CITY OF BRADFORD METROPOLITAN DISTRICT COUNCIL STATEMENT OF ACCOUNTS 2019-20 AND ANNUAL GOVERNANCE STATEMENT Contents Page FOREWORD AND STATEMENT OF RESPONSIBILITIES .................................................................2 THE NARRATIVE REPORT ........................................................................................................……10 MAIN FINANCIAL STATEMENTS Movement in Reserves Statement............................................................................................18 Comprehensive Income and Expenditure Statement ...............................................................19 Balance Sheet...........................................................................................................................20 Cash Flow Statement................................................................................................................21 Notes to the Main Financial Statements ...................................................................................22 SUPPLEMENTARY FINANCIAL STATEMENTS Collection Fund Statement and Explanatory Notes ..................................................................89 West Yorkshire Pension Fund and Explanatory Notes .............................................................92 GLOSSARY OF TERMS...................................................................................................................122 ANNUAL GOVERNANCE STATEMENT ..........................................................................................130 1 Foreword and Statement of Responsibilities Introduction to the Council’s Statement of Accounts The Council’s financial statements are set out in the pages following this foreword. They consist of the following: 1. The Narrative Report The Report by the (Interim) Director of Finance summarises the most significant items reported in the accounts and outlines the overall financial position of the Council for 2019-20. The money spent by the Council and where the money comes from is shown in a series of charts. There is a distinction between revenue spending (the annual cost of providing services) and capital expenditure, which has a long-term benefit for the citizens of the Bradford district. 2. Movement in Reserves Statement This Statement shows the movement in the year on the different reserves held by the Council, analysed into “usable reserves” (i.e. those that can be applied to fund expenditure) and other reserves. 3. Comprehensive Income and Expenditure Statement The cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded in accordance with statute. The Council raises tax, and uses grants and other flows of income to cover the cost of services. The statutory financial result is shown in the Movement in Reserves Statement. This is different to the cost of services stated in accordance with generally accepted accounting practice, as shown in the Comprehensive Income and expenditure account. 4. Balance Sheet The Balance Sheet shows the value at the Balance Sheet date of the assets and liabilities recognised by the Council. 5. Cash Flow Statement The Cash Flow Statement shows the changes in cash and cash equivalents (short term investments of three months or less) of the Council during the reporting period. 6. Statement of Significant Accounting Policies The Council’s accounts follow International Financial Reporting Standards (IFRS) since the 2010-11 financial year. The accounting policies set out the specific principles, bases, conventions, rules and practices applied by the Council in preparing and presenting the financial statements. The accounting policies are based on interpretations and adaptations for the public sector set out in the CIPFA (Chartered Institute of Public Finance and Accountancy) Code of Practice on Local Authority Accounting in the United Kingdom (the Code). 7. Notes to the Main Financial Statements The notes disclose information required by the Code and information that makes the accounts easier to understand. They show the specific accounting policies and estimates used and breakdowns of figures shown in the main Financial Statements. 8. Collection Fund Statement The Collection Fund is an agent’s statement that reflects the statutory obligation for billing authorities to maintain a separate Collection Fund. The statement shows the transactions of the billing Authority (Bradford Council) in collecting Council Tax and non domestic rates and distributing it to major preceptors and the Government. 9. The Group Accounts As the Council does not have any material interests in subsidiaries, associates and jointly controlled entities it is not required to produce a set of Group Accounts. 10. The Pension Fund Account As the Council is the administering authority for the West Yorkshire Pension Fund, the activities of the fund are required to be reported alongside the Council’s main Financial Statements. 11. Glossary of Terms In order to help readers, a Glossary of Terms widely used in relation to local authority finance and referred to within these accounts is included at the back of the document. 12. Annual Governance Statement The Council is required to undertake an annual review of the effectiveness of its governance framework and system of internal control. The conclusions of this review are reported alongside the accounting statements. 2 Foreword and Statement of Responsibilities Notes to the Main Financial Statements Note No Note Page No. Note 1 Statement of Significant Accounting Policies 22 Note 2 Prior Period Adjustments 34 Note 3 Accounting Standards not yet adopted, Critical Judgements and Assumptions and Estimation 34 Note 4 Adjustments between accounting basis and funding basis under Regulations 37 Note 5 Transfers to/from Earmarked Reserves 38 Note 6 Exceptional Items 39 Note 7 Post Balance Sheet Events 40 Note 8 Analysis of the Comprehensive Income and Expenditure 40 Note 9 Property, Plant and Equipment: Movement on Balances 41 Note 10 Valuations 43 Note 11 Capital Commitments and Obligations Under long Term Contracts 43 Note 12 Heritage Assets 44 Note 13 Investment Property 45 Note 14 Intangible Assets 46 Note 15 Construction Contracts 47 Note 16 Long Term Investment 47 Note 17 Long Term Debtors 47 Note 18 Current Assets and Current Liabilities 47 Note 19 Assets held for sale 48 Note 20 Provisions 49 Note 21 Unusable Reserves 50 Note 22 Cash Flow Statement 53 Note 23 Expenditure Funding Analysis 55 Note 24 Acquired and Discontinued Operations 59 Note 25 Trading Services 59 Note 26 Revenue from Contracts with Service Recipients 59 Note 27 Road Charging Schemes 59 Note 28 Pooled Budgets Arrangements Under Section 31 of the Health Act 1999, and Section 75 of the 60 Health Act 2006 Note 29 Termination Benefits 60 Note 30 Pension Schemes Accounted For As Defined Contribution Schemes 60 Note 31 Defined Benefit Pension Schemes 61 Note 32 Members’ Allowances 67 Note 33 Employees’ Remuneration 67 Note 34 Capital Charges and the Repayment of External Loans 71 Note 35 Leases 72 Note 36 Private Finance Initiative (PFI) 74 Note 37 Capital Expenditure and Financing 76 Note 38 Revenue Expenditure Funded From Capital Under Statute (REFCUS) 76 Note 39 Other Long Term Liabilities 76 Note 40 Deferred Income 77 Note 41 Related Party Transactions 77 Note 42 External Audit Costs 79 Note 43 Dedicated Schools Grant (DSG) 80 Note 44 Contingent Liabilities and Assets 81 Note 44b Financial Guarantees 85 Note 45 Grant Income 82 Note 46 Impairment Losses 82 Note 47 Financial Instruments 83 Note 48 Trust Funds and Custodial Money 88 3 Foreword and Statement of Responsibilities City of Bradford Metropolitan District Council's Statement of Responsibilities The Council is required to: Make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of those affairs. In this Council, that officer is the Director of Finance & IT. Manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets. Approve the Statement of Accounts. Director of Finance Responsibilities The Director of Finance & IT is responsible for the preparation of the Council's Statement of Accounts in accordance with proper practices as set out in the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom (the Code). In preparing this Statement of Accounts, the Director of Finance & IT has: Selected suitable accounting policies and applied them consistently. Made judgements and estimates that were both reasonable and prudent. Kept proper and up to date accounting records. Taken reasonable steps for the prevention and detection of fraud and other irregularities. Complied with the Code of Practice on Local Authority Accounting. In addition he has issued: A manual on the practices to be adopted in the preparation of the Council’s year end accounts. Various corporate standards giving guidance on specific accounting issues. The financial statements are subject to audit by the Council’s external auditors. Certification of the Statement of Accounts I certify that this statement of accounts presents a true and fair view of the financial position of the Council at 31 March 2020 and its income and expenditure for the year; and of the West Yorkshire Pension Fund. I authorise for issue the 2019-20 Statement of Accounts. Signed: Cllr Michael Johnson Chair Governance and Audit Committee Date: 26 November 2020 Signed