Liabilities had fallen by £2.6m due to reduction in Sundry creditors £1.5m and a reduction in Provisions £600k mainly in respect of Business Rates Appeals.

·                    Non-Current Liabilities have fallen by £16m mainly due to a reduction in the pension liability resulting from changes in financial and demographic assumptions determined by the actuary.

Cash Flow Statement: The net increase of £1.5m was in compliance with the strategy to hold cash to ease the transition to the new Council.

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

(a)               that Wycombe District Council had been the only one of the five legacy Councils that had been debt free at vesting day for the new Council.

(b)               that the new household waste and recycling collection contract for the southern part of the Council area did not commence until later in 2020 and, as such, it was not mentioned in these statement of accounts.

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 Wycombe 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: Councillors Smith and Stuchbury abstained from voting.