Agenda item

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 need to be considered and there was a Mid Devon Housing policy in existence to help support decisions in that area.

·         The complicated nature of the modelling process.

·         Affected tenants had been written to.

·         Whether reports in relation to this error should come to the Audit Committee as well as the Scrutiny Committee and the Cabinet. It was felt that feedback from this Committee, which had responsibility for monitoring risk, could then be relayed back to the Cabinet. It was AGREED that an update report on the Housing Rents error be brought to the next meeting of the Audit Committee.

·         The use of Reserves and how they were funded.

·         Concerns regarding staff sickness and the current challenges of recruiting to the local government sector.

·         The complex format of the Statement of Accounts. There was general agreement that the Accounts had increased in length, increased in complexity, Audit fees had increased and yet their ability to be easily understood by the general public had decreased. However, until the legislation changed this format would need to remain. Bishop Fleming confirmed that this Council’s accounts were comparable in terms of length and complexity with other local authorities with perhaps the focus being in the wrong areas. A process of change and simplification was needed.

RESOLVED that:

a.    The 2023/2024 Statement of Accounts (noting the findings made by the external auditor, Bishop Fleming) be approved;

b.    The 2023/2024 Annual Governance Statement and the revised Letter of Representation be approved and all associated documents be signed by the relevant officers and Members.

(Proposed by Cllr R Roberts and seconded by Cllr B Fish)

Note: * Report previously circulated.