Agenda item - Draft Statement of Accounts 2020/21 and Draft Annual Governance Statement 2020/21

Agenda item

Draft Statement of Accounts 2020/21 and Draft Annual Governance Statement 2020/21

Report of the Interim Corporate Dirctor of Finance and Resources

Minutes:

Theresa Channell, Head of Strategic Finance, introduced the report presenting the draft statement of accounts for 2020/21 for publication and updating the committee on outstanding issues. Along with Susan Risdall, Team Leader – Technical Accounting they highlighted the following points:

 

(a)  Due to the Covid-19 pandemic the deadline for account publication of draft accounts has been extended to 31 July 2021. Deadline for completion of accounts has been moved to 30 September 2021;

 

(b)  The delay to the 18/19 accounts, and subsequently the 19/20 accounts will have a knoc-on effect for the 20/21 accounts. The outstanding issues are the same as for 19/20, requirement for valuation of specials assets and the incomplete accounts of Robin Hood Energy (RHE);

 

(c)  The draft accounts have been prepared for publication by the deadline together with a statement that the accounts are not complete due to asset valuations and issues around RHE accounts. Once these two issues have been addressed, the accounts will be signed off by the S151 Officer and the Public Inspection period will begin. Discussions with the external Auditors of Robin Hood Energy and with Grant Thornton are ongoing to establish the best way to present accounts information for Robin Hood Energy for 20/21;

 

(d)  An action plan has been created to address comments and issues raised by Committee members, these actions are mostly covered by the R&IP  and associated action plan;

 

During discussion, the following information was highlighted:

 

(e)  A total of 75 specialist assets require further valuation. There is a very limited number of professionals in the country who are able to carry out the required work and they are in demand across the sector. There is no indication at present when they will be able to complete this work for Nottingham City Council. An update will be circulated to committee members once a timescale is established;

 

(f)  Nottingham City Council has been in discussion with Grant Thornton around the best way to present the incomplete account information from RHE for 20/21. Grant Thornton need to consult with their technical accounting team to ensure that the proposed strategy will be sufficient before Nottingham City Council considers engaging MacIntyre Hudson to complete further work on the RHE accounts;

 

(g)  The issues with the RHE accounts for 19/20 and 20/21 are slightly different. The 19/20 accounts are complete but were prepared on a going concern basis. The accounts for 20/21 are not complete as the company went into administration;

 

(h)  The issue for the Council is how to get assurance that the numbers in to 19/20 accounts are correct. MacIntyre Hudson have access to the accounts  but are not currently under any obligation to provide any assurances.  The 20/21 accounts are incomplete as they were not prepared before the end of the accounting period before the company broke up;

 

(i)  To address this issue NCC Finance are putting together a proposal to move forward that will be considered by the technical accounting team at Grant Thornton, who will take advice from the accounting body and respond to NCC as soon as they have reached a conclusion;

 

(j)  NCC Finance have taken specialist advice on this matter from CIPFA. All parties recognise that this is a very unusual situation and that there is no precedent to follow. This comes as a result of the materiality of the company accounts for NCC group accounts and the timing of the company break up. There are no similar situations from other local authorities in the past to refer to;

 

(k)  Other than the issue with specialist asset valuation and how to treat the RHE accounts within NCC Group accounts, the Draft Statement of Accounts is materially complete and will be publishes by the deadline of 31 July 2021;

 

(l)  Committee members commented that training on the Statement of Accounts was still outstanding. Finance colleagues confirmed that the plan was for this to take place closer to the publication of the final Statement so that it was fresh in Committee members minds when considering the final document;

 

(m)Committee members asked that more acknowledgement of the impact of Covid-19 was included within the draft Annual Governance Statement, along side more information around Housing and the current waiting list for council housing and the impact of austerity;

 

(n)  Additional information was also requested on the StreetScene service, how standards have changed and staffing has been allocated following further cuts to services as a result of Government funding reduction;

 

(o)  Feedback has already been provided by some committee members in relation to the Annual Governance Statement to the Head of Audit around issues such as Broadmarsh project, the Car park and central library project and the completion of the College Hub;

 

(p)  Delivery of Transformation, as part of the Recovery and Improvement plan, is being managed and overseen across the Council following the recent appointment of a Programme Manager, who is developing a comprehensive programme of change. This will include deliverables and ensure that transformation is “cashable”;

 

(q)  The role of this committee is to ensure that the correct processes are in place and that outcomes are delivered. It is essential that savings made through transformation are not absorbed into individual departments. Savings as a result of transformation work are clearly included within the Medium Term Financial Plan. Further details of this work will be analysed by the Working Groups;

 

(r)  As service plans are updated and transformed, budgets are tracked through the Programme Board offering full transparency on savings made. This is then fed back into MTFP.

 

Resolved to:

 

(1)  Note the progress of the draft 2020/21 Statement of Accounts; and

 

(2)  Note draft 2020/21 Annual Governance Statement and the expectation of an updated Annual Governance Statement to be brought to a future committee meeting reflecting the suggestions of this committee, alongside the final statement of Accounts for 2020/21. 

Supporting documents: