The 2015-16 Statement of Accounts (SOA) have been externally audited and are now presented to Governance and Audit Committee for approval. The External Auditor (Mazars) has reported their findings in two separate Audit Completion Reports, one for the Council and another for the West Yorkshire Pension Fund. Members are asked to consider these before approving the SOA.

The Director of Finance will submit Document “O” which provides an overview of the 2015-16 Statement of Accounts and includes a response to the Council’s Audit Completion Report.

Recommended-

The 2015-16 Statement of Accounts be approved and signed by the Chair of the Committee.

                                                            (James Hopwood (01274) 432882)

The Appendix to Document “O” is a lengthy document and is therefore being circulated on a restricted basis. It is available on the Committee Database of the Council’s Internet site www.bradford.gov.uk or in Committee Secretariat by contacting Fatima Butt on 01274 432227).

The 2015-16 Statement of Accounts (SOA) had been externally audited and were now presented to Governance and Audit Committee for approval. The External Auditor (Mazars) had reported their findings in two separate Audit Completion Reports, one for the Council and another for the West Yorkshire Pension Fund. Members were asked to consider these before approving the SOA.

The Director of Finance submitted Document “O” which provided an overview of the 2015-16 Statement of Accounts and included a response to the Council’s Audit Completion Report.

It was reported that significant items in the Statement of Accounts included:

·                    At 31 March 2016 the Council’s net worth, the total value of its financial assets less the value of its outstanding liabilities, decreased by £25.6m. This decrease was mainly due to net reductions in the valuations of land and buildings.

·                    Overall at 31 March 2016, the Council also had a small negative net worth of £42.2m, compared to a negative net worth of £16.5m at 31 March 2015.

·                    The Council had a negative net worth mainly due to net pension liabilities of £700m and net liabilities of £134.5m for schools built under the Private Finance Initiative (PFI) that had converted to academies.

·                    A factor that had impacted significantly in past years on the Council’s net worth had been the conversion of schools to academies. This was treated in the SOA as a disposal of assets for nil payment, which reduces the financial assets shown on the balance sheet.

·                    At 31 March 2016 the Council had £19.9m of unallocated reserves available to support budget decisions. However, £6.1m of this had already been used to fund the 2016-17 budget. After retaining £10.8m as a General Fund balance and ring fencing £33.8m of school balances, this left £103m of earmarked reserves to deliver ongoing Council priorities and fund anticipated liabilities.

·                    The SOA also showed the Council had £22.7m (£21m at 31 March 2015) set aside in provisions to meet obligations arising from past events. Mainly these obligations were: termination costs due to planned staffing reductions; refunds of Business Rates due to appeals, and insurance excesses on claims against the Council. 

·                    The Collection Fund Statement showed Council Tax and Business Rate income collected by the Council and its redistribution to itself and other organisations. The redistribution in 2015-16 was set before the start of the financial year and could not be changed. However, Bradford’s actual share of the Council Tax collected was £2.6m higher than budgeted, mainly due to property growth and a lower cost of Council Tax reduction. Bradford’s share of Business Rates collected was £11.7m lower than budgeted, because of refunds arising from appeals. These variations between the total of the redistributions paid out in 2015-16 and the amount of Council Tax and Business Rates collected in the year were factored into the 2016-17 budget.

·                    The Comprehensive Income and Expenditure (CI&E) Statement  showed a deficit on the provision of services of £85.3m in 2015-16. However, this deficit included accounting adjustments, such as valuation changes on land and buildings. After removing accounting adjustments which were not chargeable against Council Tax, services spent £0.8m less than the approved 2015-16 net budget of £400.8m.

·                    £70.4m was invested in capital projects across the district. 26% of this capital investment was funded by internal borrowing, with the remainder funded from grants, revenue contributions and capital receipts.

The External Auditor’s findings in respect of the SOA and agreed amendments were:

·                    There are no matters to bring to Members’ attention in connection with the significant risks and key judgements set out in the 2015-16 Audit Strategy Memorandum.

·                    There was no material misstatement in the draft 2015-16 SOA and no misstatements on the main statements.

·                    There were a small number of adjustments to the disclosure notes.

·                    None of the misstatements impacted on the General Fund balance or usable reserves as at 31 March 2016.

External Audit were thanked for the way they had conducted the audit.

Resolved-

The 2015-16 Statement of Accounts be approved and signed by the Chair of the Committee.

Action:          Director of Finance