Agenda item

James Deane would like to bring to the Committees attention that there is one outstanding item on the accounts which is the pension evaluations, this isn’t something that DBC is in control of, the valuation administration of the council pension scheme is undertaken by HCC and they are experiences some delays with their auditors EY. 

Fiona Jump Presented.

The purpose of this document is to summarise the Councils financial position for the year, to provide assurance for both the strength of DBCs financial position and the way in which we operate.

The document is made up of a number of different financial statements supported by a narrative report the purpose of which is to give more information around what the financial statements are showing, plus explanatory notes which go in to much more detail about the figures presented.

The main statements:

1.      Comprehensive Income and expenditure statement – to show the net cost of the councils services and how those costs have been supported by funding sources such as grants, business rates and council tax income.

               Statement for 2019 shows a net gain to the Council of £128M

2.      Movement in Reserve statement – to show the movement throughout the year on different reserves that are held by the council. The Balance sheet also shows DBCs finical position for the year.

              This year the document shows the net worth of the council is just over £1b.

3.      Cash Flow – shows the movement in the Councils cash and cash equivalent position during the year. There has been a net cash inflow of £4.9m.

The audit findings report summaries the work coming out of the audit so far, it is substantially complete.

The date from receiving accounts was pushed back this year to the end of August with the latest date for auditing pushed back to the end of November, however the finance team were able to provide the accounts at the end of June as originally planned.

The areas still to complete are around prior period adjustments, this is due to the fact GT have to go through an internal review with their technical team on those and that is still ongoing.

In terms of pensions, GT cannot sign off on the accounts until they have received the assurance letter from EY.

Due to the pandemic all work has been undertaken remotely, this has meant things have taken a little longer while everyone got use to the new way of working. 

Cllr Birnie would like to know where the £2.4M overspend in the general fund has come from and if the committee should be concerned.

N.Howcutt explains this is mainly linked to the Berkhamsted Multi Story car park, this is an isolated issue related to a project that encountered significant problems.

Cllr Birnie wold like to know what the dacorum development reserve is for.

N.Howcutt currently there are plans to use a portion of this fund to cover the local plan pressures and some of the building improvements required as a result of  Covid which have been encountered this year, the funds will be built back up to continues to invest in the future development of Dacorum. 

Cllr Townsend made reference to the General Fund and the HRA Fund, Stating that historically it wasn’t kept fix and was monitored by Councillors, however in the last 2 years there seems to be a balancing adjustment or earmarked reserves, he feels this isn’t appropriate or correct and raised this point in the previous year also. He would like to know what the policy framework is around earmarked reserves which allows this to happen.

Cllr Townsend feels it is very difficult to reconcile all the reports, he would like to thank Fiona Jump for all her help clarifying the Outturn Report, He feels the 3 reports being reported presented together has been confusing.

NHowcutt apologies if reporting all 3 reports together has caused confusion,  this decision was made due to the fact agenda items 6 and 7 contain recommendations which could only be approved once agenda item 8 has been discussed. Presenting them together allowed the committee to look at the overall picture.  In terms of item 6 (the final outturn report) this gives a very clear and transparent overview of what has changed from the last Council reports.

The statements take months to create and have many statutory requirements, there isn’t enough time and resources to produce them within the monthly reports.

Regarding PPA and process, these have been reviewed by External audit to ensure they are correct, a few minor issues were identified and these have been rectified.

FJump in relation to reserve movements, there are always some movements following provisional outturn, where those result in a reserve movement the correct process is to come before committee for approval, we do try and keep these to a minimum where possible.

Cllr Townsend clarified that he is comfortable approving the changes however it is the use of the reserves as a balancing figure that is causing him concern.

JDeane explains that what Cllr Townsend is referring to is the general fund, the purpose of this fund is to ensure there is financial support for any unforeseen risks throughout the year, good practice is to keep it between 5 and 15% of the net cost of services, and therefore this account balance should remain the same.

Cllr Symington appreciates JDeanes explanation, however she still has concerns around the ear marked reserves, she feels it is a known expenditure and sees the General fund as the health of the council rather than a buffer.

The following recommendations were approved by the committee:

·        Reserve contributions and movements

·        Statement of accounts and letter of representation

Cllr Symington pointed out that on page 82 of the accounts it states that the chair and vice chair of the oversight and scrutiny committees can be selected from any of the political groups, this is actually at odds with DBCs constitution which states they should be selected from the majority group. N Howcutt will look into this further, it is an error inte annual governance statement that will be corrected.