Agenda item

The Head of Finance advised that officers were seeking delegation from the Committee to sign off the draft accounts and to be able to make any further amendments to them prior to the next meeting but as the version of the accounts was only published today and as the Committee would not have had time to review them and it would not cause any significant further delay that a fully completed set of accounts be brought back to the Committee on 29 September and that they be signed there.  What the Committee do need to agree tonight is the Annual Governance Statement in relation to 2021/22. 

The Chair proposed, duly seconded, that the consideration of the 2019/20 Statement of Accounts be deferred to the September Committee meeting but that the Committee approve the Annual Governance Statement 2021/22 and to noted that the Director of Finance will authorise for issue a Draft Statement of Accounts 2021/22 for public inspection by 31 July 2022.

In response to a Member question on not signing off the 2019/20 accounts yet the Head of Finance advised that there is potential reputational damage but we are not the only LA to have their audit outstanding.  As outlined by the external auditor there had been a number of issues around fixed assets valuations which all LA’s had seen additional scrutiny around for their 19/20 accounts because there was a concept of material uncertainty around the year end date.  At the valuation date of 31 March 2020 Covid had just hit and we were in a lockdown world with significant uncertainty.  Valuers were therefore of the view that they could not have the usual level of confidence in their assumptions and resulting valuations.  As a result audit firms had to take a more detailed valuation approach and what had been uncovered was that some of the valuations were incorrect and some of the techniques used by the valuers were incorrect.  Some of the issues around classification and valuation methodology had also gone unseen for a number of years and had not been picked up over a period of time.  At the time there was also a change in audit practice where there was a lot more focus on fixed asset registers as well.  On the pension fund issue all Hertfordshire Authorities that are part of Herts Building Control all had the same issue in that the actuary made a mistake in the preparation of the actuarial valuation.  They assigned the pension liabilities of HBC to the originating authorities although they were not instructed to do.  All the Herts Authorities who are members of HBC are needing to deal with this issue.  Those who had already signed their 2019/20 accounts would need to deal with it as part of the 2020/21 audit.  There was a further consideration in the Hertfordshire Pension Fund (HPF) accounts where misstatements have been identified by the Pension Fund auditor.  HPF chose to correct some of the material misstatements and therefore a revised IAS19 report was issued by actuary. However, the proportion of uncorrected misstatements have that is allocated to TRDC is above the TRDC external audit reporting threshold, and therefore need to further adjusted for or reported. This is a common issue for all authorities in the HPF.

On the SOI management have had to go back to our external valuers and to respectively seek valuations.  Management are still waiting to receive these but are confident will get these completed by early September and will then organise a further briefing for Members on the accounts before the Committee meeting.

Management currently have 3 years of accounts open all at one time.  The 2020/21 accounts were published last July but will need to be updated to reflect all the adjustments agreed for 2019/20.  However management are hopeful they will be ready for the Audit of them from 17 October.  Although they are behind they still need to meet the statutory timetable for 2021/22 and get the accounts published by the end of July and will send Members a link to those accounts.  They hope to have the 2020/21 audit plan for the September Committee. 

The Head of Finance advised that Local Authorities are required to prepare an Annual Governance Statement (AGS) to be transparent about their compliance with good governance principles. This included reporting on how they had monitored and evaluated the effectiveness of their governance arrangements in the previous year and setting out any planned changes in the coming period.  The AGS must be published alongside the Statement of Accounts for the period of Public Inspection.  Based on the information set out in the AGS, the following conclusion is included:

“It is our opinion that the Council’s governance arrangements in 2021/22 were sound and provide a robust platform for achieving the Council’s priorities and challenges in 2022/23. It is our opinion that this has remained the case during the COVID-19 pandemic; and that despite the challenges posed by this, the Council’s governance in dealing with the pandemic and our ability to maintain sound governance during the outbreak, has been effective.”

The Head of Finance advised that a self-assessment against the FM Code for 2021/22 had been completed and included as Appendix 2 to the AGS.  All areas covered by the FM Code are rated green with the exception of the assessment against external reporting requirements in relation to the completion of the annual Statement of Accounts.  This is rated amber in recognition that the delay in completing the audit of the accounts for 2019/20 and 2020/21 had impacted on the timeliness of external reporting.  As set out in this report, there is a clear plan in place with the Council’s external auditors to bring this back on track by April 2023. 

On being put to the Committee the motion to defer the 2019/20 Statement of Accounts to the September meeting was declared CARREID by the Chair the voting being by general assent.

                     RESOLVED:

·         That the consideration of the draft Statement of Accounts 2019/20 be deferred to 29 September 2022 meeting.

In relation to the 2021/22 Statement of Accounts:

·         approve the Annual Governance Statement 2021/22

·         note that the Director of Finance will authorise for issue a Draft Statement of Accounts 2021/22 for public inspection by 31 July 2022.