Agenda item

The report presented the Authority’s Statement of Accounts and whilst the Statement took account of the information presented in the Year End Capital Outturn, Year End Treasury Management Outturn and Year End Revenue Outturn as previously presented on the agenda, the Statement of Accounts itself was prepared in line with recommended accounting practice.  It was noted that this was not accounted for on the same basis as council tax and hence did not tie into the actual revenue position as set out in the Year End Revenue Outturn report.  Furthermore this was a very complicated document.

The Statement of Accounts was subject to review by the Authority’s external auditors, Grant Thornton.  The review was scheduled to take place in June and July and a further report would be presented to the Audit Committee once this had been completed with the final Statement of Accounts re-presented to the Resources Committee for information.

The Statement had been 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 2017.

Under existing regulations the Chairman of the Committee approving the accounts had responsibility for signing and dating these. The aim of this requirement was to encourage audited bodies to produce timely accounts of a good quality and promote the concept of corporate governance.

The Statement of Accounts would be placed on deposit for public inspection in from Monday 19 June to Friday 21 July 2017.

The content and format of the accounts was as prescribed in the Code of Practice on Local Authority Accounting issued by the Chartered Institute of Public Finance and Accountancy (CIPFA).  The Authority’s Statement of Accounts set out: -

Narrative Report

This sets out the financial context in which the Combined Fire Authority operated, and provides an overview of the financial year 2016/17 as well as details of future plans.

Annual Governance Statement

This reflected the position the Authority had reached in connection with corporate governance, including internal controls and risk management, including a review of the effectiveness of these arrangements, as reported at the Audit Committee in June.

Auditors Report and Opinion

This set out the Auditors opinion on the Statement of Accounts, and was subject to the results of the outstanding audit work which would commence in June.

Statement of Responsibilities

This set out the responsibilities of the Authority and the Treasurer in terms the overall management of the Authority’s finances and in terms of the production of the annual accounts.

Comprehensive Income & Expenditure Account

This statement showed the accounting cost in the year of providing services. It was a summary of the resources that had been generated and consumed in providing services and managing the Authority during the last year. It included all day-to-day expenses and related income on an accruals basis, as well as transactions measuring the value of fixed assets actually consumed and the real projected value of retirement benefits earned by employees in the year.   The format of this statement had changed since last year end to reflect reporting to management during the year, and the comparative years figures had been restated to reflect this change. The main points of note were: -

·        The cost of corporate services showed reductions when compared with the previous year largely as a result of reduced spend within the property department;

·        Pension interest cost and expected return on assets related to adjustments required and was designed to show expected increase in costs of the scheme less the expected increase in asset values.  However, as the Firefighters pension scheme was unfunded there was no increase in asset value to offset the increase in scheme costs resulting in a £23.3m charge to the Income and Expenditure Account;

·        Page 48 detailed how the Authority raised funding through council tax and grants;

·        Actuarial Gains/Losses on pensions assets and liabilities was a notional charge arising from the Actuary changing their assumptions on which future pensions liabilities were calculated, such as mortality rates, future interest rates, pay and pension increases, return on assets etc.

In response to a question raised by CC Martin regarding an increase in overheads (detailed on p47) the Head of Finance advised that this included payments made in year for the capital programme, the transfer of more money into the Capital Funding Reserve, increased depreciation charges and an impairment charge linked to the future demolition of Lancaster fire station.

In response to a question raised by CC Martin regarding the level of capital income grant (detailed on p 48), the Director of Corporate Services confirmed that the Service had been successful in a Government bid for capital grant for Lancaster Fire Station during 2015/16 and since that time there had been no more funding available to bid for.

In response to a question raised by CC O’Toole in relation available reserves the Director of Corporate Services confirmed that the total reserves (as detailed on the balance sheet on p81) was split between unusable and useable.  The vast majority of unusable reserves was the pension reserve.  This was a technical adjustment and not money the Authority could spend.

Cllr Coleman asked for clarification of the total earmarked reserves for 2016/17 (as detailed on page 105) of the report under notes 17 and 18 as the values were different.  The Director of Corporate Services agreed to check and correct this before the Statement of Accounts was placed on deposit for public inspection.

RESOLVED: - That the Committee approve the Statement of Accounts; subject to the correction required to the value of Total Earmarked Reserves for 2016/17 (as detailed on page 105 in the report now presented).