57 Accounts Closedown 2020/21 Accounting Matters PDF 416 KB
Members considered a report asking for a review of, and approval of accounting policies, actuary assumptions and materiality levels that will be used in the preparation of the 2020/2021 accounts.
Note: Peter Walton joined during this item.
Also outlined was the process of the External Audit of the Statement of Accounts and the approach to the Value for Money audit 2020/2021.
The following pieces of information were highlighted:
· Local authorities were required to publish an audited Statement of Accounts by the end of September; however there may be further changes to statutory deadlines in the coming months;
· The National Audit Office had introduced a new code of practice. There were a number of changes to financial and reporting requirements;
· There had been a change to the fee charged by Mazars, the external auditors. This fee had increased to £42,000, but the Government had apportioned extra funding to meet increased audit fee requirements;
· There had been minimal changes to the Chartered Institute of Public Finance and Accountancy (CIPFA) code of practice, and no changes to accounting policies;
· The pension fund had had a change of actuary, which had resulted in a change of assumptions. There were no known proposals that could impact on these assumptions;
· The materiality level set by External Auditors was £900,000, and the triviality, or insignificance level was set at £27,000.
Members then provided comments on the report, and asked questions of officers. Further information was provided:
· Auditors were faced with extra work on property, plant and equipment and pensions. They also have a new audit code; these and other reasons resulted in the increased fee in their services;
· The Council was provided with detailed explanations of pensions forecasting, and the Council’s triennial report took this into account. The Council’s pension fund was pooled, so whilst investments were held as one fund, West Lindsey’s investments were protected in a separate scheme;
· Certain criteria needed to be satisfied before assets could be labelled as ‘assets held for sale’, and they must be externally marketed. If priorities changed for the Council, then assets could be changed back to ‘non-current’;
· The Council used elements of Community Infrastructure Levy (CIL) contributions for capital schemes, and those contributions were detailed in the capital programme. The amounts were collected on a regular basis until they could be paid over to other organisations;
· The materiality level set by the External Auditors was typically calculated by using a figure of 2% of gross expenditure;
· IFRS 16 introduced significant changes in the treatment of leases for financial reporting purposes. However, it had been delayed and would not be applicable until 1st April 2021. Leases would need to come onto the Council’s balance sheet;
· Any changes in the political or economic environment would be taken into consideration;
· There had previously not been any trading on the property fund due to uncertainty, but this had now been re-opened. Economic certainty was returning, but uncertainty remained a risk to the accounts;
· Property valuations were actively challenged. Due to ... view the full minutes text for item 57