Agenda item

The committee is requested to consider the audited Statement of Accounts shown in Appendix 1 for the financial year ended 31 March 2017, to note the audited outturn position and to agree the Letter of Representation to be given to the council’s External Auditor.

(Note: The appendix to this report will be circulated as a separate document to members of the committee and senior officers only. It may be viewed on the Council’s website here.)

The committee considered the report circulated with the agenda and the 2016-17 Statement of Accounts circulated in the supplementary agenda.

Mr Catlow presented the report. Mr Cooper was also in attendance.

A report considered by this committee in March 2017 had detailed the proposed revised presentation of the council’s expenditure of its services within the Comprehensive Income and Expenditure Statement and the new Expenditure and Funding Analysis, as well as the existing accounting policies as a basis to prepare the council’s 2016-17 financial statements.

The narrative in the financial statements was new. There were two changes in the council’s asset base. The first of these related to changes in asset valuations and continued inflow of grant from central government (New Homes Bonus and Community Infrastructure Levy) which resulted in a short term increase in the cash reserves held by the council until plans to spend that money had fed through.  The second related to the balances in the revenue accounts which reflect the summary of the main inflows and outflows in the revenue account and income statement.

A significant change this year was as a result of the contract with Sports & Leisure Management (SLM) to run the council’s leisure centre services. The running costs of the centres had previously been shown within both the income and expenditure headings under the Commercial Services portfolio. From now on only the contract payment between the Council and SLM would appear under this heading. This had created a number of variances throughout the accounts.

Page 12 of the Statement of Accounts supplement showed the bottom line figures. It reconciled the net surplus or deficit in the revenue account at £6.4m to the actual bottom line change in the council’s general fund, showing the unrestricted revenue reserves available to support council expenditure. The surplus for the year was £295,000.

The committee made the following comments and received answers to questions as follows:

·             Concern at the high staff vacancy savings of £479,000 - This reflected an estimate of staff turnover and an increase in current vacancies waiting to be filled.

·             The Commercial Board included Mr Dignum and other members of SLT supported by a Corporate Policy Officer.

·             Concern regarding the large shortfall in Car Parks income – Car Parking income was difficult to predict and driven by weather conditions. The mid-year forecast had been favourable but did not continue through to the year end. Major refurbishment works in the multi-storey car park would also have closed down available spaces. A more conservative view had been taken this year. Targets and performance were now reviewed on a monthly basis and quarterly monitoring reports taken to the Senior Leadership Team (SLT).

·             Concern at reduced insurance premiums for the leisure centres – Every year the insurances were reviewed in the insurance supplier to ensure that our assets were covered appropriately. Public liability insurance was expected to increase. The asset valuation of the leisure centres would not change our insurance cover necessarily. The council was obliged to ensure that the contractor had a fully functioning facility under the contract with SLM.

·             The Hussey Collection was valued at £6.6m and appeared under Property Plant and Equipment in the accounts. Mrs Jones undertook to arrange a visit for new councillors to the Pallant House Gallery.

A trial run had been held this year to prepare for the tighter timescales next year. It was 90% successful with the shortfall being recognised and revised procedures in place. The committee can have comfort that appropriate actions would be taken and that there were adequate resources to carry out the finalisation of the accounts next year by the earlier date.

Mrs Belenger gave thanks to her team on delivering the accounts to the new deadlines and also to the external auditors for working with the team on the new process this year. The committee added its congratulations.

RESOLVED

1)          That the audited Statement of Accounts shown in Appendix 1 for the financial year ended 31 March 2017 be approved.

2)          That the outturn position be noted.

3)          That the Letter of Representation be authorised and given to the council’s External Auditor.