The Executive Director of Finance and Corporate Resources delivered a presentation on the subject of the audited statement of accounts 2016/17 (Appendix 1). During the delivery of this presentation a number of points were highlighted for Members’ consideration:
· Managers received updates on the budgets within their remit on a monthly basis, with figures being reported to Members every quarter.
· The statement of accounts had to be submitted in a particular way. The Council followed the CIPFA model when doing so.
· The Council had balances of £4.2 million. This position was considered to be good, with Members having previously set a limit of £1.1 million below which the balances could not fall.
· The Council’s balances were not considered to be unreasonable by the external auditors.
· The balances took into account funds that had been underspent in 2015/16.
· Reserves were set aside to be spent on specific projects.
· The total position for balances and reserves was £7.8 million.
· The Council did not have many capital receipts. As a consequence if the Council wanted to deliver capital projects it needed to borrow funds.
· In the event that the Council sold land or assets the funding from the sale could only be spent on capital projects.
· The local authority also had unusable reserves. These were assets which had a value that could not be accessed without selling the asset.
· The Council had a pension deficit of £42 million which distorted the position on unusable reserves
· The deficit position of the Council’s pension liabilities was comparable to many local authorities in the country.
· Every three years the actuary re-evaluated the contributions that the Council and staff needed to pay towards their pensions.
· The pension deficit was paid off in instalments over time.
· All Councils were trying to reduce their pension deficits but this could be impacted by factors outside the local authority’s control such as longevity and the return on pension investments.
· Whilst staff employed by each of the district Councils were part of Worcestershire County Council’s pension scheme the liabilities for the different Councils would vary according to the number of staff employed by the authority and the proportion of those staff who were paying into the pension scheme.
· If the Council’s pension deficit was excluded from the figures the local authority would be in credit with £26 million in usable reserves.
Following the presentation Members discussed a range of issues in detail:
· The incorporation of the Council’s strategic purposes into the presentation of the accounts.
· The meaning of the Council’s strategic purposes.
· The background to the development of the strategic purposes. The Executive Director of Finance and Corporate Resources explained that these had been approved by the Council approximately 3/4 years previously
· The need for the Council’s accounts to be reported in accordance with the Council’s priorities which were the strategic purposes.
· The potential for accounts listed in accordance with departmental spending to enhance Members’ awareness of problem areas as well as accountability.
· The Council’s pension liabilities and the fact that many companies in the private sector also had this problem.
At the end of the Committee’s discussions Members
RECOMMENDED that the Statement of Accounts 2016/17, including the Accounting Policies, be considered and the accounts approved by Council.