Agenda item

To consider a report by the Head of Finance and Assets (copy enclosed) presenting the Statement of Accounts 2012/13 for formal approval.

The Head of Finance and Assets (HFA) introduced the report (previously circulated) presenting the Statement of Accounts 2012/13 for formal approval.  The Audit of Financial Statements Report produced by the Welsh Audit Office (WAO) had also been attached to the report.

The HFA highlighted the significance of the document and the assurance provided by the WAO following their audit work.  He also took the opportunity to express his appreciation for the excellent work undertaken by the finance team.

The Chief Accountant (CA) delivered a presentation on the Statement of Accounts which provided –

·         an overview of the accounts and main financial statements

·         an outline of the processes involved including legislative requirements and timescales together with members’ role within that process

·         illustrated how particular figures reported in the Revenue Account had been reflected within the financial statements, and

·         highlighted key areas for attention including Movement in Reserves; Income & Expenditure Statement; Balance Sheet and Cash Flow Statement.

In closing the CA advised that no significant issues had emerged from the WAO audit which provided assurances in terms of process and compliance.

Mr. A. Veale, WAO referred to the WAO’s role within the overall process and their responsibility to report on the financial statements.  He presented an overview of the report findings with particular reference to the following –

·         the Appointed Auditor intended to issue an unqualified audit report once the Letter of Representation had been provided

·         a summary of the corrections made to the draft financial statement

·         there were no other significant issues arising from the audit

·         financial reporting and draft financial statements had been prepared to a high standard and no material weaknesses had been identified in internal controls

·         closure of the audit could not be certified until the WAO formally responded to correspondence received from the public in relation to the draft accounts.

In response to questions Mr. Veale elaborated upon the misstatements that had been corrected by management.  It was noted that although there were some large figures in terms of adjustment they were purely presentational and did not have a financial impact on the accounts.  Responding to concerns regarding the delay in certifying the accounts, Mr. Veale explained the basis of any public objection and subsequent procedures to investigate and respond to ensure closure of the audit as quickly as possible.  In terms of feedback there were elements of confidentiality and a report back was dependent on the findings of the investigation work.  Members noted that delays in certification were not uncommon and that other Welsh councils were in a similar position.

The CA responded to general questions regarding matters associated with the accounts in term of definitions used and specific budget lines including earmarked reserves.  In terms of governance the lack of local authority representation on the Boards of Related Companies who received council subsidies was highlighted and it was suggested it may be useful to revisit the Partnerships Framework.  It was agreed that the matter be put on the agenda for the next Governance Group meeting scheduled before the committee’s next meeting in November 2013. [IB to action]

The committee was satisfied that a high level of assurance had been provided in terms of the financial accounting process and compliance.  On behalf of the committee, the Chair thanked the finance officers for their hard work and diligence and the WAO officers for their input and report.  The committee agreed to continue with the practice of receiving the draft accounts in their June/July meeting in future years and to receive the WAO audit report alongside the accounts in September. [PM & RW to action]

RESOLVED that –

(a)       the Statement of Accounts 2012/13 as set out in Appendix 1 to the report be approved, and

(b)       the Chair and Chief Finance Officer sign the Accounts and the Letter of Representation. [JMc & PM to action]