Agenda item

The Committee considered a report which set out the Council’s unaudited Statement of Accounts for the 2021/22 financial year. The report highlighted the overall position for the year, a summary accounts closure timetable and information relating to the Council’s performance, including improvements achieved in terms of accuracy and quality of the accounts. Details of the key changes to the accounts were set out at paragraphs 16 to 36 and Appendices A-D of the report.

In accordance with the Accounts and Audit (Amendment) Regulations 2021, the publication date of the unaudited 2021/22 accounts had been extended from 31st July to 30th September 2022 for all local authority bodies.  In December 2021, the Department of Levelling-up, Housing and Communities, announced an intention to further extend the deadline for publication of the audited statement of accounts to 30th November 2022.

The Chief Financial Officer and Assistant Director of Finance provided a brief overview of the report. She highlighted the importance of the draft accounts being presented to the Committee at an early stage in line with good practice guidance. It was noted that dedicated training on the accounts had been provided to Members of the Audit Committee in order that the Committee had sufficient time to understand and review the statements, and provide the opportunity to ask questions. The unaudited Statement of Accounts was published on the Council’s website on 6th July 2022 and provided to the Council’s External Auditor Grant Thornton. The Chief Financial Officer and Assistant Director of Finance wished to place on record her thanks to the Financial Management team for completing the draft accounts in challenging circumstances and in meeting the statutory deadline.  The Financial Planning and Control Manager was also in attendance to respond to Members questions.

In answer to questions from Dr Green, it was noted that nothing unexpected or of particular concerns had come to light when producing the accounts other than the impact from Covid-19 from the previous year.  In relation to the sufficiency of the balance position of the Council’s General Fund reserves, Members were informed that Doncaster was in an extremely positive year-end position and based on Grant Thornton’s Value for Money report issued in February 2022, which was considered by the Committee at its meeting in April, had provided comparative information in relation General Fund Balance reserves of other local authorities, which had found that Doncaster was in the top quartile of all local authorities in the country.  An undertaking was given to provide Dr Green and Members of the Committee, with a copy of the report for comparative purposes.  Members noted that the Internal Audit team would be reviewing CIPFA guidance in the future. The General Fund Balance Reserves would also be reviewed as part of the budget process and the Section 151 Officer would consider whether the reserves were reasonable and sufficient. 

Arising from concerns raised by Councillor Healy regarding future potential cost pressures and the impact on the Council’s budget and implications for the Council post Brexit and given the potential rise in energy costs which was increasing and the rise in inflation, the Director of Corporate Resources highlighted the challenges posed as a consequence of Brexit and made reference to the difficulties in the Council recruiting to the workforce in some areas of the Council which was attributed to a reduced active workforce as EU citizens, that had worked in the UK had since left the UK. Therefore, there was a skills shortage, and also the costs in relation to construction and problems in the supply chain. 

With regard to inflation and in response to question from the Chair whether there would be any material changes to the accounts from the figures reported as at 31st March 2022, up until the accounts being finalised in October, Members were advised that the Council needed to be assured that following an evaluation of the final accounts in October, that there had been no material changes to the original figures as at the end of March due to inflation and other factors. It was noted that the main areas where there may be potential changes were figures relating to the Council’s pension and property plant and equipment valuations. The Council was currently working to try to quantify the impact of inflation in the next financial year 2022/23, and in future years in order that they could plan and prepare for any potential changes to the budget. The Council was currently drafting the Quarter 1 Finance and Performance report which would be reported to Cabinet in September, and it was likely that there would be inflationary pressures. The Medium Term Financial Strategy would be reviewed in the autumn to take into account of the recent changes in inflation and its impact.

Further to questions from the Chair, the External Auditor confirmed that he was confident to be in a position to sign off the accounts by the statutory deadline of 30th November 2022, subject to there being sufficient resource in the team. He spoke of the continuing challenges faced by both the public sector and Eternal Auditors in recruiting staff. It was noted that the ISA 60 report would be presented to the Committee in October prior to the completion of the audit of the accounts in November.  The External Auditor advised that no significant problems had been identified in any areas of their work on the accounts to date, and that it was at an early stage in the audit process to be able to provide a judgement on the Council’s arrangements in relation to the production of the accounts, and the quality and reliability of the working papers. However, he welcomed the draft accounts being provided in advance of the national deadline which was a credit to the Chief Financial Officer and Assistant Director of Finance and Financial Management Team.

RESOLVED that:-

(1)      the 2021/22 draft Statement of Accounts be noted’ and

(2)      it be noted that the Committee was satisfied with the responses in the ‘Informing the audit risk assessment for Doncaster Metropolitan Borough Council 2021/22’ report.