Agenda item

2.10 p.m.

Report by the Director of Finance.

This report sets out the latest position on the preparation and audit of the 2020/21 Statement of Accounts including:

·                     Authorisation of the Draft Accounts and Period of Public Inspection

·                     Progress on the external audit

·                     Agreed amendments to the draft Statement of Accounts

·                     Conclusion of the audit

The Committee is RECOMMENDED to

(a)  Consider and approve the Statement of Accounts 2020/21 at Annex 1;

(b)  Consider and approve the Letter of Representations 2020/21 for the Oxfordshire County Council accounts at Annex 2;

(c) Consider and approve the Letter of Representations 2020/21 for the Oxfordshire Pension Fund accounts at Annex 3;

(d) Agree that the Director of Finance, in consultation with the Chair of the Committee (or Deputy Chair in their absence), can make any further changes to the Statement of Accounts 2020/21 and letters of representation that may arise during completion of the audit.

Please note that Annex 1 – Statement of Accounts 2020/21 will follow as a separate addendum.

Hannah Doney, Head of Corporate Finance introduced the report which set out the latest position on the preparation and audit of the 2020/21 Statement of Accounts including:

·         Authorisation of the Draft Accounts and Period of Public Inspection

·         Progress on the external audit

·         Agreed amendments to the draft Statement of Accounts

·         Conclusion of the audit.

Hannah Doney further highlighted that the following:

·         The draft Statement of Accounts were authorised for issue on 24 June 2021 and published alongside the Annual Governance Statement on the annual accounts and audit page of the County Council’s website.  The period of public inspection commenced on 25 June 2021 and will conclude on 6 August 2021 after 30 working days.

·         The external audit commenced on 7 June 2021, however due to a delay in receiving the data collection tool kit released by central government, work on the Whole Government Accounts has not yet started.

·         If unadjusted differences arise these are reported via the Letter of Representations, which will include the management’s rationale for not correcting the misstatement which must be approved by this Committee or by approved delegation.

·         A recommendation has been raised in respect of journal authorisation via the Council’s self-service finance model, which has been in place since 2015.  Our understanding is that this has also been raised at Hampshire County Council, they chose to tolerate that risk, however we will look at how we can address this through training with managers.

Hannah Doney and Lorna Baxter, Director of Finance proceeding to respond to Members’ queries as follows:

·         The responsibility for constructing new schools and expansion of existing schools lies with the Council, however the statutory power to open a new school lies with the academy trust.  Therefore, we do carry this risk, and Section 106 funding and government funding from developers is rarely enough to cover all of these costs, however this has not been an issue in Oxfordshire to date.  Further analysis of the capital programme would supply this information and can be provided if requested.

·         We are consistent in our accounting treatment of spend on academy schools.  Where a school is under licence and already operating under the academy trust, expenditure is written out as REFCUS (Revenue Expenditure Funded by Capital Under Statute) in the year the expenditure occurs as the school is not the Council’s asset.

·         The difference shown between the 2019/20 and 2020/21 remeasurement of the net defined benefit liability (asset) is contributed to the adjustments made by the actuaries, of which was questioned and challenged, and found to be due to the longevity, inflation and future pay awards, rather than just the McCloud assumptions.

·         The increase in receipts in advance (note 39) is due to holding more developers’ contributions, which are held for future expenditure on capital schemes. It also includes some security bonds that we hold until obligations are met by the developers.

·         The increase in payments in advance (note 36) is due to one payment to Highways England for a capital scheme that will be delivered in future years.   

Councillor Baines further questioned the referencing of the minutes of this Committee being passed to the external auditors and questioned what qualification they would be taking in relation to this?  Adrian Balmer, Ernst & Young responded that they generally review minutes of Committee meetings as part of their understanding of the business and sign off as an overall risk assessment of the Council and how audit strategy is developed and impacted.  

Anita Bradley, Director of Law and Governance in response to Councillor Baines’ query advised that the amendments requested from this Committee at the last meeting regarding the Annual Governance Statement, had been included within the final statement included within these accounts.

RESOLVED to:

(a)  Consider and approve the Statement of Accounts 2020/21 at Annex 1;

(b)  Consider and approve the Letter of Representations 2020/21 for the Oxfordshire County Council accounts at Annex 2;

(c)  Consider and approve the Letter of Representations 2020/21 for the Oxfordshire Pension Fund accounts at Annex 3;

(d)   Agree that the Director of Finance, in consultation with the Chair of the Committee (or Deputy Chair in their absence), can make any further changes to the Statement of Accounts 2020/21 and letters of representation that may arise during completion of the audit.