Agenda item

This report presents the draft 2013/2014 Statement of Accounts for approval and submission to the External Auditor.

Discussion:

The Finance Support Manager presented the Council's Statement of Accounts for 2013/2014, which were required under the Accounts and Audit Regulations 2011.

The Statement of Accounts had been circulated to Members within Supplementary Agenda No. 1. It was noted that revisions to a number of the ‘Notes to the Financial Statements’ and ‘Supplementary Financial Statements’ had been circulated in advance of the meeting and a further amendment to the notes relating to ‘Amounts Reported for Resource Allocation Decisions’ was tabled at the meeting, along with a breakdown of the major variances on the Consolidated Income and Expenditure Account, Balance sheet and Collection Fund. The Finance Support Manager reported two typographical errors within the accounts, these being the duplication of a paragraph within the ‘Explanatory Foreword’ and the wrong job title shown in Note 24 ‘Officers’ Remuneration’ for the Deputy Director, Customer Contact, Leisure, Democracy and Governance. The Committee was also advised that further work was required to correct the ‘Movement in Reserves Statement’ on page 40 of the Statement of Accounts.

In his introduction to the Statement of Accounts the Finance Support Manager highlighted to the Committee that:

·        as Medway Norse was at the early stages of development and the value of transactions was not considered material, officers had not completed group accounts, although this would be reviewed in the future.

·        the accounts detailed a revenue surplus for 2013/2014 of £0.267m, which resulted in a contribution towards the General Reserve.

·        the General reserve, as shown in the ‘Movement in Reserves Statement for the Years Ending 31 March 2013 and 31 March 2014’, had reduced by £363,000. An explanation of all the movements on the General Reserve was provided.

·        Note 21 ‘Amounts Reported for Resources Allocation Decisions’ bridged the gap between the Management Accounts to the Comprehensive Income and Expenditure Account.

Members discussed the contents of the Statement of Accounts and officers provided further clarification on:

·        the reported £194.517 million Council obligation in respect of its defined pension benefit plans, which had to be declared in accordance with International Accounting Standard 19,

·        the assets that comprised the Local Government Pension Scheme and the role of the fund managers in maximising returns whilst minimising risk;

·        the presentation of the joint venture with Norse within the Council’s Statement of Accounts, as opposed to a presentation of their own accounts, and the transactions and external contracts won during the first year of operation;

·        the Children and Adults Services Directorate overspend of £1.2 million, which consisted of a £2.5 million overspend for Children’s Care and was largely mitigated by a £2 million underspend on Adult Social Care;

·        the reduction from £55.7 million to £39.3 million in invested funds, which reflected the Council’s policy of funding capital from cashflow and repaying debt;

·        the movement in school’s balances, which was largely attributable to the transfer of balances to converting academies, and the grouping of school balances within the council’s accounts;

·        the sustainability of the council’s various reserves, which included Earmarked Reserves of £29.9 million; and

·        the Income and Expenditure account for the Medway Harbour Authority.

During the discussion on this item, the Committee highlighted a number of typographical errors in the Statement of Accounts. This included details of the Council’s representation on the Chatham Historic Dockyard Trust and Medway Ethnic Minority Forum and that the ‘Statement of Responsibilities’ (page 7 of the accounts) should refer to the position as at 2013. The Finance Support Manager also undertook to review the table at page 79 of the accounts, which detailed the Council’s ‘other employees’ receiving more than £50,000 remuneration for the year.

The Committee requested officers provide a briefing note updating Members on the two schools who had not submitted their three year plans and explaining the four schools forecasting deficits by March 2015.

It was noted that the Statement of Accounts would now be subject to scrutiny by the external auditors and reported back to Members in September. Interested parties also had the right to inspect the accounts and make representations to the External Auditor.

Decisions:

a)     The Audit Committee approved the draft Statement of Accounts for 2013/2014 for submission to the Auditor, subject to the amendments identified at the meeting.

b)     The Audit Committee requested a Briefing Note setting out details of the two schools who had not submitted their three year plans (as set out in the report) and providing further details of the four schools forecasting deficits by March 2015.