Agenda item

1.30 p.m.

Report by the Director of Finance.

This report sets out the approach taken to the preparation of the 2020/21 Statement of Accounts.

The Committee is RECOMMENDED to:

a)    note the proposed timetable for the 2020/21 Statement of Accounts and external audit

b)   ratify the accounting policies as approved by the Chief Finance Officer and included as an appendix to this report

Hannah Doney, Head of Corporate Finance introduced the Statement of Accounts 2020/21 which sets out the approach taken to the preparation of the 2020/21 Statement of Accounts, including the proposed timetable for the 2020/21 Statement of Accounts and external audit taking into account the consultation of amendments to the Accounts and Audit Regulation and the processes around this. 

Hannah Doney further highlighted that the draft regulations, currently under consultation, seek to remove the fixed period for public inspection of the accounts from 31 May to on or before 1 August, however as set out in this paper, we are aiming to complete the draft accounts by early June, of which a link will be sent to this Committee upon publication, with the external audit commencing in early June to be approved at the Committee meeting in July or September.

Hannah Doney responded to Members’ questions as follows:

·         The School and Early Years Finance (England) Regulations 2020 came into force on 21 February 2020 and are applicable to the 2020/21 accounts, and these further stipulate that a deficit on the Dedicated School Grant (DSG) must be carried forward to be funded from future DSG income.  The Council has a deficit on the DSG and therefore will be treated on the balance sheet as a negative balance, rather than held within the Council’s total Earmarked Reserves.  This is not a unique position for OCC, as a lot of local authorities with a responsibility for schools have a deficit on their High Needs Block funding.  Lorna Baxter, Director of Finance advised that this is a cash problem, which does not solve the issue and is something that she will be lobbying for in her position as President for the Society of County Treasurers.

·         The going concern for local authorities is different than that for private companies, however due to legislative changes and the impact of COVID, there has been a change of focus from the auditors and they now require more information of our going concern.  This is forecast for the next 12 months, and that information has been included in our budget preparation.

·         The forecast deficit has not changed from the previous year and are expecting a similar deficit for the 2021 accounts, therefore the backlog of EHCPs was built into that forecasted projection, and there is not sufficient evidence to suggest that this figure will reduce in the next few years.

·         Current rules do not allow Councils to use general funds to offset the High Needs deficit, therefore capitalisations that have been sought by and agreed for other Councils are more for their sustainability in their general funds rather than High Needs deficit.

·         The implementation of IFRS 16 Leases has been delayed until 1 April 2022, however work we had begun this year will put us ahead, but these will need to be revalued prior to inclusion on the balance sheet.

RESOLVED to

(a)  note the proposed timetable for the 2020/21 Statement of Accounts and external audit

(b)  ratify the accounting policies as approved by the Chief Finance Officer and included as an appendix to this report.