HERTSMERE BOROUGH COUNCIL Agenda 6 Item No Document A/16/26 AUDIT COMMITTEE Reference No DATE OF MEETING: 7 September 2016 PRESENTATION AND APPROVAL OF STATEMENT OF THE ACCOUNTS FOR 2015/16 PORTFOLIO HOLDER: COUNCILLOR GRAHAM SUMMARY This report presents the Council’s Statement of Accounts for 2015/16 for approval by Members of the Audit Committee following external audit. 1. ACTION RECOMMENDED 1.1. That the committee approves the audited Statement of Accounts 2015/16 (Appendix I) , as required by the Accounts and Audit (England) Regulations 2011. 1.2. That the committee notes the contents of the Letter of Representation 2015/16 provided to the auditors and included elsewhere on this agenda. 2. EXECUTIVE SUMMARY 2.1. This report presents the audited Statement of Accounts 2015/16 (Appendix I) for approval by the members of the Audit Committee prior to its publication by 30 September 2016. 2.2. At their meeting on 7 July 2016, the members scrutinised and noted the draft Statement of Accounts before approving its submission to Ernst & Young LLP for external audit. 2.3. The final audit has now been completed and Ernst & Young LLP will present their audit findings to the Audit Committee for noting elsewhere on the agenda. 2.4. Since the draft Statement of Accounts were presented to and noted by this Committee on 7 July 2016, the primary statements have been
updated to take account of the following technical accounting adjustments; Heritage Assets (comprising 4 x Paintings, a sculpture at Elstree & Borehamwood Station and 4 x War Memorials) have been recognised on the Balance Sheet based on current insurance valuations. Richfield Road Land (previously used as an open space for recreational uses) was valued at £100k prior to its disposal for a Housing development in Dec 15. A provision relating to the Municipal Mutual Insurance Scheme (MMI) was transferred from provisions to creditors in the balance sheet following receipt of an invoice shortly after year end. 2.5. As a result of the amendments noted above there have been some revisions to Creditors, Provisions, Heritage Assets & Revaluation Reserve (balance sheet). As well as the deficit on the provision of services (Comprehensive Income & Expenditure Statement) and the Movement in Reserves note, however the previous reported General Fund Balance of £7.698m remains unchanged. (see Appendix 2) 2.6. In addition to this, a small number of minor changes to disclosures within the Notes to the Accounts have been made, details of which will be set out in the audit findings report from Ernst & Young LLP which appears elsewhere on this agenda. 2.7. At the time of writing this report there remains two outstanding issues in relation to the classification of 3 investment properties and the profiling of the NNDR provision between short and long term liabilities. 2.8. In response to the audit findings report the letter of representation will be agreed by the Director of Resources, the portfolio holder and the chairman of the Audit Committee and will be signed and submitted to the auditor prior to the issue of their audit opinion. 2.9. The auditor also requires a letter of assurance in respect of measures taken by the Audit Committee to exercise oversight over management processes. 3. REASONS FOR RECOMMENDATION 3.1. Statutory instrument 817 (Accounts and Audit (England) Regulations 2011) requires that: the Chief Financial Officer must, by the 30 June following the year end, sign and date the Statement of Accounts, and confirm that
they present a true and fair view of the financial position as at 31 March and for the year then ended, and the Statement of Accounts must be approved by the Council (or a delegated body) following the external audit and no later than 30 September following the year end. 3.2. In line with recommended good practice (as supported by the Department for Communities and Local Government), the Audit Committee noted and approved the draft accounts to be submitted for external audit at their meeting on 7 July 2016. 3.3. The Audit Committee have been delegated authority by Council to approve the final audited Statement of Accounts in accordance with the Accounts and Audit (England) Regulations 2011. 4. ALTERNATIVE OPTIONS 4.1. None applicable for the purposes of this report. 5. PLANNED TIMETABLE FOR IMPLEMENTATION 5.1. The timetable from approval of the draft accounts through to publication of the final audited accounts set out below.
5.2. As resolved at the Full Council meeting held on 12 September 2012, the Audit Committee has been delegated authority to approve the Statement of Accounts on their behalf. 5.3. Following approval at this meeting, the audited Statement of Accounts will be presented to the Full Council on 23 November 2016 for information purposes and to provide elected members the opportunity to scrutinise them. 6. FINANCIAL AND BUDGET FRAMEWORK IMPLICATIONS 6.1. The Statement of Accounts has been prepared in accordance with the Code of Practice on Local Authority Accounting in the UK (The Code) and the Best Value Accounting Code of Practice (BVACOP), which are both regulated by the Chartered Institute of Public Finance and Accountancy (CIPFA). 6.2. Adjustments to the accounts (as explained in para 2.4) have resulted in no change to the General Fund balance over the amounts reported to the Audit Committee on 7 July 2016. The Annual Audit and Inspection letter to be issued by the Council’s 6.3. External Auditors later in the year will give a comprehensive review of the Council’s financial management and system of internal controls. 6.4. Following approval, the Statement of Accounts will be published in final form on the Council’s web site by 30th September 201 6. The Annual Audit and Inspection letter will also be published on the Council’s website after it is issued. 7. LEGAL IMPLICATIONS 7.1. The Accounts and Audit Regulations 2015 require that the Chief Financial Officer must, no later than 30 June immediately following the end of the year, sign and date the Statement of Accounts, and confirm that it presents a true and fair view of the Council’s financial position at the end of the year it relates, and of the Council’s income and expenditure for the that year. 7.2. This report and the appendix fulfil the statutory requirements of the Accounts and Audit Regulations 2011. The Accounts and Audit Regulations 2015 amend the dates in paragraph 3.1 above to May and 31 July respectively with effect from 1 April 2017.
8. CONFIRMATION OF THE CHIEF FINANCIAL OFFICER 8.1. In accordance with the Accounts and Audit Regulations 2015 the Council’s Chief Financial Officer signed the draft Statement of Accounts on 30 June 2016 and confirmed that they represent a true and fair view of the Council’s financial position as at 31 March 201 6 and for the year then ended. Following the completion of the external audit, the Council’s Chief 8.2. Financial Officer will re-certify the accounts as representing a true and fair view of the Council’s financial position as at 31 March 2016 and for the year then ended. 9. PERSONNEL IMPLICATIONS 9.1. None applicable for the purposes of this report. 10. CORPORATE PLAN & POLICY FRAMEWORK IMPLICATIONS 10.1. Subject to final audit opinion, the information disclosed within the Statement of Accounts gives a true and fair view of the financial standing of the Council at 31 March 2016. Therefore (subject to audit) the information contained therein will be used to assist in the preparation of the 2017/18 Finance and Capital strategies. 11. RISK MANAGEMENT 11.1. None applicable for the purposes of this report. 12. APPENDICES ATTACHED Appendix I - Final Statement of Accounts 2015/16 (subject to final audit opinion) Appendix II - Table tracking audit changes 13. BACKGROUND PAPERS USED IN PREPARATION OF THIS REPORT Statutory Instrument No. 817 – The Accounts and Audit (England) 13.1. Regulations 2015.
14. AUTHORS 14.1. Principal Authors: Daniel Omisore (Financial Services Manager) Email: daniel.omisore@hertsmere.gov.uk Ext: 3145 14.2. Responsible Officer: Sajida Bijle (Director of Resources) Email: Sajida.bijle@hertsmere.gov.uk Ext: 5000 15. CONSULTATION ON DRAFT REPORT 15.1. On 26 August 2016 a copy of the draft report was sent to the following: Chief Executive, Directors, Head of Finance & Business Services.
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