Issue - meetings

To present the unaudited Financial Statements including Narrative Report and Draft Annual Governance Statement for the Committee’s review, in line with best practice (report of the Deputy Chief Executive – Corporate Development (S151) enclosed).

Consideration was given to the report of the Deputy Chief Executive – Corporate Development (S151) which presented the unaudited Financial Statements, including Narrative Report and Annual Governance Statement, to be reviewed by the Committee in line with best practice.

The Deputy Chief Finance Officer – Corporate (PSPS) and the Finance Manager – Corporate (PSPS) attended for this item.

The report was introduced by the Deputy Chief Finance Officer – Corporate (PSPS).

• The Unaudited Financial Statements 2022/23 at Appendix A comprised:
  • Narrative Report;
  • Statement of Responsibilities;
  • Core Financial Statements:
    • Comprehensive Income and Expenditure Statement;
    • Movement in Reserves Statement;
    • Balance Sheet; and
    • Cash Flow Statement.
  • Supplementary Financial Statements:
    • Housing Revenue Account Income and Expenditure Statement;
    • Movement on the Housing Revenue Account Statement;
    • Notes to the Housing Revenue Account Statement;
    • Collection Fund Statement;
    • Notes to the Collection Fund Statement; and
    • Group Accounts.
    • Glossary of Terms; and
    • Annual Governance Statement.
• Key changes to the balance sheet were discussed, as outlined at point 2.6 of the covering report, and detailed within Appendix A.
• Regarding the timeline of the statements:
  • Accounts audit regulations required that unaudited accounts be produced by 31 May each year and audited financial statements published by 31 July each year, whilst these deadlines had not been met, an action plan was in place to ensure deadlines would be met in future years;
  • After consideration of the accounts by the Governance and Audit Committee at the current meeting, and following approval from the Section 151 Officer, the accounts would be released on 19 July 2024 for a six-week public consultation period;
  • Guidance was awaited regarding the national audit backlog of historical local authority financial statements. Whilst the previous backstop proposal had been put on hold, there was the possibility that the audit of the 2022/23 accounts would not be undertaken with a potential disclaimer opinion being issued instead.

Members considered the report and made the following comments:

• Members referred to the six-week consultation period and queried whether members of the public had previously requested sight of Councils’ accounts.
  • The Deputy Chief Executive – Corporate Development (S151) confirmed this to be the case for previous authorities she had worked for.

• Members referred to the Notes to the Accounts, item 26 at page 35 of Appendix A, and queried the circumstances under which VAT would not be recoverable.
  • The Deputy Chief Executive – Corporate Development (S151) responded that non-recoverable VAT would only occur where the local authority had breached its ‘de minimis’ limit (a rule that allowed VAT relating to exempt supplies to be recovered up to a specified limit). In such cases, a local authority would be unable to recover the VAT and the amount would be shown as a cost and charged to revenue. It was to be noted that this would be an extreme event as normally all VAT was recoverable and that circumstances were managed to mitigate this risk as far as possible.

·       Members welcomed the reduction in pension liability however it was noted that KPMG had highlighted pensions as an  ...  view the full minutes text for item 15