Agenda item

(To receive a report which presents the draft Statement of Accounts for Lincolnshire County Council for the financial year 2015/16 for scrutiny and comment by the Audit Committee)

Consideration was given to a report which provided the members of the Audit Committee with an opportunity to scrutinise and comment on the draft Statement of Accounts for Lincolnshire County Council for the financial year 2015/16.  The final Statement of Accounts would be presented to the audit Committee in September for approval.  Ian Fifield from LG Futures was in attendance at the meeting to guide the Members through the Statement of Accounts and help them to fulfil their role to scrutinise and comment on the financial statements.

Members were advised that there had been a number of problems preparing the accounts this year, and they may not be of the same quality as normal.  A slightly revised set of accounts would be given to KPMG for when they started the process on 1 August 2016.

The Members of the Committee were guided through the draft Statement of Accounts, and were provided with the opportunity to ask questions on each section.  Some of the points raised during discussion included the following:

·         This was the draft Statement of Accounts, and it was good practice that the Audit Committee considered the draft statement before formal approval in September.

·         There were no substantial changes to the format.

·         Page 143 – reserves had been used during the year, and the underspend had been in schools.

·         Page 147 – Pension Fund Liability

·         Page 149 – this showed how reserves had moved.  It was noted that the final reserves figure included both useable and unusable reserves (e.g. revaluations and pension fund reserves which could not be used to fund future spending).

·         In terms of the reserves, there was £18m in the balance that belonged to schools.

·         Ian Fifield from LG Futures advised that he was aware of the issues experienced by the authority during this year.  It was noted that it would be difficult to compare this year with last year, and the audit report may be longer than normal.

·         There would be a need to state what had been found and what had been changed

·         It was commented that the funds in the financial volatility reserve were entirely appropriate in the current financial situation.

·         Page 151 – the figure of £1.1bn for the spend of the authority was correct, as this was gross expenditure.

·         In relation to the underspend on adult care, the outturn report would be going to the Executive in September.  The underspend was due to the numbers of people coming into the service being a little lower than expected.

·         In was queried whether in view of the issues with the general ledger, was there any notion of the potential margin of error that may be coming out of it.  It was noted that the accounts were in a relatively reasonable state, and it was issues around feeder systems (e.g. payroll) that were the areas causing the most problems.

·         The constitution stated that each service should only overspend or underspend by up to 1%.  Every service area which had underspent had done so by at least 1% therefore, no service area should be disadvantaged by having to carry forward an overspend.

·         It was noted that there had been a reduction in planning services income line in the Comprehensive Income and Expenditure Statement.  This was due to Economic Regeneration which had had large amounts of income in previous years as a result of a large grant for 'Growing Places'.

·         Differences in the expenditure of the corporate and democratic core was due to the costs of the elections in 2015.

·         Page 152 – cash and cash equivalents – although the position appeared to be overdrawn at bank, the authority offset County Council and Pension Fund balances so had not gone overdrawn therefore had not incurred bank charges.

·         There would be a big change in the asset values in the balance sheet from 2016/17 as highways assets would be valued in a different way (at current cost, rather than historic cost).

·         Note 4 – it was queried whether any mention of the ongoing issues with Agresso would be included in the accounts, and members were advised that this would not be included here.

·         It was noted that money from LEP contributions to county council schemes would be included in creditors paid.  It was clarified that any money spent by the LEP would not form part of the County Council's accounts.  Only funds that were paid to the council would be shown as an income to the Council.

·         It was noted that any surplus from council tax collection would be included in the budget book.  However, it was a relatively modest figure.  This figure would be larger in 2016/17.

·         Page 203 – this showed the breakdown of usable and unusable reserves.

·         It was not believed that the figures would be incorrect to the magnitude that the accounts would be affected.

·         Note 46 – there were no new contingent liabilities in 2015/16.

Pension Fund Accounts

·         There had not been much variation in the value of the funds from the previous year.

·         The Fire Fighters pension fund was unfunded, as it was part of a larger, national scheme.

·         It was acknowledged that officers had had difficulty in producing these accounts this year and it was queried how much work was left to do.  It was also commented that officers had done well to get the accounts to this stage.  Members were advised that members of the team were still working on some aspects of the accounts that would normally be finished by this time.  It was hoped that they would reach the minimum standard. 

·         Once these accounts had been completed the team would be starting to think about getting back to normal for 2016/17.

RESOLVED

            That the comments made in relation to the draft Statement of Accounts for 2015/16 be noted.