Agenda item

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 2023/24 at Appendix A followed the same structure and layout as outlined at agenda item 4 above, with information relevant to the period concerned. The following points were made:

• Key changes to the balance sheet were discussed, as outlined at point 2.5 of the covering report, and detailed within Appendix A;
• Members were referred to page 19 of Appendix A regarding movements from 2022/2023 to 2023/2024 and were advised that where transfer of services across directorates had occurred, the 2022/2023 comparators had been restated;

• Although the accounts were not published in line with the deadlines, they had been published earlier than previous accounts, and the following actions were in place to ensure that the 31 May deadline would be met for the 2024/25 accounts:
  • The valuation date had been brought forward to 31 December 2024 and discussions were underway with KPMG regarding the council’s assurance that the valuation of its assets be ‘materially correct’ as at 31 March 2025;
  • System reports were being developed to extract required information rather than using a manual process;
  • Reappropriation of tasks, earlier training and preparation within the whole finance team;
    • The Deputy Chief Executive – Corporate Development (S151) added that the team had been encouraged to undertake training across all relevant area of responsibility, such as year-end transactions, treasury and capital. This approach promoted the checking and scrutiny of work throughout the year and therefore offered a potential seamless completion at year-end.
  • The accounts would be published on the SHDC website on 19 July 2024 which marked the commencement of the six-week public consultation process;
  • KPMG’s audit of the accounts would commence in September 2024 and discussions had commenced with KPMG to ensure that the audit could be completed as quickly as possible; the ‘audited accounts’ would then be considered by the  Governance and Audit Committee.

Members considered the report and made the following comments:

• Members welcomed the reported position.

• Members queried whether any movement to 31 May and 31 July deadlines were anticipated.

o   The Deputy Chief Finance Officer – Corporate (PSPS) was not aware of any such movement.

• Following the appointment of the current Portfolio Holder for Finance, members welcomed the instigation of new guidelines and procedures which had aligned information requirements from SHDC and PSPS.

Nonetheless, in this regard members required a distinction be drawn between ‘adjustments’ and ‘errors’, with the latter requiring an explanatory narrative.

• Members were pleased that the PSPS Finance Team was fully staffed at a senior level.
  • The Deputy Chief Executive – Corporate Development confirmed that two vacancies were to be filled in August 2024 and that experienced interim cover had been provided.

• Members referred to expenditure which had resulted from an ‘uninsured event’ and queried if this related to an event that should have been insured and whether funding was reserved for such eventualities.
  • The Deputy Chief Executive – Corporate Development (S151) confirmed that the spend related to flooding at the swimming pool which was uninsurable however an insured element was recovered. A reserve provision for such eventualities was to be explored.

• Members queried whether Key Person insurance applied to named individuals in the hierarchy of the council.
  • The Deputy Chief Executive – Corporate Development (S151) responded that professional indemnity insurance was held for certain roles across the partnership and that the council’s insurance risk advisers would be asked to provide commentary on the matter.

AGREED:

That after consideration by the Governance and Audit Committee, the Unaudited Financial Statements 2023/24 including the Annual Governance Statement (Appendix A), be noted.