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Agenda item

Statement of Accounts 2016/17

To consider the report of the Head of Finance.

Minutes:

The Head of Finance submitted a report (HF/67/17) to approve the Authority’s Statement of Accounts for the financial year 2016/17.   A copy of the Statement of Accounts was attached at Appendix 4 the report.

 

The Service Manager - Accountancy introduced the report and reminded Members that the Audit Committee had considered the Statement of Accounts for the 2016/17 financial year at its meeting held on 15 June 2017.  As a consequence of more accurate information being made available to officers and issues raised at audit, a number of adjustments had been made to the accounts, which had been agreed by the External Auditor and these were set out in Appendix 1 to the report. The Council’s response to the Wales Audit Office’s letter of representations regarding the 2016/17 Financial Statement of Accounts was submitted at Appendix 2.   A copy of the Wales Audit Office Audit of the Financial Statements Report was submitted at Appendix 3 to the report.  The Service Manager then highlighted and explained the adjustments and amendments made to the accounts, as agreed by the External Auditor.  

 

Matthew Edwards, Financial Audit Manager, Wales Audit Office (WAO), reported that the WAO’s key issues were summarised in the ‘Audit of Financial Statements Report’ submitted at Appendix 3 and it was the Audit General’s intention to issue an unqualified audit report on the financial statements.  He thanked the Head of Finance and his team for preparing the draft financial statement to a high standard and for their assistance in enabling a smooth process and completion of the audit.

 

Members then raised the following matters in respect of the Statement of Accounts:

 

Narrative Report,

 

·         2. Financial Performance - Revenue Outturn for 2016/17: Paragraph 2.11: Further information was sought on the Schools’ overspend of £938k during 2016/17.  The Service Manager – Accountancy reminded Members that a detailed breakdown of individual school balances had been included in the Revenue Outturn and Carry Proposals Information Report circulated to Members previously.  It was the responsibility of individual School Governing Bodies to manage their delegated budgets and a number of schools had been granted ‘Licenced  Deficits’, mainly in the secondary sector.  

·         6. Revaluation and Disposal of Non Current Assets: Paragraph 6.4: The Council had disposed of the two parcels of land in question for a nil return as part of its overall objective to enable the building of more affordable housing within the County. 

 

Notes to the Accounts

 

·         Note 3.- Assumptions made about the future and other sources of estimation uncertainty:  In response to a Member’s concerns on the effect   a 1% increase in the Retail Price Index would have on the cost to the Council of the PFI Waste Management Contract over the next 21 years, the Head of Finance acknowledged that this was a significant area of expenditure and the assumption used in making the accounting estimate was reasonable.  The note indicated the potential risk to the Council if future increases in the Retail Price Index differed from the assumption. He reminded Members that the PFI scheme had been very successful in meeting recycling targets and this had prevented the Council from being fined.

·         Note 13 - Agency Income and Expenditure North & Mid Wales Trunk Road Agency (NMWTRA):  Clarification was sought for the increase in Winter Maintenance costs from £7k in 2015/16 to £72k in 2016/17.  The Head of Finance commented that the NMWTRA had changed their reporting system which had enabled the Council to collate evidence to better record the type of activity undertaken on their behalf.  He would provide further detailed information to Members of the Committee following the meeting. 

·         Note 18 – Related Parties, Controlled Companies – Wrexham Commercial Services Limited:  In response to a question, the Service Manager – Accountancy reported that the increase in the liability figures was partially due to payroll / invoice payments at the time of the finalisation process for the financial statement.  The Head of Finance further reported that the company had made a financial loss during 2016/17 and this had resulted in an increase in its debt to the Council.  He agreed to provide further detailed information to Members of the Committee following the meeting. 

·         Note 19 – Material Items of Income and Expense: In response to a query, the Service  Manager - Accountancy confirmed that the repayment period of the PWLB loan to finance the Council’s exit from the Housing Subsidy system was 30 years.  The loan had been taken to enable the Council to meet the Welsh Government’s Welsh Housing Quality Standard by 2020.

·         Note 31 - Long Term Debtors: Members requested further information on the amount and length of time of the repayment period for the three approved loans to voluntary bodies.

 

Notes to HRA Statements

 

·         Note 2  - Rent Arrears: It was noted that there had been a reduction of £10k in the total amount of rent arrears at 31 March 2017 compared to 31 March 2016. 

 

The Committee thanked the Head of Finance and his team and the Welsh Audit Office for completing their respective roles in a timely manner and enabling the Council to bring forward the timetable for preparing and publishing the accounts.

 

RESOLVED –

 

(i)         That the Statement of Accounts for the 2016/17 financial year attached at Appendix 4 to report HF/67/17, be approved.

(ii)        That the contents of the management representations letter, as set out in Appendix 2 to report HF/67/17, be approved.

Supporting documents: