ITEM AU8
AUDIT COMMITTEE - 24 JUNE 2009
STATEMENT OF ACCOUNTS 2008/09
Report by the Assistant Chief Executive & Chief Finance Officer
1. The Accounts and Audit Regulations 2003 (as amended) require, by 30 June 2009, the Statement of Accounts for the year ending 31 March 2009 (Annex 1) (download as .doc file) to be considered by a committee of the Council and following that consideration, to be approved by a resolution of that committee. The Regulations also require that, following approval, the Statement of Accounts should be signed and dated by the chairman of the committee.
2. An overview of the financial position of the Council at 31 March 2009 is contained in the explanatory foreword to the Statement of Accounts.
Changes to the Statement of Accounts
3. The Statement of Accounts is prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2008 - A Statement of Recommended Practice (SORP). Unlike the previous two years, there are no substantial changes to the 2008 SORP. The most significant changes relate to Area Based Grant, the adoption of the 2007 Pension SORP for the Pension Fund accounts and additional disclosure requirements for retirement benefits in the notes to the core financial statements.
Area Based Grant
4. Area Based Grant replaced Local Area Agreement (LAA) Grant in 2008/09. LAA Grant was a specific grant included within service income. Area Based Grant is a non-ringfenced grant and is included within general government grants. This change in nature of the grant does not impact on the net deficit on the Income & Expenditure Account, but it does mean that the Net Cost of Services are £26m higher this year than they would have otherwise been.
2007 Pension SORP
5. The Local Authority Accounting SORP has been updated to reflect the 2007 Pension SORP, which replaced the 2002 edition. This has been updated to take account of Financial Reporting Standards 25 and 26 on financial instruments, requiring fair value valuation of investments and increased disclosure requirements. Quoted securities are now measured at bid price rather than mid-market value. This change in the basis of valuing pension scheme assets has also impacted on the pension liability disclosed in the County Council’s balance sheet.
Additional Retirement Benefit Disclosures
6. Financial Reporting Standard 17 on retirement benefits has been amended and now requires additional disclosure requirements around scheme assets and liabilities, the principal actuarial assumptions used and estimates of contributions expected to be paid in the period following the balance sheet date.
Impact of Market Conditions
7. The downturn in both the property and financial markets has had a significant impact on the net worth of the County Council and on the net assets of the Local Government Pension Fund. The impact of the downturn in the property market on the County Council can be seen from the reduction in tangible fixed assets on the balance sheet and this has flowed through to the Income & Expenditure Account as a large impairment charge to services resulting in a large deficit. The impact of the downturn in the financial markets on the County Council can be most readily seen from the increase in the pension liability by almost half as much again.
Summary Accounts
8. The Annual Report 2009, which provides an overview of the previous year highlighting the County Council’s achievements and successes, is being submitted to Cabinet for approval on 23 June 2009. The Summary Accounts (Annex 2)(download as .doc file) will be included in the Annual Report following the approval of the Statement of Accounts by this Committee.
9. Any questions of detail that members of the Committee may have regarding the accounts can be raised with Stephanie Skivington, Strategic Finance Manager (Financial Accounting & Reporting) (Tel. 01865 797443).
RECOMMENDATION
10. The Committee is RECOMMENDED to:
(a) consider and approve the Statement of Accounts for 2008/09 (signed by the Chairman of the Committee) for submission to the Auditor; and
(b) note the Summary Accounts 2008/09 for inclusion in the Annual Report 2009.
SUE SCANE Assistant Chief Executive & Chief Finance Officer
Background Papers: Nil
Contact Officer: Stephanie Skivington, Strategic Finance Manager (Financial Accounting & Reporting) Tel: (01865) 797443 June 2009 |