Agenda and draft minutes

Apologies for absence were received on behalf of Councillors Chris Kane and

Lisa Powell and Councillor Clive Moesby, Portfolio Holder for Resources.

Members should declare the existence and nature of any Disclosable Pecuniary Interest and Non Statutory Interest as defined by the Members’ Code of Conduct in respect of:

a)  any business on the agenda

b)  any urgent additional items to be considered

c)  any matters arising out of those items

and if appropriate, withdraw from the meeting at the relevant time.

There were no declarations of interest.

Committee considered a detailed report of the Council’s external auditors, Forvis Mazars, in relation to their audit completion report. 

The report confirmed that as a result of the legislative backstop arrangements introduced by the amendments to the Accounts and Audit Regulations 2015, Forvis Mazars had been unable to complete the audit as originally planned in advance of the backstop date of 28^th February 2025.  This meant a disclaimer of opinion would be issued on the Council’s financial statements.

When an opinion was ‘disclaimed’, the auditor did not express an opinion on the financial statements and consequently no assurance was provided. 

Section 2 of the report set out the detail of work undertaken on the accounts by Forvis Mazars.  For single entity accounts, a significant amount of work had been carried out.  Section 4 set out commentary on the Council’s value for money arrangements.  The main commentary was that there was a significant weakness associated with the accounting for the group accounts (Dragonfly).

In response to a query from Councillor Wood, James Collins advised that the status of the audit as ‘draft’ reflected that some wording may change between the report being issued and the report being signed, however, the financial statements would remain as ‘no assurance provided’.

In response to further queries raised by Councillor Wood, the Chief Executive confirmed that Dragonfly Performance Monitoring was included with the Council’s Performance Monitoring report presented to Executive on a quarterly basis.  In relation to minimum revenue provision (MRP), which was money the Council set aside to pay off debt, Forvis Mazars used a benchmark of 2% - anything below this would be challenged.  Via its Treasury Management Strategy, which Members approved, the Council was setting an MRP of 4%.

Councillor Wood also noted that Dragonfly update reports were presented to Local Growth Scrutiny Committee on a bi-monthly basis and not on a monthly basis as stated in Forvis Mazars’ report - this would change going forward as Scrutiny Committees would start to meet on a quarterly basis after Annual Council. 

The Chair thanked James Collins for providing and presenting the report.  He noted that an independent review of the Council’s wholly owned companies would take place soon and action plans

Councillor Wood thanked the Section 151 Officer and her team as they had had to deal in a compressed timescale with late information from Dragonfly’s previous accountants which had impacted on Forvis Mazars ability to complete their audit work.

In response to a query from Councillor Wood, James Collins noted that the 2024/25 accounts would open with the disclaimed balance of 2023/24.  To rebuild assurance would involve work with management and looking back at historical information, however, there was uncertainty at what ‘rebuilding assurance’ actually meant and this was a national problem for councils affected by the backstop dates where a disclaimed or qualified audit opinion had been issued.  This was a risk and was being looked at by audit suppliers, regulators and other bodies such as the National Audit Office.  ...  view the full minutes text for item AUD35-20/21

Committee considered a detailed report, presented by the Section 151 Officer, which sought Members approval for the accounting policies for the current financial year and which related to the preparation of the Statement of Accounts for 2024/25.

Given that the accounting policies adopted had significant influence upon the accounting statements, it was important that these were given appropriate consideration at the outset of the preparation of the Statement of Accounts.  This helped ensure that they were applied consistently in the preparation of the accounts. 

The policies which were recommended were in line with those used in the previous financial year (2023/24).  Officers had reviewed and updated these where necessary and they had been checked for their relevance, clarity, legislative compliance and that they were in accordance with the latest version of the code of practice and IFRS requirements.

For the first time, the accounting policies for 2023/24 were changed by the Council to reflect the preparation of group accounts.  However, as the Statement of Accounts for 2023/24 were still being audited, it may be necessary to make an amendment to a 2024/25 policy to adopt a more appropriate accounting policy.  Full details of the proposed accounting policies for the current financial year were provided at Appendix 1 to the report.

Moved by Councillor Catherine Tite and seconded by Councillor Cathy Jeffery

RESOLVED that the accounting policies as detailed at Appendix 1 to the report, be approved.