Agenda and draft minutes

To receive any apologies for absence.

There were no apologies for absence.

To receive any questions from members of the public and replies thereto.

The following members of the public asked questions:

Nick Quinn

Regarding Agenda Item 6 - Updated Statement of Accounts 2023/2024

On Page 58 of the Draft Accounts, issued for this meeting, at 2 (d) are these words: 

“The Council has also placed reliance on technical estimates supplied by third parties for the following:
  - Property valuations made by the District Valuer
  - Pension valuations supplied by Barnett Waddingham - Actuary …..
The Council has received very detailed reports from both of these sources outlining overall valuations and all of the key assumptions made in arriving at these final figures. These reports will be examined by the auditor during their audit of the Council's Accounts”.

On Page 61 of the Draft Accounts, in the "Impairments" section of the Table, are these words: 

“The District Valuer valued the assets purchased from the Company at £2.016 million lower than the price paid. These assets are being held until the market recovers and a higher sales price can be realised”.

One of the ‘assets’ referred to is the Land at Knowle Lane, Cullompton – purchased by the Council, from 3 Rivers, for £3.66 million.

The implication of the wording is clear - The District Valuer had valued the Land at Knowle Lane and the Auditor had ‘examined’ that valuation. 

Question 1

Did the District Valuer actually provide a valuation on the Knowle Lane land ‘asset’?

Response provided by the Audit Committee Chair:

Yes, as part of the year-end review of asset valuations.

Question 2

If so: On what date?

Response provided by the Audit Committee Chair:

11 March 2024

Question 3

If not: Why does it say, in the Statement of Accounts, that he did?

Response provided by the Audit Committee Chair:

Not relevant.

Question 4

What ‘report’ did the Auditor ‘examine’ in regard to the real value of this land?

Response provided by the Audit Committee Chair:

The year-end asset valuation report provided by the District Valuer.

I have one additional question, which was not submitted in advance:

Question 5

Referenced on page 11 of the Draft Accounts is the purchase, from 3 Rivers, of five units at Haddon Heights, Bampton. The price paid, in March last year, was more than £3million.  Have any of these houses been sold yet?

Response provided by the Head of Finance, Property Services and Climate Resilience:

No, not at the current time.

Barry Warren

My first reference is to item 6 on your agenda, pages 18/19 Paragraph 3.2 where it states:

“As outlined at the December meeting, following Cabinet approval of the approach to resolving the Historic Rent error, a provision of £1,545k has been included within the accounts.”

The Cabinet Report of the 10^th of December 2024 included in Paragraph 2.2 are these words “…. correct this position in consideration of advice secured and also considering the impact on both our current/former tenants and with regard to the financial viability of the Housing Revenue Account in both the  ...  view the full minutes text for item 36.

To record any interests on agenda matters.

No interests were declared under this item.

To consider whether to approve the minutes as a correct record of the meeting held on 3 December 2024.

The minutes of the meeting held on 3 December 2024 were confirmed as a true and accurate record and SIGNED by the Chair.

To receive any announcements that the Chairman may wish to make.

The Chair welcomed Jennifer Whitten, the Independent Person, to her first official Audit Committee meeting at Mid Devon District Council and thanked her for attending.

To receive the updated Statement of Accounts 2023/2024 from the Deputy Chief Executive (S151) presenting the proposed final version of the 2023/24 Statement of Accounts to Members, highlighting any areas which have been amended since the draft accounts were published on the website, presented for external audit and considered by Audit Committee in June 2024.

The Annual Governance Statement remains unaltered. The Letter of Representation is a standard letter from the Council confirming the information contained within the accounts are accurate to the best of our knowledge.

The Chair stated that he would be taking items 6 and 7 together and then, after discussion, the Committee would consider the recommendations.

The Committee had before it a report * from the Deputy Chief Executive (S151) presenting the proposed final version of the 2023/24 Statement of Accounts to Members, highlighting any areas which have been amended since the draft accounts were published on the website, presented for external audit and considered by Audit Committee in June 2024.

The following was highlighted within the updated Statement of Accounts:

·         The updated Statement of Accounts before the Committee were the culmination of the 2023/2024 accounts. These had been presented to the Committee in December 2024 but had needed readjusting in light of the Social Housing Rents error. These adjustments were shown in orange for ease of reference under Note 59.

·         It was the Accountants view that the Accounts before the Committee this evening were a true and fair reflection of the Council’s financial position as at 31^st March 2024.

·         The Committee were informed of the need, following discussion and resolution, for the Chair and necessary officers to sign the revised Letter of Representation, the Annual Governance Statement, the pages in the Accounts that the Section 151 Officer was responsible for and, as was normal practice, the Balance Sheet.

The following was highlighted within the Bishop Fleming, Audit Findings Report:

·         This was an updated report to that which had been presented to the December 2024 Audit Committee meeting.

·         The key issues that had been outstanding were referred to including finalising their review and testing of the supporting working papers for the provision for the social rents overcharged.

·         ‘Other audit and financial matters’ on page 11 of their report were also referred to including the Valuation of the Pension Fund, 3 Rivers Developments Limited and Social Rents. The key issue was that this error had been identified. Similar occurrences had been found in other local authorities and Bishop Fleming had designed a test to assess for such errors. The important factor was that the Council had sought external legal advice in trying to resolve the matter.

·         The audited adjustments on page 12 provided positive reassurance.

Discussion took place regarding:

·         It was confirmed that the impact of the Housing Rents error would be on the Housing Revenue Account and not the General Fund.

·         An indicative figure of £1.5m had been notified to Members as the error amount, however, determining this was a complicated matter. The Council was still working with the Department for Work and Pensions (DWP) to ascertain the benefits impact, whether or not tenants had moved within the 6 years referred to, some tenancies may have been under charged and some overcharged for the same tenant during a 6 year period. A full and thorough breakdown would be provided to Members as soon as it had been calculated.

·         Member briefings were intended as well as regular reports to the Cabinet and the Homes PDG in order to keep Members updated.

·         Compensation would  ...  view the full minutes text for item 40.

To receive the 2023/2024 Annual Audit Findings Report from the external auditors, Bishop Fleming.

(Document to follow)

The Committee had before it, and NOTED, the 2023/2024 Annual Audit Findings Report from the external auditors, Bishop Fleming.

Discussion regarding this report had taken place under the previous item.

Note: * Report previously circulated.

Members are asked to note that the following items are already identified in the work programme for the next meeting:

·       Chair’s Annual Report for 2024/2025

·       Corporate Recovery Policy

·       Corporate Risk Quarter 3

·       Risk Management Policy

·       Whistleblowing Policy

·       Anti-Fraud & Corruption and Anti Money Laundering Policies

·       Internal Audit Progress Report (DAP)

·       Internal Audit Charter & Strategy (DAP)

·       Four year Strategic Audit Plan and Work Programme (DAP)

·       External Audit Progress Report (Bishop Fleming)

Note: This item is limited to 10 minutes. There should be no discussion on the items raised.

The Committee had before it, and NOTED, the items identified in the work programme for the next meeting. It was also requested that the following be on the agenda for the next meeting:

·         An update report in relation to the Housing Rents error.

·         An update on what support local authorities will be getting from the Government in relation to National Insurance contributions.