Northumberland County Council is required to assess whether it should be considered as a ‘going concern’ organisation, and whether the Council’s annual accounts should be prepared on that basis. This report considers the Council’s status as a going concern and recommends that Members approve this.
Minutes:
Mr C Hand, Executive Director of Finance and Section 151 Officer, introduced the above report which considered the Council’s status as a going concern and recommended that Members approve this. The report related to the annual accounts for 2019-20 which were currently being reviewed by External Audit. The accounts were being prepared in line with the CIPFA code and were required to be prepared on a going concern basis on the assumption that the Council would continue to operate for the foreseeable future. The report outlined the rationale for that assumption.
Mr Hand said the Council provided a number of essential services for its residents, it had revenue and tax raising powers in order to fund those services, had a balanced budget, an MTFP which recognised and addressed any cost pressures and had a strong financial track record of identifying and delivering efficiencies and savings. The Council had prudent levels of reserves (attached as Appendix A) which should enable it to withstand any unexpected events. Whilst Covid 19 had impacted significantly on the Council both financially and operationally, it had continued to deliver all services throughout the pandemic and had received significant financial support from Central Government which would continue in the next financial year.
On the basis of those summary headlines, Mr Hand said it was recommended that the Council be considered as a going concern.
In response to a request from the Chair for further clarification, Mr Hand explained it was part of the process for the accounts to be prepared on a going concern basis in terms of how the balance sheets were prepared and assets valued. If a company or organisation was to wind up, the accounts would be prepared on a different basis. The Council was viewed as a going concern and the accounts had been prepared as such and would be reviewed by External Audit as part of their conclusion.
In response to questions from members the following information was provided:
Councillor Oliver wished to put on record the Administration’s thanks to the Finance Team for their phenomenal effort to keep the Council’s finances on track.
Upon a show of hands the recommendation, as set out in the report, was agreed and it was:
RESOLVED that the Council was considered to be a going concern and that the accounts were prepared on that basis.
Supporting documents: