Agenda item

            The Board considered a report of the Operational Director, Finance which sought approval of the Abstract of Accounts and set out the Audit Commission’s 2010/11 Annual Governance Report and presented the Letter of Representation for approval.

 

            Members were advised that the Abstract of Accounts, which detailed the Council’s financial performance for the year in terms of revenue and capital spending and presented the year-end financial position, could not be signed off until the Annual Governance Report had been considered.

 

            It was reported that the format of the Abstract was heavily prescribed by the Accounts and Audit Regulations and the Code of Practice on Local Authority Accounting (The Code).  It was noted that for the first time the Abstract had been prepared in full compliance with the International Financial Reporting Standards (IFRS) following the two year transition period.  As a result there had been significant changes to the financial statements and notes to the accounts, presented with the Abstract.  It was further noted that the adoption of IFRS meant that some amounts presented in the 2009/10 Abstract differ from the equivalent figures shown in the 2010/11 Abstract. 

 

            The Board was advised that in overall terms the Council had underspent its 2010/11 budget by £120,000.  In addition, the Council received an additional £72,000 of Government grant income, therefore the net result was that General Fund Balances would increase by £192,000 to £7,367,000.

 

            The key elements of the Abstract where outlined in the report for Members’ consideration as follows:

 

·        Capital expenditure;

·        School balances;

·        Transition to IFRS;

·        Comprehensive income and expenditure account;

·        Council’s balance sheet as of 31^st March 2011;

·        Movement in reserves statement;

·        Cashflow statement;

·        Notes to the core financial statement;

·        Collection fund;

·        Group accounts; and

·        Statement of responsibilities.

 

The Board discussed these areas and considered the Abstract of Accounts in detail, robustly scrutinising its contents. In particular the following points were noted:

 

·        With regard to equal pay, additional provision had been made and this was now considered sufficient to cover the potential costs;

·        In relation to pension fund liability it noted that the pension calculation as at 31 March 2011 reflected the change and had reduced from £121.95m to £60.34m.

 

Members moved on to consider the Annual Governance Report which was set out in two parts, the Audit opinion and financial statements, and the review of the arrangements for value for money. 

 

Appended to the report for information and approval was the Letter of Representation from Mike Thomas, District Auditor. Members agreed to approve the Letter.

 

The Annual Governance report set out the Opinion, audit risks, significant weaknesses in internal control, quality of financial statements and recommendations.

 

It was reported that an unqualified audit opinion would be provided.  Members were advised of two material errors identified, neither of which affected the reported year end financial position.  It was further noted there was excellent liaison with officers during the audit with full and prompt responses to audit queries and good quality working papers were provided to support the entries in the account.

 

Members were advised of two further errors which the accounts department had decided not to amend as set out in the letter of representation.  External Audit was satisfied with the reasons and the explanations as to why the errors were not being amended.

 

Arising from the discussion Members further considered the accounting arrangements associated with Mersey Gateway.

 

The Board acknowledged the amount of work carried out to produce the Abstract of Accounts and wished to place on record their thanks and congratulations to the Audit Commission and officers involved in the process.

 

RESOLVED: That;

 

1)     The Audit Commission’s 2010/11 Annual Governance Report in Appendix 1 be received;

 

2)     The 2010/11 Abstract of Accounts be approved; and

 

3)     The Letter of Representation in Appendix 2 be approved.