Agenda item

This committee approved the draft 2008/09 Statement of Accounts at its meeting on 30 June 2010.  Since then, the Audit Commission has been conducting its audit. 

Under the closedown arrangements, the statutory deadline for completing the audit is 30 September 2010.  The amended Statement of Accounts (to be circulated as a separate document) need committee approval. 

Recommendation

that the amended 2009/10 Statement of Accounts be approved. 

The chair introduced this item by reminding the committee that it needed to consider the Audit Commission’s annual governance report 2009/10 before considering the statement of accounts.  The other elements of this item were for the committee to approve the council’s annual governance statement, which formed part of the statement of accounts, and to authorise the chair and the chief finance officer to sign a letter of representation to the Audit Commission. 

Audit Commission’s annual governance report 2009/10

The chair invited Maria Grindley, the Audit Commission’s representative, to address the committee.  Ms Grindley introduced her report on the audit undertaken on the council’s 2009/10 draft statement of accounts.  The committee had approved the draft in June.  Ms Grindley asked the committee to consider her report, take note of the adjustments to the council’s financial statements, and agree its response to the action plan. 

The key messages for the council were:

• There was an unqualified audit opinion

• The financial statements were now free from material error, following the acceptance of the Audit Commission’s recommendations

• The council had an adequate internal control environment

• There were adequate arrangements to secure value for money

The committee noted that the main material errors discovered by the Audit Commission were that there had been no revision of previous property values, and the Landsbanki investment appeared in the accounts as an investment rather than a debtor.  With the council accepting these changes, Ms Grindley had no outstanding concerns. 

Statement of accounts 2009/10

The committee then considered the statement of accounts in light of the Audit Commission’s recommendations. 

Councillors noted an addendum that clarified an event that had occurred after the balance sheet date.  On 22 June 2010, the government announced that employers’ contributions to the pension scheme would use the consumer price index rather than the retail price index.  This meant the council would pay lower contributions to the pension fund.  This change would appear in paragraph 31. 

In answer to questions from councillors, the officers agreed that there should be an explanatory note on the capitalisation of senior staff salaries.  For future years, there should be a note to link the basis of fixed asset valuation back to the balance sheet.  Notwithstanding these future changes, the committee was assured that the council had followed robust processes in preparing the statement of accounts. 

Annual governance statement

The committee reviewed the annual governance statement.  Councillors asked for an update of the contents page following changes to the draft version suggested by the Audit Commission.  Councillors also queried the relevance of the text on page 85 to the last recommendation and agreed that the strategic director should re-write this. 

Letter of representation

The committee approved the wording of the letter of representation to the Audit Commission and authorised the chair and the chief finance officer to sign it. 

RESOLVED  (by eight votes to nil)

(a)       To note the Audit Commission’s annual governance report 2009/10;

(b)       To approve the statement of accounts 2009/10, noting the following future changes:

(i)         Amend paragraph 31 to use the consumer price index for employer’s contributions to the pension scheme,

(ii)        Add an explanatory note on the capitalisation of senior staff salaries

(c)        To approve the annual governance statement 2009/10, subject to updates to the contents page and the text on page 85 relating to the last recommendation;

(d)       To authorise the chief finance officer and the committee chair to sign the letter of representation to the Audit Commission; and

(e)       To agree that in future years, the statement of accounts shall include a note to link the basis of fixed asset valuation back to the balance sheet.