To receive an updated on the 2020-21 Statement of Accounts.
Minutes:
Members were updated on the 2020-21 Statement of Accounts by Graham Cadle, Assistant Director Finance.
· At the last Committee meeting it had been reported that there were two issues outstanding; the first being around Pensions, and the second around infrastructure assets, which was a national issue. Neither of those issues had yet been resolved.
· Graham Cadle advised that the Pension Fund was waiting on the completion of the audit of the Fund, which was administered by the Royal Borough of Windsor and Maidenhead. It was hoped that they were likely to conclude in August. At that point so long as there were no changes to their standing, this element could be signed off. Presently the only assurance that Deloitte, the pension fund auditors, would provide was that its work continued and that it did not expect any changes.
· Graham Cadle explained that the infrastructure issue related to infrastructure assets such as roads. Historically when money had been spent to re-lay the roads it had been added to the Capital Asset Value. At an audit sector meeting it had been raised that this was not appropriate and did not reflect the true value. CIPFA had undertaken a consultation in order to understand what the best approach may be, including an interim arrangement to help Councils close their more immediate accounts. The Council had participated in the consultation but had not yet received the outcomes. Options should there continue to be a delay were, to ask to close the accounts with a gap, undertake work on what it was believed would be required, or continue to wait. Officers proposed continuing to wait and then updating at the next Committee meeting.
· Councillor Harper questioned whether a deadline should be set for making a decision. The Chair proposed that the Committee receive the update at the September meeting and if there was no further progress, a decision be made on how to proceed.
· With regards to the infrastructure issue, Councillor Gee questioned whether the bottom line would be impacted because it was expected that assets where the cost was greater than the accumulated depreciation, but no proceeds were received, were removed. She went on to ask that if this was the case what the extent of derecognition of these assets were. Graham Cadle responded that the bottom line was not impacted. The current process did not truly reflect the value of what a road would be. There was not a material impact on the bottom line in the accounts.
· Councillor Burgess also questioned why the infrastructure matter was now an issue of concern. Stephan Van Der Merwe indicated that the issue related to the actual accounting of the infrastructure and whether or not these were at a granular level to enable Councils to be able to derecognise components within the infrastructure that had been replaced. A more detailed explanation on how the assets were accounted for, if they were recorded at cost or accumulated depreciation, if the Asset Register was accurate, and an estimate of the amount taken out of cost and accumulated depreciation, would be provided to Members outside of the meeting. Councillor Gee requested that the response be included in the Minutes of the meeting.
· In response to a question from Councillor Davies, the assets impacted by the infrastructure issue were clarified.
· In response to a question from Councillor Smith regarding the Pensions element, Stephan Van Der Merwe emphasised that assurance needed to be obtained from the Pension Fund auditor. Assurances had been received from Deloitte with the caveat that work was ongoing. It was likely that this caveat would be removed in September. All Councils that were part of the Pension Fund and the Berkshire Fire and Rescue Service were impacted.
· Councillor Harper asked if there was flexibility over who managed the Pension Fund on behalf of the Council. Graham Cadle commented that whilst there had been issues with delays previously, the Chief Finance Officers were committed to supporting the Pension Fund and improvements were being made. The Chair suggested that any penalties to withdraw from the Pension Fund scheme would be high.
RESOLVED: That the update on the 2020-21 Statement of Accounts be noted.