To consider the report.

Members considered the Statement of Accounts 2016-17. 

The Chief Accountant commented that, as identified by KPMG, a valuation had been added to the asset register but had been saved as draft. Consequently when a report from the asset register was run the valuation was not included. A process had now been put in place to identify any draft items before reports were run. He explained that the EFA helped people understand balances in the income and expenditure accounts that were real money as opposed to accounting entries. An example of an accounting entry would be  the  depreciation of non current assets.

In response to questions, it was confirmed that:

·         The Dedicated Schools Grant was given to the local authority  to fund all maintained schools (not Academies) and central services in the Managing Director’s directorate, some of which would move to Achieving for Children. The amount of grant was reducing as more schools became Academies. The allocation of the grant was controlled by the Schools Forum. All Academies received funding directly form central government.

·         The Adult Social Care precept was treated in the same way as other council tax related items and did not fund specific services. For the sake of clarity the Head of Finance had to sign a document to clarify how the precept was used. The Head of Finance commented that there would be an opportunity to make this clearer in the narrative to the statement of accounts. Councillor Saunders commented that an appendix to the next Financial Update to Cabinet would be of use. It was important that people see the incremental revenues that had arisen as a result of the Adult Social Care levy and other specific Adult Social Care grant income and compare that to the incremental expenditure which the council had committed to Adult Social Care over the next few years. In overall terms this was expected to be in excess of £1m ahead of the incremental income to date.

·         Capital expenditure at schools was not often used for maintenance, although it was in some other areas such as road repairs.  Councillor E. Wilson suggested that this could be misleading to a reader of the accounts.

Councillor Smith welcomed the inclusion of 5-year trend information in relation to gross expenditure. He asked if this could be extended to other areas such as income. The Head of Finance agreed to look at this and suggested savings over a five year period would be an appropriate measure.

The Chief Accountant confirmed that unusable income was a depository  for non-cash accounting adjustments.

It was explained that the reduction in bad debt provision of over £1m was an assessment of council tax at year end and a provision made for the likely proportion not collected. Either debt had gone down or was newer debt, therefore there was no need for such a high provision.

The Chairman requested that the accounts be amended as requested and circulated to all Panel Members.

RESOLVED UANNIMOUSLY: That Audit and Performance Review Panel notes the report and:

i)                    Approves the audited accounts, a copy of which is signed by the chairman before 30^th September 2017, subject to amendments requested during the Panel discussion.