Agenda item

To receive a Part 2 report for testing.

(a)       That the final version of the Statement of Accounts 2018/19 be approved;

(b)       That the Letter of Representation – Flintshire County Council; be approved; and

(c)        That the Supplementary Financial Information to the Statement of Accounts 2018/19 be noted.

The Corporate Finance Manager introduced Richard Harries and Mike Whiteley of the Wales Audit Office, and Liz Thomas, Strategic Finance Manager, Corporate Finance. 

The Corporate Finance Manager advised that the final version of the Statement of Accounts 2018/19 was presented for approval following consideration by the Audit Committee prior to the meeting of County Council today.  He explained that the Statement of Accounts 2018/19, incorporating those changes agreed with Wales Audit Office (WAO) during the course of the audit for Member approval was attached as appendix 1 to the report.  The WAO presentation in connection with the audit of the Statement of Accounts 2018/19 was attached as appendix 2.  During the audit, changes agreed with the WAO were made to the draft Statement of Accounts 2018/19 and those which are reportable under ISA 260 are shown in appendix 3.  The Flintshire County Council Letter of Representation to the WAO was attached as appendix 4.  Supplementary information to the Statement of Accounts 2018/19 on full time equivalent pay, in excess of £60,000, as requested by a notice of motion approved by Council on 29 January 2013, was attached as appendix 5.

The Corporate Finance Manger advised that there were no amendments to report to Council following consideration of the Statement of Accounts and the WAO findings by the Audit Committee at the meeting held prior to Council today.  A note on previous questions raised by Members and the response provided had been circulated to Members and there had been opportunity throughout the summer for Members to raise any further issues or questions.  No additional questions were received.

The Corporate Finance Manager reported that the overall findings of the WAO were positive and built on the improvements achieved in previous years.  The WAO concluded that the financial statements were produced to a good standard and were supported by comprehensive working papers.  There were no uncorrected misstatements.  The only issue arising from the audit was regarding the process for valuation of assets and the actions planned to address this, in conjunction with the WAO, were accepted by the Audit Committee at the meeting held earlier today.

The Corporate Finance Manager advised that there would be an earlier statutory deadline for the accounts from 2020-21 for the submission of the draft annual financial statements.  In conjunction with the WAO the Council would undertake a ‘dry-run’ in 2019-20 for producing its draft financial statements by 31 May 2020 and   conclusion by WAO on 31 July 2020.

The Corporate Finance Manager reported that there was one material amendment regarding pensions arising from the Audit and was a consequence of a national issue known as the national ‘McCloud’ legal acse judgement which could impact on all public service pension schemes.  He explained that there was a potential future impact at the current time on teacher’s pay contributions and the Council had to account for the best estimate due to the value, however, there was no immediate impact on the Council’s budget and any actuarial impact would be dealt with over the longer term through actuarial variation which determined the pay contributions over a number of years.

Mr Richard Harries, Financial Audit Engagement Lead for Flintshire County Council, reiterated that the overall findings by the WAO had been positive and said the corporate position was good.  He spoke of the hard work undertaken to produce the Accounts and commented on the high standard of the comprehensive working papers provided.  He also spoke of the positive professional working relationship and constructive dialogue between the WAO team and the Council throughout the audit process.  Mr. Harries presented the ISA 260 report by way of a presentation which covered the following main points:

·         overall findings

·         Auditor General’s responsibilities

·         audit position

·         issues arising from the audit

·         independence

·         looking ahead

In concluding his presentation Mr. Harries thanked the Corporate Finance Manager, and his Team for their work on the Accounts and the constructive help and support provided throughout the audit process. 

The Chief Executive thanked Mr. Harries for his presentation and the Corporate Finance Manager and his Team for their work.  He said discussion on how to address the earlier statutory deadline from 2020-21 would take place with the Constitution and Democratic Services Committee and it would be recommended to Council that in future the approval of the Statement of Accounts be delegated to the Audit Committee, with Members being given full access to the information. 

The Chief Executive took the opportunity to comment on a local press report on a potential liability arising from the ‘McCloud’ judgement.  He explained this was a national issue and gave a reassurance that if there was a liability to the Council as a contributing employer it would be paid for through employer contributions to the pension fund over a number of years, and would be a relatively small addition to the Council’s annual employer contributions.  He advised that the Council was completing the current actuarial review which took place every 3 years and that this would be reported at a later date. .  In summary he advised that any resolution of the legal case would have no impact on the Council’s budget at the present time or in the next financial year.

Councillor Tony Sharps congratulated the Corporate Finance Manager and his team on the presentation and high standard of the Statement of Accounts.  Councillor Sharps thanked the Chief Executive for the clarification and reassurance given to Council concerning the potential implications of the ‘McCloud’ judgement.  He asked if the Leader of the Council could provide a press statement to ensure that the residents of Flintshire were given accurate factual information to allay any concerns that may arise as a result of the local press coverage.  Councillor Ian Roberts confirmed that a press statement would be provided to inform the general public of the Council’s position and give reassurance.

Councillor Chris Dolphin expressed thanks to the Corporate Finance Manager, the Strategic Finance Manager, and the Finance team for their hard work and successful completion of the Statement of Accounts 2018/19 in advance of the statutory deadline.  Councillor Dolphin also thanked Mr. Harries and Mr. Whiteley for their work and presentation of the WAO findings.  Councillor Dolphin reported that the Audit Committee had considered the Statement of Accounts 2018/19 at a meeting held prior to the meeting of County Council today.  Officers from the WAO were in attendance and had presented and explained their audit findings to the Committee.  Finance officers had provided a progress update on the draft accounts which had been considered at the previous meeting of the Audit Committee.  The amendments to the Statement of Accounts were reviewed and there were no further amendments since the draft was agreed.  In conclusion Councillor Dolphin moved the recommendations as detailed in the report.

In seconding the proposal Councillor Glyn Banks paid tribute to the Corporate Finance Manager and his Team for their hard work and expressed best wishes for the success of the ‘dry run’ planned in 2019-20 for producing the draft financial statements by 31 May 2020.  He also thanked the WAO Team for their hard work and support. 

The Chair expressed her thanks to all involved in the successful completion of the work on the Statement of Accounts 2018/19.  She asked Members to vote on the recommendations in the report and on being put to the vote, the recommendations were carried.

RESOLVED:

(a)       That the final version of the Statement of Accounts 2018/19 be approved;

(b)       That the Letter of Representation – Flintshire County Council; be approved; and

(c)        That the Supplementary Financial Information to the Statement of Accounts 2018/19 be noted.