Agenda item

Members considered the Audited Statement of Accounts for 2022/23. An introduction was provided by the Section 151 Officer, who advised that the Statement of Accounts 2022/23 had not received a formal audit opinion due to the delay in the pensions liability audit, but that the accounts as they stood would receive an unqualified audit opinion. The Statements reflected the Authority’s financial activity for the year up to 31 March 2023.

The Council had continued to deliver its executive business plan activities to achieve its corporate objectives, through investment projects and service delivery. The Council had achieved the statutory deadlines for the preparation of the accounts and as the auditors outlined only the pension fund audit and some sample testing was left outstanding before full certification of the statements.  The Audit completion report earlier on the agenda outlined the non-adjusting misstatement which the Auditors had identified and one control risk which had been rectified.

The narrative report provided an illustrative and comprehensive view of the Council and its performance and achievements in delivering corporate plan objectives. The Balance sheet on page 39 in the supplementary agenda pack reflected net assets of £43.842m which reflected the impact of a significant reduction in the pension liability, and which was planned to reduce further over a period of 20 years.

The Council’s useable reserves decreased marginally from £28.608 million to £28.157 million with £19.3 million earmarked for future investment and service improvements and to mitigate risk.  The General Fund working balance exceeded the minimum requirement of £2.5 million and would provide some resilience to potential changes in future funding streams in the medium term.

The Comprehensive Income and Expenditure Account on page 38 reflected a surplus on the provision of services of £(1.841) million, and after other adjustments showed a total comprehensive income and of £(35.621) million. The surplus on the provision of services was reconciled to the actual revenue outturn position in note 7 the Expenditure and Funding analysis.

The Cashflow statement on page 51 of the supplement agenda pack showed a net decrease of cash of £1.344 million, which reflected the significant amount of grant funding which the Council was holding had now partly been expended. In terms of the accounts document the auditors identified a small number of presentational items and the Statement of Accounts that was originally certified by the Chief Finance Officer and published had now been updated accordingly. There had been no events after the reporting period to declare and no requests to inspect the accounts during the statutory period. The Deputy Section 151 Officer thanked the finance team for all their hard work and invited responses.

Lengthy questioning ensued and explanation was requested and received regarding the details of the movement in usable reserves. Members heard that the Authority had about £6 million in general fund reserves that could be utilised, with the lower safety limit being judged at around £4.5 million, with this carefully monitored, for any short or long-term concerns. The Council could have used those unearmarked reserves, such as if no central Government funding was received during the COVID-19 pandemic.

Members sought clarification on the mortality assumptions within the report, with the lifespan assessment reduction coming from Price Waterhouse Coopers, West Lindsey District Council's actuary. The actuary reduced longevity in the pension assessment partly due to COVID-19 and other related factors. This change was measured to be within the reasonable range of mortality.

Members heard the staffing levels absences, as noted on page 28 of the supplement report pack, were only for employees directly employed with the Council and omitted SureStaff and other West Lindsey District Council companies, such as Market Street Renewal. Further checks on these companies' long-term and short-term absences were agreed to be made and reported back.

In a query about the target time to resolve a complaint being slower than the actual time it took, the Section 151 Officer explained that the setting of the targets was outside of the purview of the Governance and Audit Committee but that this comment would be reported to the relevant Committee, Overview and Scrutiny, for further review. The same concern would also be reported on the Corporate Health performance, specifically ensuring adequate staff was available to manage increased physical access to the Council.

Members enquired about the gross income reduction in the 'Our Place' section, which was explained as being due to the capital accounting aspects with the Southern SUE project in the 2021/22 accounts. This meant less income and expenditure for the 2022/23 accounts.

In reply to a query about the assets and the increase in the value of the property, plant and equipment, Members heard that the Authority did not budget for non-cash adjustments but that there were regular re-evaluations and adjustments to the statutory accounts.

In a late exchange with one of the external audit partners, it was reported that the Authority was among the first to complete its accounts under the Mazars umbrella of local authorities compared to its benchmarking. There was no possibility of fines concerning the delay in issuing the audited statement of accounts, with only a short statement required to explain the reason for the delay in confirming the audited statement of accounts.

The Chairman also raised the possibility of an additional recommendation to request that the Overview and Scrutiny Committee review the accounts and budget-setting processes. Thanks were given to the audit partners by the Chairman, as this was the final set of audited statement of accounts that Members would receive from Mazars, with KPMG being the new external audit partners.

The Chairman explained that due to a delay with the auditing of the Statement of Accounts concerning the pension liabilities and not being able to pass any recommendations without all the information, Members would have to adjourn the meeting and find a suitable date to return to consider this item and any recommendations formally.

Note:               The meeting was adjourned at 3.28 PM to a future date to be advised