Agenda item

statement of accounts 2018/19 - authorisation for issue

To consider report CFO/043/19 of the Chief Finance Officer concerning the audited 2018/19 Statement of Accounts.



Members considered Report CFO/043/19 of the Director of Finance, concerning the audited 2018/19 Statement of Accounts.


Members were informed that the Authority is required to prepare a set of financial statements in a format that is set out under the relevant Accounting Codes and Standards. They were advised that the Statement of Accounts attached to the report as Appendix A, presents the required Authority core financial statements for 2018/19, having regard to the various codes and regulations.


Members were advised that the Authority has a statutory duty to approve and sign-off for publication, the Statement of Accounts for the previous year, before the 31st July of the following year. They were informed that this report, presents the 2018/19 Statement of Accounts for Members consideration and requests that Members approve the statement and sign it off for publication.


Members were also informed that they would normally receive a report from the Authority’s Auditor – Grant Thornton, outlining their findings from their audit work on the financial statements and value for money review, however Grant Thornton feel that a full property valuation must be carried out to confirm the figures in the financial statements, before they can finalise their opinion.

Members were advised that after speaking to colleagues in other fire and rescue authorities and local authorities, it would appear that a number are facing similar challenges from their auditors this year, as auditors have sought greater assurance around figures within the financial statements.


Members were advised that any amendment to property values as a result of the valuation exercise, will have no impact on the outturn to budget position reported in the previous report.


Some background information to the four core financial statements; and a summary of the 2018/19 key movements and significant changes to the previous year’s figures, where also highlighted to Members.


Members were advised that the Codes and Regulations require a number of notional accounting entries and adjustments that are significant in value, to be included in the Statement of Accounts, such as a depreciation charge. As they are notional in nature, they do not form part of the costs that must be funded by the Authority’s approved general fund budget. It was highlighted to Members that the 2018/19 neutral general fund outturn position, reported in the previous outturn report, becomes a £79.6m adverse variance under the Statement of Accounts code and regulations.


It was clarified to Members that the report is requesting that they note the draft Letter of Representation, attached to the report as Appendix B, which simply states that the Director of Finance and the Chair of the Committee, are not aware of anything that would alter the information contained in the Statement of Accounts. Once Grant Thornton have completed their audit and issued an opinion, their audit review report, a final statement of accounts; and a Letter of Representation, will come back to Members for sign-off.


Questions were raised by Members around the concerns of the auditors in relation to the property valuation; and why they were not satisfied with the professional opinion of the current valuers.


Members were advised that the auditors issue was around timescales not the valuers; and the only way that the auditors would be assured, was for a full property valuation to be undertaken. Members were informed that a tender process will therefore be undertaken for this work, which will stipulate that following the initial valuations, the appointed valuer will conduct a review of at least 20% of the property portfolio each year, over a 4 year period; and provide detailed evidence regarding the valuations. They were informed that due to issues within the private sector, the auditors are now seeking greater assurance from public authorities regarding this matter, despite those issues not being applicable to the public sector. Members were informed that Officer’s main concern around this, is that taxpayer’s money will have to be used to pay for the additional valuations required by the auditors. Members were informed that a number of other FRA’s and local authorities are experiencing the same issues.


Members were advised that another matter causing the auditors concern, is around the McCloud pension’s case; and significant resources have been required to ensure they are provided with sufficient information to assure them. 



Members requested that when the report comes back to Members for final sign-off, confirmation is provided as to whether the auditors are satisfied with the proposal to carry out a 20% rolling re-valuation over the next four years, up to 2022/23, in order to satisfy the auditor about any movement in property valuations; a  full re-valuation will be carried out in 2023/24.. Officers advised that when the report comes back to Members, the auditors will be in attendance to present the report; and Officers will ensure that those matters are addressed by the auditors.


Further questions were raised by Members with regards to the fact that some of the larger local authorities have their own internal valuers; and whether an agreement could therefore be put in place within the City Region regarding the sharing of resources.


Members were informed that some discussions had commenced around this; and the potential to buy-in this resource in the future, would be explored. 


Members Resolved that:


a.    The unaudited Statement of Accounts 2018/19 attached as Appendix A to this report, be approved and authorised for issue.


b.    The audit opinion follow, once the updated asset valuation has been completed and shared with the External Auditor.


c.    The draft letter of representation in relation to the unaudited 2018/19 accounts, attached as Appendix B, be noted.


d.    Once Audit have finalised their work, it be noted that an audited statement of accounts and letter of representation will come back to Members for approval.



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