Issue - meetings

That the report and action plan be noted.

The Finance Manager - Technical Accountancy introduced the Council’s response and action plan to the Wales Audit Office (WAO) report ‘Audit of Financial Statements 2013/14’ which had been presented to the Committee and full Council in September 2014.  The actions being taken in response to the issues raised by WAO would be resolved for the 2014/15 accounts.

Detailed explanation was given on phased work being undertaken to address historical issues on the identification of non-current assets on the register for the 2014/15 accounts.  Work on assets classified as Council dwellings and infrastructure would commence in 2015/16 pending the revaluation of housing stock and the introduction of a different valuation method for infrastructure assets required by the Code of Practice in that financial year.  Actions to address the issue of accounting for transactions in the appropriate financial year would be helped by more checking by the Finance department and communicating more widely with budget holders, and the move away from traditional methods to electronic use of information exchange would assist.

In response to a query from Councillor Alison Halford on the appropriate accounting treatment of deposits such as Section 106 monies, the Finance Manager clarified that the issue was around where these transactions were held on the balance sheet.  She explained that such a deposit would be linked to planning conditions and would be held on the balance sheet for release over a period of time.  There were over 100 such transactions during the period, each to be reviewed during 2014/15 to ensure that all were accounted for correctly.

Mr. John Herniman of WAO said that some deposits could be released to revenue and may not need to be on the balance sheet.  He referred to the classification of data on infrastructure which would be resolved through requirements in 2015/16 and that issues previously raised on the identification of assets of vehicles, plant and equipment would need to be resolved for this year’s accounts.

The Finance Manager commented on the development of a protocol to set out arrangements for reserves, following a review of all reserves held, in line with the recommendation from WAO.

The Chief Executive said that the completion of the review would help in drawing on reserves to support the budget and future years’ budget planning.  He referred to the work on reviewing reserves which had been explained in a letter to the Welsh Government, to be shared with Overview & Scrutiny Members, and that the use of reserves would have a higher profile within the Medium Term Financial Plan.

In confirming that there was no issue with the level of reserves, Mr. Herniman referred to pressure on all Councils on the careful use of reserves, given that they could only be used once and the need to ensure transparency.

The Chief Executive said that the outcome of the review would reaffirm that the Council’s reserves were generally allocated for specific purposes without large unallocated sums.

RESOLVED:

That the report and action plan be noted.