Agenda item

(Copy herewith)

The Chief Finance Officer submitted a report and noted that the recommendations of from the External Auditors would be taken extremely seriously and therefore recommendations may need to be changed as a consequence. It was noted that the Statement of Accounts (SoA) had been produced in line with the statutory timescales and had been subject to external audit by KPMG. It was noted that the biggest change was in relation to the value of Council dwellings and the social housing discount factor that had been applied. The original discount rate applied to the draft SoA was 33%, this was now changed to 42% in line with DCLG Guidance, resulting in an increase of value of £85 million, and there had also been movements in unusable reserves and the CIES statement resulting from this.

With regards to Property, Plant and Equipment (PPE) it was reported that the impact of changes were not just evident on the balance sheet; there was a knock on effect on other parts of the accounts including the Group Accounts and the Housing Revenue Accounts (HRA). It was explained that in unless further adjustments came out of the recommendations of KMPGs ongoing work, the updated report that was presented to the Committee was considered final.

The Committee were advised that when the full valuation was done on site (in person) for the 20% of the beacon properties the outcome was the same as the desktop exercise previously completed.

It was explained that when the Council’s External Valuers had selected a number of more appropriate beacon properties the resulting decrease in valuation of the 20 % population was only 2.2% and it was not possible to decipher if this was due to changing beacons and/or change in the valuers. It was further explained that the valuation was an estimation process and was considered to be very clear and transparent.

In response to a question asked relating to the real effects of the adjustment. Responding to further questions, it was confirmed there was no cash adjustment and that it was solely for accountancy balance sheet purposes, with no effect of Council tax or Housing rent levels. The valutations obtained for council dwellings were used in preparing the year-end accounts and were not used for individual council house right to buy sales

The Section 151 Officer explained in respect of Council right to buy sales there was a stringent code that the Council adhered to and that guidance was followed from CIPFA & DCLG.

RESOLVED:

1.     That the draft Statement of Accounts 2016/17 be approved

2.     That the AGS signed by the Leader and Borough Secretary, acting on behalf of the Chief Executive, be acknowledged

3.     That, in the event of further changes being required following finalisation of the External Auditors work, authority be delegated to the Chair of the Audit Committee, in consultation with The Section 151 Officer and Deputy Chair to sign a revised set of the accounts. Any further changes will be reported back to the next Audit Committee.