The Committee considered the Draft Statement of Accounts 2019/20. The Head of Finance explained that the statutory deadline for sign off of the audited accounts had been extended from 30 September to 30 November 2020 in light of the Covid-19 pandemic.
The Statement of Accounts was governed by the Accounts and Audit Regulations 2015 and detailed the financial transactions for the year and the financial position at year end; they were presented in a standardised format based on guidelines from the Chartered Institute of Public Finance and Accountancy. The Regulations required the draft Statement of Accounts to be certified by the Responsible Financial Officer as presenting a true and fair view of the Council’s financial position and this had been done on 17 July 2020. A period of public inspection then followed. The Accounts would be subject to external audit prior to formal approval by the Committee on 9 November 2020.
The Head of Finance outlined the key points in the Statement of Accounts. The Council had been anticipating a balanced budget but due to the impact of Covid-19 there was an adverse variance of £0.207m. The report outlined the reasons for this including shortfall in income and increased costs arising from investment in ICT equipment to support homeworking. These variances were largely offset by favourable variances including additional income from the Business Rates pilot and staffing efficiencies. The sum of £207k had been transferred from the General Fund Reserve in respect of the adverse variance.
The Collection Fund was a separate account which referred to the collection of Council Tax and Business Rates. The detail was presented which showed an accumulated surplus of £3.977m at year end. This would be transferred to the Business Reserve to help cushion the impact of Covid-19.
The main features of the Balance Sheet were presented. The Reserves were also shown and the level of reserves would be considered as part of the budget preparation process for 2021/22.
Capital expenditure totalled £2.923m in 2019/20 and the main projects were listed. The Capital Programme was funded by capital receipts, Government grants and Section 106 monies.
Members thanked officers for the clear presentation of the Statement of Accounts. They asked whether there were any specific concerns around the future financial position. The Executive Director (Resources and Support Services) explained that work was underway around financial resilience including scenario planning. There were sufficient reserves to cover income losses during the current year. Government grants had been received and the Council had been allocated additional financial support. Any losses from the Collection Fund could be recovered over 3 years rather than one year although enforcement activity had been suspended at present. The Government had announced that there would be a mechanism for sharing irrecoverable Collection Fund losses but details of this were still awaited. The Medium Term Financial Strategy would be brought to Members in October and would reflect the longer term financial issues. There was still a lot of uncertainty around the financial position and Members noted that this affected all Local Authorities.
Members congratulated the officers involved for the work carried out to produce the Statement of Accounts and the additional factors arising from home working.
RESOLVED: That the provisional General Fund outturn and key issues in respect of the Council’s financial position as at 31 March 2020 be noted.