Agenda item

The Committee considered a report seeking the review and approval of the accounting policies, actuary assumptions and materiality levels to be used for the preparation of the 2025 - 2026 accounts.

It was explained that the report set out the accounting policies to be used when preparing the 2025 -2026 accounts. The actual assumptions had been supplied by the pension actuary at Barnet Waddingham and then an outline of the materiality levels applied when compiling the accounts as discussed earlier with KPMG.

It was noted that authorities were required to publish their draft accounts by the 30th June 2026 and audited accounts by the backstop date of the 31st January 2027.

It was hoped however that the audit of the accounts would be completed in the autumn and the timetable had been set to meet the deadlines.

A member referred to pensions and the fluctuation in the market and asked if there was any indication of the impact on the accounts. Initial indications were that liabilities had reduced but this would be clarified later in the process.

It was asked by a member about the costs of the audit and accounting process and staff overtime and use of consultants. In response it was confirmed that the team was fully staffed but there may be the need for some overtime at key pressure points in the financial year. It was clarified that deadlines has always been met and that would be the case this year.

In response to a query it was explained that group accounts related to companies under the umbrella of the council and they would need separate group accounts if they reached a certain materiality. It was not anticipated that this would be required this year.

A member sought further clarification regarding company accounts and how these were audited and in response confirmation was given that they fell below the threshold for external audit. Discussion ensued regarding the governance of council owned companies and it was confirmed each one had its own board and Council directors were on those boards to represent the Councils interests. The business plans of each were presented to the relevant Council Policy Committee to ensure oversight of their operations.

It was explained that the Governance and Audit Committee received information as part of the statement of accounts and was shown in the related parties section where high level income expenditure tables for each of the companies was provided. In the event of group accounts being needed there would be more detailed information provided. Confirmation was given that due to the size of the companies there were no other significant risks to be aware of.

It was suggested that it may be beneficial for members to receive more details of the company accounts as well as the business plans. A member further asked about potential LGR changes and the impact on council owned bodies in the future. The concern was acknowledged and was an issue that would need consideration and a report could be bought to members in due course.

A member asked about the merits of using external agencies and whether it would be cheaper to bring this ‘in house’. In response the process was explained and it was suggested that a session on the operation and governance of the companies would be beneficial.

RESOLVED:

1.         To approve the proposed Accounting Policies, included at Appendix 1 to the report;

2.         To note the pension assumptions, as included at Appendix 2 to the report;

3.         To note the risk assessment, attached at Appendix 3 to the report;

4.         To approve the proposed materiality levels as included at section 5 of the report;

5.         To note the key closedown dates as shown at Section 7 of the report; and

6.         To accept the main accounting changes for 2025/26 and onwards as

            shown at section 2 of the report.