To receive a summary of key changes in the Statement of Accounts for 2013/14 and internal procedures for producing the Statement of Accounts.

The Committee considered a report by the Chief Finance Officer which summarised key changes in the Statement of Accounts for 2013/14 and internal procedures for producing the Statement of Accounts.

The Financial Controller introduced the report; Members noting that under the Accounts and Audit Regulations 2011 the Council’s accounts were required to present a ‘true and fair’ view of the financial position of the Council and comply with ‘proper accounting practices’.  The Local Government Act 2003 specified the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice, which was issued annually, as representing the proper accounting practice for that purpose.

The Committee further noted that the 2013/14 Code incorporated updates originally issued as mid year updates to the 2012/13 Code.  The two main areas of change related to accounting for the Housing Revenue Account (HRA) under self-financing and changes in accounting for Carbon Reduction Commitments (CRC).  There were also a number of minor technical updates to the 2013/14 Code and two changes of note in the current financial year relating to the following:

·         post-employment benefits and International Accounting Standard (IAS) 19

·         accounting requirements in respect of National Non-Domestic Rates (NNDR) following the move to localisation.

The Financial Controller informed the meeting that the 2013/14 Code incorporated changes made to IAS 19 in 2011; the most notable of these changes being the introduction of new classes of components of defined pension benefits costs to be recognised in the financial statements and new recognition criteria for termination benefits.    The figures for the 2012/13 year would be restated although the changes would be presentational and there would be no material impact on the financial statements.

The meeting was also advised that National Non Domestic Rates (NNDR) would be accounted for through the Collection Fund in a manner similar to Council Tax.  As councils retained a share of the business rate income there would be an annual surplus/deficit on the Collection Fund which would be distributed/recovered in the subsequent year’s budget.  These changes reflected the new regime applicable from 1 April 2013 and so no restatement of prior year balances would be required.

The meeting noted that, surprisingly, there had been no clarification included within the Code on how schools should be treated within the Council’s books.  Whilst CIPFA had stated in its exposure draft that only community schools should be included in the Council’s balance sheet the Department for Education had raised issues with this.  However, no clarification had been issued in the Code and CIPFA had asked councils to continue as before.

The Committee was reminded that, at its meeting on 24 June 2013 (minute A/13/55 refers), a presentation had taken place on the key figures in the accounting statements.  All members of the Council had been invited to attend in order to encourage scrutiny and discussion.  The use of a presentation rather than a report had also allowed Finance staff significantly more time to focus on quality assurance work in June and minimise the work needed by the Finance team and the external auditors during July to September.  In view of the positive feedback following the presentation it was proposed to include a presentation at the June 2014 meeting.  The Committee concurred with this proposal.

A Member referred to the discussion at the last meeting (minute A/13/67 refers) regarding the submission of a report on matters of interest on employee pensions arising from meetings of the local Pension Fund Committee.  It was noted that the first of regular six monthly reports on this topic was scheduled to go before the General Purposes Committee, as the body which dealt with employee issues, in May but the Member suggested that a copy of the report should also be submitted to the Audit Committee mindful that staff represented the Council’s biggest cost.  The meeting concurred with this suggestion.

NOTED

the key changes in the Statement of Accounts for 2013/14 and internal procedures for producing the Statement of Accounts.

RESOLVED

1a        that an interactive presentation on the unaudited accounts for 2013/14 be made to the Audit Committee at its meeting in June 2014;

1b       that all members of the Council be invited to attend the above presentation;

2          that a copy of the update report submitted to the General Purposes Committee on developments arising from meetings of the local Pension Fund Committee be submitted to the Audit Committee to note.