Agenda item

To consider the Statement of Accounts 2020-21.

The Committee received the Statement of Accounts 2020-21.

During the discussion of this item, the following points were made:

·       In response to a question from Councillor Davies regarding infrastructure assets, the Assistant Director Finance commented that CIPFA had introduced an interim arrangement and the Council had worked with EY to meet these.  The full long-term requirement was still awaited.  Once in place the Council would work to meet them. Helen Thompson added that the long-term solution remained unclear.  Whilst EY had recommended that the Council considered the accounting records, there was a balance between doing that and spending time on looking backwards.  It had been agreed that from this point onwards that the Council would keep more specific records in relation to the expenditure on infrastructure assets incurred.

·       Councillor Gee thanked Officers for following up why the Pension Fund had not signed off its accounts.  She commented that the Committee had been asking about the issue for some time and that it seemed that the issue had arisen because the Royal Borough of Windsor and Maidenhead Council had not signed off its accounts.  Councillor Gee expressed concern about this, and questioned whether this was a risk which had not been taken into account.  Helen Thompson stated that the pension fund accounts were largely completed but could not be completed because they were linked with the accounts of the administering body, RBWM.  Officers had been aware of this.  The Deputy Chief Executive referred to the caveated wording provided by Deloitte.  He understood that Deloitte would be able to provide the required wording even if RBWM’s accounts remained unsigned.  Councillor Gee was of the view that there was still an outstanding risk.

·       Mike Drake commented that the narrative was out of date in parts and also some of the comments in some of the notes.  In addition, there were a number of rounding differences.  Helen Thompson indicated that officers were aware of the casting errors, and these were being looked at.  The Assistant Director Finance commented that an explanatory paragraph would be added to the narrative.

·       Mike Drake went on to state that in some of the notes, figures were provided for the Council but not for the Groups.  Helen Thompson indicated that the CIPFA guidance suggested that certain of the notes did not require the Groups as well as the single entity.  However, the notes would be rechecked.

·       Mike Drake sought clarification regarding the reference to unfunded pensions.  The Chief Accountant explained that with regards to the pension, what was considered in terms of funded and unfunded, was the value of the future liabilities versus the assets of the pension fund.  The Council would make an annual contribution, as part of the budget, towards the pension deficit.   Officers agreed to come back with further details around the reference to the unfunded pension element.

·       Mike Drake suggested that a definition of the comprehensive income and expenditure statement be included in the list of definitions.  The Assistant Director Finance indicated that this could be added.

·       The Chair commented that limited progress had been made with bank reconciliations, and sought assurance that those controls would be put back in place and would be carried out regularly.  The Assistant Director Finance explained that this would be carried out more regularly so should not be an issue going forwards.  Councillor Gee added that there was a difference which was adjusted for of £0.62million.  She questioned the impact of this and whether income would be impacted or whether it represented a move between the balance sheets.  The Chief Accountant explained that part of the difference related to where the Council had taken deposits from tenants for the Town Centre development.  Previously the income had not been recognised in the Council’s ledger because it was being held on behalf of the tenant.  However, following further work with the auditors it had been agreed that this should be recognised in the accounts, so an adjustment to cash balances and creditors had been made. There had been no impact on income or the bottom line.

·       Councillor Gee requested written confirmation that the finance team was adequately resourced.  The Assistant Director Finance commented that additional resources were now in place and staff were being trained.

·       Councillor Gee stated that she had attended the RBWM Pension Committee that day and that the next valuation had been received and there had been some adjustments. She questioned whether this needed to be reflected in the accounts.  The Assistant Director Finance responded that the Council had not been formally issued with the updated pension position, but once this was received any necessary adjustments or reflections could be made.  Helen Thompson indicated that the issue had been known but not how significant it might be or not be in terms of the change in the triennial valuation.  There needed to be consistency in the way it was treated.

·       Mike Drake asked about the collection fund.  The Assistant Director Finance referred to the impact of Covid and the increase in the number of grants given.  A grant had been given but in accounting terms sat in separate reserves.

·       Councillor Smith referred to the comprehensive income statement and the difference in the 2019/20 and 2020/21 figures for Adult Social Care and questioned the reason behind this.  The Chief Accountant referred to increased expenditure as a result of Covid and Covid grants, and also increased demand overall.  Officers could undertake further analysis and feed back.  The Deputy Chief Executive added that the gross figures for Corporate Services and Children Services had reduced.  There had been some restructuring where a number of services had previously been considered under a different category.  Councillor Smith suggested that this could be clarified within the accounts.  Mike Drake suggested that it be covered in the narrative report should the changes not be material.   Helen Thompson added that 2019/20 had been restated.  A significant number of grants around Adult Social Care had been received.

·       Councillor Smith highlighted some inconsistencies in the presentation of figures.

·       Councillor Smith questioned how unusable reserves had increased by 33% in a year and was informed that this related to increases in property valuations.  It was noted that there was a note which referred to the breakdown of unusable reserves.  Officers agreed to provide further analysis.

·       Mike Drake asked about the entries posted for infrastructure assets.  Officers commented that no changes had to be made in terms of the accounting journals.  Helen Thompson indicated that the specific entries were included within the accounts in the note around new infrastructure assets.  Mike Drake commented that further explanation would be helpful.

·       Councillor Gee proposed that recommendation 1 be amended to read ‘latest draft statement of accounts.’  This was accepted.  She also stated that there a lot of updates to be made and questioned whether the Committee should approve the delegation.  The Chair was of the view that any proposed amendments discussed were not material, although assurance was still sought regarding the pension fund.  She would be satisfied with the delegation.

RESOLVED:  That

1)              the latest draft statement of accounts for 2020-21 (Appendix A) be noted. These should be considered alongside the audit results report presented by our External Auditors, Ernst & Young (EY);

2)              delegation for the signing of the 2020-21 accounts to the Chair of the Audit Committee, in consultation with the Chief Finance Officer, on the basis of the remaining assurances from the auditor of Berkshire Pension Fund being received with no further significant impact on the accounts, be approved.