Agenda item

Report now attached.

The Director of Corporate Services presented the report.

The draft Statement of Accounts for the financial year ended 31 March 2021 presented to Resources Committee and Audit Committee in July confirmed that: i) the unaudited Statement of Accounts would be signed by the Treasurer to certify that it presented a true and fair view of the financial position of the Authority as at 31 March 2021; ii) this would be subject to review by the Authority’s external auditors, Grant Thornton; iii) that a further report would be presented to the Audit Committee in September, following completion of the external audit; and iv) at that meeting the Chair of the Audit Committee would be asked to sign the final statement of accounts, as well as the Treasurer.  In light of this the Committee noted and endorsed the report and accounts.  Subsequent to that the full set of accounts was submitted for audit to Grant Thornton. 

The Statement of Accounts had been updated to reflect the following changes identified during the audit (as reported in the Audit Findings Report – elsewhere on the agenda) and a revised statement of accounts was considered by Members.

Adjusted Misstatements

There were no adjusted misstatements impacting the key statements.

Misclassifications and disclosure changes

A number of misclassifications and disclosure changes which had been adjusted in the accounts were noted as follows: -

·         Accounting policies – in the draft financial statements i) the accounting policy for provisions was very brief; ii) there was no accounting policy for joint control; and iii) there was an accounting policy for non-current assets held for sale, even though the Authority did not have any – auditor recommendations were: - i) to include more detail in the accounting policy for provisions; ii) include a policy for how joint control was accounted for; and iii) to remove the policy for non-current assets held for sale.

·         Assumptions made about the future and other major sources of estimation and uncertainty – disclosure was made that Local Government Pension Scheme property related assets were subject to material valuation uncertainty at the LCPF which was not the case – auditor recommendation was therefore to remove this disclosure.

·         Critical judgements – i) additional reliefs S31 grant 2020/21 were disclosed as a critical judgement.  These did not appear to be critical judgements and should be disclosed elsewhere; and ii) disclosure of the judgements around the Authority’s assessment that North West Fire Control Limited was a joint operation and that group accounts were not required were not included in the note, but would be useful for users of the accounts to understand these judgements - auditor recommendations were: i) remove the going concern as a critical judgement disclosure; and ii) consider whether business rates additional reliefs s31 grant 2020/21 would be better disclosed as an estimation uncertainty if there was a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and iii) include a discloser of judgements around the accounting for North West Fire Control Limited.

·         Narrative report – in the draft financial statements, the narrative report said the reserves policy had a minimum level of £3.2m.  According to the reserves polity this was actually £3.5m – auditor recommendation was to update the disclosure of the minimum level of reserves in line with the policy.

·         Private Finance Initiative – the wrong retail price index figure was used in the model for the calculation for the future payments of services for the Balfour Beatty Fire and Rescue NW Limited scheme.  The assumed 2.5% should have been replaced by 4.489% which led to a total difference of £78k over the payables within 1-20 years – auditor recommendation was to update the disclosure based on the correct retail price index figure used in the PFI model.

·         Financial Instruments – in note 8 of the draft financial statements i) current investment of 2019/20 was wrongly disclosed as £15,000k instead of £5,000k; ii) £3,387k of Other trade receivables was erroneously excluded from financial instruments; and iii) trade payable of 2019/20 was wrongly disclosed as £6,086k instead of £4,255k – auditor recommendation was to update the disclosure for the issues noted. 

As all changes requested by Grant Thornton had been made to the accounts the Treasurer to the Fire Authority and the Chair of the Audit Committee were therefore required to approve the revised accounts by signing off the Statement of Responsibilities and the Balance Sheet.

As the audit was not completed it was agreed that if there were any further changes required to the accounts, authority was delegated to the Audit Committee Chairman and the Treasurer to consider and agree any amendments to the Statement of Accounts on behalf of the Committee.

In response to a question raised by County Councillor Singleton regarding the classification of ‘other income’ referred to on page 19 of the agenda pack, the Director of Corporate Services confirmed that the vast majority of it came from colleges for the Service to deliver the Prince’s Trust programme.

In response to a further question raised by County Councillor Singleton regarding long-term borrowing, the Director of Corporate Services advised that the Authority had 3 long-term loans which valued £2.0m.  These were taken out in 2007/08 and ran to 2035/36.  All were with the Public Works Loan Board and all were fixed term.  He advised that the Resources Committee discussed the loans and considered any potential for debt restructure.

RESOLVED: - That the Committee re-approved the revised Statement of Accounts and authorised the Audit Committee Chairman and Treasurer to consider and agree any further amendments to the Statement of Accounts.