Public 1 PHR-1144 Agenda Item No DERBYSHIRE COUNTY COUNCIL
Total Page:16
File Type:pdf, Size:1020Kb
Public Agenda Item No DERBYSHIRE COUNTY COUNCIL AUDIT COMMITTEE 24 November 2020 Report of the Director of Finance & ICT STATEMENT OF ACCOUNTS 2019-20 1 Purpose of the Report To seek approval from the Audit Committee to the Post-Audit Statement of Accounts 2019-20. 2 Information and Analysis In response to the Covid-19 pandemic, the Ministry of Housing, Communities and Local Government has issued revised Accounts and Audit Regulations in respect of 2019-20 local authority accounts. The requirement for the public inspection period to include the first ten working days of June has been removed. Instead, the unaudited accounts of local authorities must be certified by the Director of Finance & ICT and published no later than 31 August 2020, with the public inspection period of six weeks commencing on or before the first working day of September 2020. The publication date for audited accounts, approved by the Audit Committee, has moved from 31 July to 30 November 2020 for all local authority bodies. The certified pre-audit Statement of Accounts were submitted to the Council’s external auditors, Mazars, on 8 June 2020, just eight days after the deadline in a normal year and well within the adjusted deadline for this year. At Audit Committee on 21 July 2020, a detailed presentation, followed by a Question and Answer Session, took place to explain the Statement of Accounts in more detail and to respond to any particular queries Members had. Under the Local Audit and Accountability Act 2014 (Sections 25 to 28), the Accounts and Audit Regulations 2015 (Regulations 10, 14 and 15) and the Accounts and Audit (Coronavirus) (Amendment) Regulations 2020, the Council’s accounts for the year ended 31 March 2020 and certain related documents (comprising books, deeds, contracts, bills, vouchers and receipts) were made available for public inspection from 9 June 2020 to 20 July 2020, Monday to Friday. No queries were received. 1 PHR-1144 Controlled The core financial statements in the Statement of Accounts are: Comprehensive Income and Expenditure Statement (CIES) Balance Sheet Cash Flow Statement Movement in Reserves Statement (MiRS) Pension Fund Accounts Annual Governance Statement The approved Statement of Accounts will be reported to full Council in February 2021. The Pension Fund Accounts will be reported to the Pensions and Investment Committee in December 2020. A copy of the audited Statement of Accounts is appended to this report at Appendix One. The audit opinions have yet to be inserted but will be included in the Audit Completion Reports of the external auditor presented at this meeting. The Annual Governance Statement will be presented in a further report at this meeting and will be inserted after the meeting, once approved. Details of changes made to the pre-audit Statement of Accounts are included at Appendix Two. The International Standard on Auditing ISA 580 requires the Council to provide a Management Representation Letter to the external auditors. The letter outlines the responsibilities of those charged with governance. Separate letters have been provided in respect of the Council’s Accounts and the Pension Fund Accounts. These letters are still to be finalised, but drafts are included at Appendix Three and Appendix Four, respectively. 3 Financial Considerations Details are set out in the report and appendices. 4 Legal Considerations The audited Statement of Accounts must be approved by the Audit Committee by 30 November in accordance with the Accounts and Audit Regulations 2015, as amended by the Accounts and Audit (Coronavirus) (Amendment) Regulations 2020. 5 Other Considerations In preparing this report the relevance of the following factors has been considered: prevention of crime and disorder, equality and diversity, human resources, environmental, health, property, transport and social value considerations. 2 PHR-1144 Controlled 6 Background Papers Papers held electronically by Technical Section, Finance & ICT Division, Room 137. 7 Officer's Recommendation That Audit Committee approves the Post-Audit Statement of Accounts 2019- 20. PETER HANDFORD Director of Finance & ICT 3 PHR-1144 Public Appendix One Public Statement of Accounts 2019-20 Peter Handford BA(Hons) PGCert FCPFA Director of Finance & ICT 1 PHR-1144 Version History Versio Date Detail Author n 0.1 14.10.20 Post-audit accounts changes E Scriven S Holmes 0.2 28.10.20 Post-audit accounts changes post E Scriven 14.10.20 S Holmes 0.3 10.11.20 Post-audit accounts changes post E Scriven 28.10.20 0.4 17.11.20 Included in Audit Committee Report for E Scriven 24 November 2020 meeting This document has been prepared using the following ISO27001:2013 standard controls as reference: ISO Control Description A.8.2 Information classification A.7.2.2 Information security awareness, education and training A.18.1.1 Identification of applicable legislation and contractual requirements A.18.1.3 Protection of records A.18.1.4 Privacy and protection of personally identifiable information CONTENTS PAGE Narrative Report 2 Statement of Responsibilities for the Statement of Accounts 25 Comprehensive Income and Expenditure Statement 26 Balance Sheet 27 Cash Flow Statement 28 Movement in Reserves Statement 29 Notes to the Core Financial Statements 30 Accounting Policies 114 Auditor’s Opinion - Derbyshire County Council Accounts 141 Pension Fund Accounts 145 Auditor’s Opinion - Pension Fund Accounts 202 Glossary of Terms 205 Contact Information 221 Annual Governance Statement 222 1 NARRATIVE REPORT Introduction This Statement of Accounts presents the overall financial position of the Council for the year ended 31 March 2020. It has been produced in compliance with the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Local Authority Accounting (the Code), based on International Financial Reporting Standards (IFRS). IFRS are made up of a combination of many individual accounting standards. This document also includes information relating to the Derbyshire Pension Fund, which the Council administers on behalf of its own staff, other local authorities and other admitted bodies. Basis of Preparation and Presentation When preparing the accounts, an authority need not comply with the Code, as to both disclosure and accounting principles, if the information is not material to the “true and fair” view of the financial position, financial performance and cash flows of the authority and to the understanding of users. Information is material if omitting it, or misstating it, could influence decisions that users make on the basis of financial information about a specific authority. The Accounting Policies of the Council have been prepared in accordance with IFRS, as adopted by the Code. Where there is no specific guidance in the Code, the Council has developed its own Accounting Policies, which are aimed at creating information which is relevant to the decision-making needs of users and reliable, in that the financial statements: represent fairly the financial position, financial performance and cash flows of the entity; reflect the economic substance of transactions, other events and conditions and not merely the legal form; are neutral i.e. free from bias; are prudent; and are complete in all material respects. The Council’s Accounting Policies outline how the Council should account for all income, expenditure, assets and liabilities held and incurred during the 2019-20 financial year. The Accounting Policies of the Council are updated annually to reflect any changes in IFRS, including changes in International Public Sector Accounting Standards (IPSAS), HM Treasury guidance, CIPFA guidance or any other change in statute, guidance or framework impacting on the Council’s accounts. The Accounting Policies of the Council, as far as possible, have been developed to ensure that the accounts of the Council are understandable, relevant, free from material error or misstatement, reliable and comparable. 2 NARRATIVE REPORT Explanation of the Accounting Statements which follow Comprehensive Income and Expenditure Statement (CIES) - This shows the cost of providing services in accordance with generally accepted accounting practices. Balance Sheet (BS) - This shows the value of all assets and liabilities. Reserves are matched against net assets and liabilities. Cash Flow Statement (CFS) – This statement shows the changes in cash and cash equivalents of the Council. Movement in Reserves (MiRS) – This shows the movement on the different reserves held, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure) and ‘unusable’ reserves. Notes to the Accounts – Not a statement, however they provide supplementary information. Performance Local authorities can present the CIES based on how an authority is organised and funded. The Council has presented its CIES on the basis of how it reports its management accounts during the financial year, which is by Cabinet Member Portfolio. The Council is structured into four departments but reports through seven Cabinet Member Portfolios. These portfolios are Adult Care, Corporate Services, Clean Growth and Regeneration, Health and Communities, Highways, Transport and Infrastructure, Strategic Leadership, Culture and Tourism and Young People. Revenue Expenditure The Council set its net budget requirement for 2019-20 on 6 February 2019 and originally planned to spend £519.532m, with funding coming in the form of Government non-ring-fenced grants of £161.444m, Council Tax of £329.430m, business rates collected locally of £19.195m and the use of Earmarked Reserves of £9.463m. In 2019-20 the Council has spent £539.583m, against a final net budget of £543.440m. The increase in net budget is because of additional net transfers from Earmarked and General Reserves of £10m, additional grant income of £12m (including Business Rates Relief Grant £6.357m, Winter Pressures Grant £3.627m and Independent Living Fund Grant £2.534m) and £2m additional business rates income. The table below summarises the Council’s outturn position, highlighting the Cabinet Member Portfolio net overspend and Corporate net underspend. The overall Council underspend for the year is £3.857m.