Agenda item

To provide the Audit & Governance Committee with the Draft Accounts for 2022/23.

Witnesses:

Barry Stratfull - Chief Accountant

Nikki O’Connor - Strategic Finance Business Partner

Paul Evans - Director of Law and Governance

Key points raised during the discussion:

1.    The Chief Accountant introduced the report and noted that in line with the Accounts and Audit Regulations 2015 the Council was required to publish its Statement of Accounts and have those audited. Reverting to pre Covid-19 timescales the deadline for draft accounts was 31 May and the deadline for publishing audited accounts was 30 September. The Council’s draft Statement of Accounts 2022/23 was published on 20 June, delayed due to audit delays in previous years’ accounts and availability of third party information. The Statement of Accounts provided a summary of the Council's financial transactions for the year and the financial position as of 31 March 2023.

2.    Responding to a Committee member’s query, the Chief Accountant noted that the date of 20 July 2023 in the report was incorrect, the draft Statement of Accounts was published on 20 June 2023. 

3.    The Chairman requested an update on the Surrey Pension Fund 2022 triennial valuation regarding the 2021/22 Statement of Accounts. The Chief Accountant explained that the impact of the triennial valuation on the Council’s pension fund liability was deemed to be material. Officers had reviewed the revised actuary reports and the changes required to the 2021/22 Statement of Accounts had been sent to Grant Thornton, he noted that any changes would not affect the balances at the end of 2022/23 in terms of the pension fund but would affect the opening balances and possibly the in year movements on the pension fund.

4.    Adding to the above point, the Strategic Finance Business Partner was hopeful that the 2021/22 Statement of Accounts would be signed off soon, as a result there were likely to be some changes to the 2022/23 draft Statement of Accounts around opening balances and movement between the year. Any changes would be reported to the Committee. Regarding the triennial valuation, there was a proposed way forward, she and the Section 151 Officer responded to the questions asked by Grant Thornton about their view on whether the triennial valuation made a material impact - treated as a post balance sheet event - the accounts had been reissued and queries finalised.

5.    A Committee member asked for detail around the work to improve financial resilience regarding the Council's reserve position which had reached a sustainable level. The Strategic Finance Business Partner noted that officers and Members had worked hard on the Council's financial resilience in recent years, particularly since 2018 in response to the Chartered Institute of Public Finance and Accountancy (CIPFA) report. Specifically, in 2018 the Council had very low reserve levels both in comparison to similar authorities and in relation to the size of the Council’s budget. Since then, the level of reserves has increased and budgets have been set without reliance on reserves to balance the position. The unearmarked reserve level was now circa 15% of the Council’s net revenue budget. The appropriateness of the level of reserves was assessed at least annually in relation to the risk environment as part of the budget setting process.

6.    Responding to the Committee member’s query, the Chief Accountant confirmed that the Council’s gross expenditure of just over £2 billion included the schools grant as well. The Committee member noted that it would be helpful to make that point as the Council did not have direct control over that grant, decisions were taken by the Surrey Schools Forum. The Strategic Finance Business Partner noted that would be reflected in the final version.

7.    Responding to a Committee member’s query, the Director of Law and Governance confirmed that a six-month update on the Annual Governance Statement was scheduled for November. Referring to the Draft Annual Governance Statement 2022/23 included within the item’s annex, the Committee member queried whether the correct year for the ‘action to be taken during 2022/23’ should be 2023/24 and the Director of Law and Governance confirmed that the correct date was 2023/24. The Strategic Finance Business Partner noted that the version of the draft Annual Governance Statement included within the item’s annex was not the final draft version under item 11, she noted that draft Statement of Accounts on the Council’s website would be updated to include the final draft Annual Governance Statement.

8.    The Chairman noted that in the past the Committee would go through the Narrative Report within the Statement of Accounts, he asked Committee members to feedback any queries on that in due course.

RESOLVED:

Considered the draft 2022/23 statement of accounts.            

Actions/further information to be provided:

1.    A12/23 - The Chief Accountant will include a note in the final version of the Statement of Accounts 2022/23 explaining that the schools grant is included in the Council’s gross expenditure of just over £2 billion.

2.    A13/23 - The Chief Accountant will ensure that the draft Statement of Accounts 2022/23 on the Council’s website would be updated to include the final draft Annual Governance Statement 2022/23. 

3.    A14/23 - Committee members will feedback any queries on the Narrative Report within the Statement of Accounts in due course.