Issue - meetings

To receive the report of the Chief Finance Officer.

The Chief Finance Officer presented the report, which sought Members’ approval on the Council’s final Statement of Accounts for 2018-19, subject to audit and publication of the notice to Council Website to explain the reasons for the delay in completing the audit. The publication of a Statement of Accounts was a statutory requirement, in accordance with the Local Audit and Accountability Act 2014, supported by the Accounts and Audit Regulations 2015.

Members were advised that local authorities in England and Wales were required to prepare unaudited Statements of Accounts by 31 May 2019, which would allow time for public inspection. The audited Statement of Accounts would then require approval and publishing by 31 July. Although, Exeter City Council had achieved the statutory deadline for the unaudited Statement of Accounts by the 29 May, the final audit would not be completed on time. Following the legislation set out in the Accounts and Audit Regulations 2015, Exeter City Council must publish a notice on the external website, explaining that it had been unable to publish its audited Statement of Accounts and the reasons for this.

Members were referred to the key changes to the accounts for 2018-19, which highlighted the establishment of the Exeter City Group Ltd (holding company) and Exeter City Living Ltd (housing development Company), which required group accounts.

The Chief Finance Officer discussed the new accounting standard - IFRS 9 Financial Instruments, stating that it was a new approach to the classification of financial assets and a new model for calculating bad debt provisions, which were now classified as loss allowances. He commented on the Retrospective Restatement, noting that Wessex Resolutions had provided money for home improvements and had been re-classified in the accounts. He drew Members attention to the notice that would be published which explained, that the Audit of Exeter City Council’s Statement of Accounts for 2018/19 had not been concluded.

In response to Member questions, the Chief Finance Officer and Geraldine Daly, Associate Audit Director from Grant Thornton responded:-

·         The wording on the notice was acceptable. Any errors picked up during the audit, may cause a delay, however the intention was to complete the audit by 18 September 2019;

·         The valuation of the housing stock was undertaken using a different model, prescribed by statute, rather than fair value;

·         The arrears figure of £16.32 million for short term debtors was based on the impact of debt but was the strongest it had been in a long time and a prudent approach would be to take a potential recession into account. The figure was considered reasonable, but the external auditors would determine this;

·         Modelling for leaving the European Union (EU) was an unknown factor but Exeter was not an area dependent on EU grants. However the uncertainty was a potential economic risk and would be monitored;

·         The impact on borrowing rates was based on Central Government’s borrowing rate, which was currently low, however could be subject to potential change;

·         The last audit from Grant Thornton was three years  ...  view the full minutes text for item 18