Local democracy

Agenda item

STATEMENT OF ACCOUNTS 2017/18

 

 

 

 

 

 

The 2017-18 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 Assistant Director, Finance and Procurement will submit Document “J”  which provides an overview of the 2017-18 Statement of Accounts and includes a response to the Council’s Audit Completion Report.

 

Recommended-

 

That the 2017-18 Statement of Accounts be approved and signed by the Chair of the Committee.

 

                                                  (James Hopwood - 01274 432882)

 

 

 

Minutes:

The 2017-18 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 Assistant Director, Finance and Procurement submitted Document “J”  which provided an overview of the 2017-18 Statement of Accounts and included a response to the Council’s Audit Completion Report.

 

It was reported that the accounts had to be produced two months earlier and at the last meeting of the Committee key points of the Statement of Accounts were highlighted such as:

 

·         At 31 March 2018 the Council had £203m of useable reserves and balances of which £37.1m was held to fund capital expenditure; increased slightly due to the way debt repayments were rescheduled.

·         Statement of accounts showed a negative net worth due to the way the valuation of the pension fund was calculated; had to produce a valuation that was an extremely cautious.

·         Pension experts had changed their mind on the valuation of the pension fund and had increased the pension fund deficit by an additional £30 million; page 372 of the papers showed total reserves of 265 million which had changed to 295 million; this did not change the other valuations; cost in the medium financial plan was exactly the same. 

·         The collection fund position was worse than what was expected, this deficit was set aside by using reserves.

·         Page 430 included further details of all the different Boards the Council had a financial relationship in 2017/18; their assets and liabilities were not included in the Council’s accounts.

 

It was reported that

 

·                       There are no matters to bring to Members’ attention in connection with the significant risks and key judgements set out in the 2017-18 Audit Strategy Memorandum.

·                    The Council would seek to finalise the prior year internal audit recommendations relating to IT controls for leavers and contingency planning.

·                    The Council would review the input of journals with no narrative description, to identify whether those identified by external audit were exceptional and whether controls can be strengthened. The Council would review related party transactions earlier in future years.

·                    There were two adjusting misstatements on the main statements. One grant stream was misclassified. One journal was incorrectly allocated against creditors rather than the bad debt provision. There were also another five amendments on the disclosure notes.

 

 

·                    All the changes have been adjusted for in the Statement of Accounts. None of these changes impacted on the Council’s useable balances or reserves.

 

It was reported that producing the accounts two months earlier was challenging as it gave less time to review the accounts, but officers were pleased that the target of producing accounts by the end of July had been met.  Processes would be reviewed to make it better next time including working with actuaries to give information on time and improving the way the accounts were closed down.

 

The Chair congratulated the Finance team for meeting the targets in the production of the accounts. 

 

In response to a Member’s question it was reported that the valuation used for the pension fund was heavily prescribed by a particular model, assumptions looked forward rather than at the current position; the actuary employed models that looked forward, which changed the overall outcome.

 

It was confirmed that the pension deficit related to Bradford and not the whole of the West Yorkshire Pension Fund.

 

In response to a Member’s question it was reported that the valuation of investment properties was undertaken by expert in-house valuers which was reviewed at 31 March 2018.  

 

An explanation was provided to Members on potential contingent losses in relation to certain outstanding matters which could not be estimated accurately or considered sufficiently certain.

 

Resolved-

 

That the 2017-18 Statement of Accounts be approved and signed by the Chair of the Committee.

 

Action:           Assistant Director, Finance and Procurement

 

(The above resolution was agreed after Members had considered the External Audits Audit Completion Report of City of Bradford Metropolitan District Council)                                             

Supporting documents: