Agenda item

To seek approval of the audited Financial Statements 2024/25 for publication (report of the Director of Finance (Section 151 Officer) enclosed).

Consideration was given to the report of the Director of Finance (Section 151 Officer) which sought the Committee’s approval of the audited Financial Statements 2024/25 for publication.

The Head of Finance Delivery – Technical and Corporate (PSPS) introduced the report and provided the following context:

·         No audit adjustments were required that affected the ledger; all findings were presentational and related to enhanced disclosures in line with KPMG’s recommendations;

·         The financial statements had been published as they stood to meet the agenda deadline, and final checks and balances were still being completed. Delegated authority was requested for the Section 151 Officer, in consultation with the Chairman, to approve any final amendments and sign the Letter of Representation;

·         The Annual Governance Statement had already been approved by the Committee in July 2025;

·         Two amendments were highlighted from the version included in the agenda pack:

o    Related Party Transactions: enhanced disclosure regarding Lincolnshire County Council, including the value of payments and receipts for 2024/25 and comparative figures for 2023/24; and

o    Housing Revenue Account (HRA) rent arrears outlined on page 99 of the report: the allowance for bad debts was incorrectly shown as £77,000 (the increase), whereas the correct figure was £569,000;

·         A further correction was noted relating to HRA funding slippage, which had been misrepresented on the borrowing line. Positive figures were not permitted in this section, and this would be corrected in all relevant places.

Members considered the report and made the following comments:

• Members queried the absence of Quarter 4 performance data on page 8 of the report and asked whether there were any learning points from the red-rated indicators.
  • The Head of Finance Delivery – Technical and Corporate (PSPS) explained that the information was not available when the draft statements were produced; and
  • The Assistant Director – Governance confirmed that Corporate performance was reviewed quarterly by the Senior Leadership Team and reported to Cabinet, with actions taken where required.

• Members queried the increase in loans to Welland Homes.
  • The Head of Finance Delivery – Technical and Corporate (PSPS)  confirmed that the transaction had been approved as part of the capital programme 2024/25.

• Members queried the apparent 20% increase in HRA rent arrears.
  • The Head of Finance Delivery – Technical and Corporate (PSPS) explained that the figure reflected the arrears added during 2024/25. The Assistant Director for Housing had confirmed that write-offs had not been undertaken since January 2024 which contributed to the increase. Recovery processes were in place, and the priority was to agree repayment plans with tenants.

• Members referred to page 21 of the report and queried the £36 million difference in net expenditure between 2023/24 and 2024/25
  • The Head of Finance Delivery – Technical and Corporate (PSPS) explained that the Comprehensive Income and Expenditure Statement reflected total accounting costs, including technical accounting entries such as revaluation adjustments and pension valuations, rather than actual cash expenditure.

• Members referred to page 66 of the report and sought further clarification on debtor balances and the impact of impairment figures.
  • The Head of Finance Delivery – Technical and Corporate (PSPS) confirmed that impairments represented bad debt provisions allocated to each debtor category. Variations between years were due to changes in outstanding debt levels rather than impairment methodology.

Agreed:

1)  That the Financial Statements 2024/25 (Appendix 1) be approved;

2)  That delegation to the Section 151 Officer, in consultation with the Chairman of the Committee, to approve any amendments if required, after the Committee date and prior to the official signing of the Financial Statements, be authorised; and

3)  That delegation to the Section 151 Officer, in consultation with the Chairman of the Committee, to approve the letter of representation on its behalf once received from KPMG, be authorised.