Agenda item

Members considered the Closedown Matters report for 2021/22, in order to review and accept the accounting policies, actuary assumptions and materiality levels that were used for the preparation of the 2021/22 accounts.

The report’s consideration also included explanation of the process of the External Audit in the Statement of Accounts and approach to the Value for Money audit for 2021/22.

The Audit and Accounts Regulations 2015 required Local Authorities to produce and publish their Statement of Accounts by 31 July, which changed for both 2020/21 and 2021/22 from 31 May previously, and an Audited Statement of Accounts by 30 November annually, changed in 2021/22 from 31 July previously.

Members were advised that no changes to accounting policies had been made since the production of the 2020/21 financial statements. External Audit had set a materiality level for the Council of £990,000 for 2020/21 and amounts less than £30,000 were considered trivial, i.e. not significant.

An assessment of the risks associated with closing the Councils accounts and producing the Financial Statements was undertaken and the risk assessment was attached at Appendix 3 of the report. After applying the planned mitigation, the majority of risks were low risk (green) with only two risks identified as being high (red), both relating to the Council’s subsidiary companies.

Debate ensued and Members asked a number of questions of the Section 151 Officer and the External Auditor. In responding to questions on materiality, Members were advised the formula applied was an auditing standard, using an appropriate benchmark, such as pension funds. Members heard that factors such as organisational changes and financial systems could reduce the level of materiality.

In response to questions regarding deficit risks in the pension fund, Members were advised of the assumptions used in the Actuary’s triannual review.  Regarding the pension fund, the Officer advised increased contributions were needed to spread the risk and repayment over the current 20-year period. Members were informed that a 1% increase in the employer’s contribution rate had been factored in going forward, with around one million pounds per annum paid to reduce the deficit, subject to liability increases. These risks were reviewed annually by the Council, with risk reserves being a consideration given to future projects in the budgetary process.

In response to a question about risks for external companies, Members were advised that for externally administered organisations, including the Dransfield administered Market Street Renewal Ltd., work was done to ensure the relevant material was submitted in order to close the accounts.

Having been moved and seconded on being put to the vote it was unanimously

RESOLVED that:

(a)     the proposed Accounting Policies (included at Appendix 1) be approved;

(b)     the pension assumptions (as included at Appendix 2) had been considered and commented on;

(c)     the risk assessment (at Appendix 3) had been considered and commented on;

(d)     the proposed materiality levels as included at section 5 be approved;

(e)     the key closedown dates at Section 7 had been considered and commented on; and

(f)      the main accounting changes for 2021/22 and onwards, as shown at section 3 of the report be accepted.