Agenda item

(1)        Final Statement of Accounts 2019-20

The purpose of this report is to seek the Committee’s approval of the final statement of accounts for the financial year ended 31 March 2020.

(2)        Statement of Accounts - Group Boundary Review  

The purpose of this report is to provide members of the Audit Committee with details of the boundary review which has been undertaken to determine those organisations which should have their financial statements consolidated with the Council’s Statement of Accounts for the financial year ended 31 March 2021.  Particular consideration is given to the position of Active Northumberland.

(3)        Pension Fund Annual Report and Accounts 2019-20

The purpose of this report is to provide the Audit Committee with an update related to the Council’s 2019-20 Pension Fund Annual Report and to assist Members in carrying out their role in reviewing the Financial Statements.

(4)        Annual Report of the Firefighters’ Pension Scheme

Local Pension Board 2020-2021

To receive the above report.

(1)      Final Statement of Accounts 2019-20

The report sought the Committee’s approval of the final statement of accounts for the financial year ended 31 March 2020.

The S151 Officer presented the report. These were the final statement of accounts which incorporated all of the audit adjustments which Ms Murray had referred to. She reminded members that the external auditor’s opinion came in two parts. The audit completion report made it clear that they were happy with the amended accounts. Regarding the VFM opinion, none of the issues which were still under consideration had any bearing on the financial statements, and on that basis, her advice to the Committee was that there was no reason why the financial statements could not be signed off today. Failure to do that would have quite significant knock-on effects, not least it would further delay the finalisation of the draft accounts for 2020-21. Also, because the pension fund accounts formed part of the overall Council accounts, failure to approve would have implications for every Council involved in the regional pension fund. She understood the points which had been raised about VFM matters and that some of these were related to ongoing issues, but she was hopeful having discussed it with Cameron, that these would be concluded in time for the September meeting. She therefore respectfully asked members to sign off the accounts as there would be far reaching implications otherwise, and there was no reason not to do so. 

The Chair summed up the advice to members was that the risk of not approving the accounts was much higher than approving, not just to the Council but other Councils in the area.  

Councillor Oliver commented that he had concerns about the outstanding VFM issues but sought confirmation that by approving the accounts he would not be saying that there were no outstanding VFM issues. The S151 Officer confirmed that approving the accounts today had no bearing on the outstanding VFM issues which Cameron was considering. Councillor Oliver sought clarification that none of that work would affect the financial position in the accounts and the VFM work would continue. He queried whether this work could result in a qualified opinion. The S151 Officer advised that approving the accounts today would not in any way impinge on the VFM work and the opinion the external auditor would issue in due course. Conversely, none of the VFM issues which were under consideration would affect the financial statements. There was no interaction between the two opinions. 

Councillor Cessford queried the property plant and equipment valuations mentioned previously and asked why the valuer was being replaced if there was no blame attached to the previous issues, or whether this was standard procedure. The S151 Officer advised that the contract was due to be retendered anyway but there were issues with the approach that the previous valuer had adopted and the scope of that work. These were being addressed in the specification for the new contract.

Councillor Oliver queried the £361,000 salary arrears paid to the coroner and how this had happened as it was a significant sum. The S151 Officer advised that this was a backdated pay claim that had arisen from a job evaluation. 

Councillor Cessford queried why the external audit costs had increased so much from one year to the next and what were the fees payable for other services. The S151 Officer advised that she would provide a written response. 

Councillor Jackson advised that he would abstain from voting because the accounts were very late and did not come with the auditor’s value for money opinion. 

RESOLVED that the Statement of Accounts for the Council for the financial year ended 31 March 2020 be approved.

(2)      Statement of Accounts - Group Boundary Review??

The report provided members of the Audit Committee with details of the boundary review which had been undertaken to determine those organisations which?should have?their?financial statements consolidated with the Council’s Statement of Accounts for the financial year ended 31 March 2021.? Particular?consideration was?given to the position?of?Active Northumberland.

The report was presented by the S151 Officer. Members were being asked to note the position only. 

Mr Topping asked about Active Northumberland agreeing to establish two committees which now seemed to have been rolled into one, and whether the S151 Officer was content with that. She replied that Active Northumberland was not part of the Council and this was the conclusion the boundary review had come to so it was not for her to dictate what their governance arrangements should be. She had no issue with the fact that finance and audit committee had been merged. 

RESOLVED that:-

(a)      the contents of the report be noted;

(b)      Audit Committee note that the financial statements of Advance Northumberland Limited will continue to be consolidated with the Council’s Statement of Accounts for the financial year ended 31 March 2021;

(c)      Audit Committee note that Arch (Corporate Holdings) Limited remained dormant in financial year 2020-21 and was dissolved on 10 November 2020.  As a result of this there were no figures to consolidate.  A note to this effect would be included in the Council’s Statement of Accounts;

(d)      Audit Committee note that Northumberland Enterprise Holdings Limited remained dormant during the financial year 2020-21.  As a result of this there were no figures to consolidate.  A note to this effect would be included in the Council’s Statement of Accounts.  Once Northumberland Enterprise Holdings Limited commences trading it was envisaged that its financial statements will be consolidated with the Council’s Statement of Accounts; and

(e)      Audit Committee agree that Active Northumberland’s financial statements should not be consolidated with the Council’s Statement of Accounts for the financial year ended 31 March 2021.

Councillor Oliver declared a non-pecuniary interest in the following two matters and advised he would not take part in the debate.  

(3)      Pension Fund Annual Report and Accounts 2019-20

The purpose of this report was to provide the Audit Committee with an update related to the Council’s 2019-20 Pension Fund Annual Report and to assist Members in carrying out their role in reviewing the Financial Statements.

RESOLVED that the Pension Fund Annual Report and Accounts 2019-20 be approved.

Councillor Jackson declared a non-pecuniary interest in the following matter and advised he would not take part in the debate. 

(4)      Annual Report of the Firefighters’ Pension Scheme Local Pension Board 2020-2021

Members were asked to receive the above report.

RESOLVED that the annual report be received.