Agenda item

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

To also receive:

·       The Annual Governance Statement

·       Bishop Fleming’s Audit Completion Report

·       Bishop Fleming’s Annual Report

·       Letter of Representation

The Committee had before it a report * from the Deputy Chief Executive (S151) presenting an updated draft version of the 2023/24 Statement of Accounts, 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 draft Annual Governance Statement * was also presented to the Committee.

The following was highlighted:

·       The Committee were reminded that they had received the draft Statement of Accounts and Annual Governance Statement in June 2024. It had been anticipated that the Accounts would be signed off in October 2024 but this had not been possible due to a number of factors.

·       The audit was now largely complete, one issue remained regarding the Social Housing Rent error. This would be discussed by Cabinet the following week with an outlined proposal as to how to resolve the error, final adjustments would then be made to reflect the resolution correctly in the accounts. The final accounts would then be presented to the Committee for the final time in January 2025.

·       There had been no changes to the Annual Governance Statement since June 2024.

·       The minor changes to the accounts since they were last presented to the Committee were summarised as follows:

o   Improved narrative to clarify the overspend of £635k had been offset by reserves.

o   The clarification of the application of the Going Concern concept to the Group Accounts.

o   The ‘expenditure and funding’ analysis had been repositioned more appropriately within the accounts.

o   Members Allowances (note 16) had been updated as previously the accounts had shown outdated information.

o   An adjustment to the Group Accounts by £58k following a minor adjustment to 3Rivers Final Accounts.

Discussion took place regarding:

·       It was confirmed that the Social Housing Rents issue would be isolated to the Housing Revenue Account (HRA) although it was possible some staff costs would be recharged to the General Fund.

·       The Council was in a buoyant position regarding its reserves and was holding above the minimum amount of £2m.

Following this the external auditors, Bishop Fleming, presented their completion report * and Annual Report * with particular reference to the following:

·       They were coming to the end of their first year as the Council’s new external auditors. It had gone well and thanks were extended to the Finance team for their ongoing co-operation.

·       Limited adjustments to the accounts had been required and the Council was in a good position regarding its record keeping and control environment.

·       One issue remained regarding the Social Housing Rents error and they were waiting to see what decisions were made regarding the resolution of this error before finalising their report.

·       Reference was made to the significant weakness that had been identified by the previous auditors regarding 3Rivers. The new auditors were satisfied that the closure process had been dealt with appropriately.

·       Bishop Fleming’s Annual Report focussed on the Council’s ‘Value For Money’ arrangements. Key themes were financial sustainability, governance and the 3 ‘E’s’: economy, efficiency and effectiveness. The report included a table setting out their conclusions. Governance arrangements regarding Social Housing Rents had been rated as a significant weakness.

·       In auditing the 2022/2023 accounts, Grant Thornton had identified a significant weakness in relation to 3Rivers, since this was being closed down in 2023/2024 Bishop Fleming still had to recognise that weakness in their report also. The report contained their recommendations. They would be bringing their final report to the January meeting of the Audit Committee.

Discussion took place with regard to:

·       There were different levels of testing undertaken by the external auditors dependent on an assessment of risk in particular service areas.

·       Concern regarding the two areas of significant weakness that had been identified. However, the external auditors reassured the Committee that it was only these two areas and that by their nature, external audit reports were always backward looking and did not take into account plans to correct and resolve issues going forwards. There was an expectation that 3Rivers would not appear in the accounts for 2024/2025 and that actions to resolve the housing rents error would be agreed by Cabinet in the following week and the accounts adjusted to reflect that.

·       A request was made to correct the wording at the top of page 286 of the agenda pack to state ‘2022/2023 recommendations’ so it was clear which year was being referred to.

·       An improvement recommendation had been included within the auditor’s report regarding the treatment of the Medium Term Financial Plan going forwards. It was not unusual for district councils to have identified a funding gap over the next 4 years given the reduction in government funding.

·       The external auditors had been satisfied with the Council’s proposals to address the Social Housing Rents error in terms of the legal advice they had sought and good practice learned from the housing sector generally.

·       Due to the auditor’s report not quite being compete yet, the Annual Governance Statement and the Letter of Representation would need to be signed at the January meeting.

RESOLVED that the 2023/24 Statement of Accounts be approved subject to the inclusion of a Provision for the Rent Formula Error once it is available.

(Proposed by Cllr B Fish and seconded by Cllr D Broom)

Reason for the decision

As set out in the report.

Note: * Reports previously circulated.