Agenda item

To provide Audit & Governance Committee with the Draft Statement of Accounts for 2023/24.

Note: cover report and annex to follow.

Witnesses:

Nikki O’Connor, Strategic Finance Business Partner (Corporate)

Anna D’Alessandro, Interim Executive Director - Finance and Corporate Services

Key points raised in the discussion:

1.    The Strategic Finance Business Partner (Corporate) explained that the draft Statement of Accounts was prescriptive based on the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Local Authority Accounting 2023/24 to produce compliant accounts. The 2023/24 accounts were published last week, five weeks later than the 31 May deadline and 54% of local authorities met that target highlighting the national issues faced, several local authorities had multiple years of unsigned accounts. She noted that it had been a challenging year-end for her team: with the new Unit4/MySurrey system meaning that processes had to be redefined, the 2022/23 accounts were signed off in January 2024, there were team changes, delays in obtaining third party information and there was an immaterial amount missing from the draft accounts regarding the Collection Fund, due to information remaining outstanding from borough and district councils. She noted that due to the tight deadline, some of the validation checks had not been done, and several minor typos and required changes had been identified since publication. An updated draft would be issued to EY this week. The team was working closely with EY on the external audit and the final accounts would be received by the Committee in November.

2.    A Committee member asked whether the risk had been considered of the publication of the draft accounts five weeks after the deadline and what was the impact. The Strategic Finance Business Partner (Corporate) noted that the delayed publication was not ideal and as noted earlier about half of all local authorities missed that deadline. The delay impacted on the ability to get the audit work done in time to be signed off for the next deadline, there were no immediate financial implications. The Committee member referred to paragraph 15 of the cover report noting that there were direct risk management implications, the Strategic Finance Business Partner (Corporate) agreed.

3.    A Committee member noted that the draft accounts summarised the achievements and ambition of the Council, and areas requiring a greater focus such as SEND provision. Whilst there was a SEND strategy and dedicated money, she noted that it would be useful to understand more about investment in SEND and the Safety Valve Agreement, for the Committee and Members to have an update on that spend. She noted concern about potential policy changes by the new Government. The Strategic Finance Business Partner (Corporate) explained that the baseline for the accounts was the Council's outturn position as reported to the Cabinet, that included the SEND budgetary pressures and performance against budget. 

4.    The Strategic Finance Business Partner (Corporate) explained that within the balance sheet there were two significant figures linked to SEND: the accumulated deficit on the High Needs Block which was required to be accounted for as an unusable reserve and the Council’s offsetting reserve. The latter was part of the Council’s contribution of the Safety Valve Agreement. She noted that the Committee could be provided with an update on details regarding SEND, she noted that the Children, Families, Lifelong Learning and Culture Select Committee received regular updates on SEND and the Safety Valve Agreement. The Interim Executive Director - Finance and Corporate Services noted that for the Committee’s assurance, the service could provide an update in terms of meeting the Council’s requirements regarding the capital side of the Safety Valve Agreement.  

5.    A Committee member noted that the budgetary situation the Council faced and trying to get the services delivered needed to be more clearly understood by Members and residents, more help was needed from central government. He welcomed an update to the Committee as noted above and suggested having a Member Development Session on the matter. The Interim Executive Director - Finance and Corporate Services noted the request for a Member Development Session on SEND/Safety Valve Agreement, and for the Committee to receive an update on SEND in respect of both capital and revenue.

6.    The Cabinet Member for Finance and Resources referred to the budget consultation process with residents and wondered whether there was an opportunity to include information that explains some of the challenges faced by the Council. He would liaise with the Strategic Finance Business Partner (Corporate) on the matter.

RESOLVED:

Considered the draft 2023/24 Statement of Accounts.

Actions/further information to be provided:

1.    A19/24 - Following completion of the validation checks, an updated draft will be issued to EY with minor changes to the numbers and to correct some typos, to be flagged with the Committee.

2.    A20/24 - The Interim Executive Director - Finance and Corporate Services, and Strategic Finance Business Partner (Corporate) will follow up the request for a Member Development Session on SEND/Safety Valve Agreement; and for the Committee to receive an update from the service in terms of meeting the Council’s requirements regarding the Safety Valve Agreement.

3.    A21/24 - The Cabinet Member for Finance and Resources will liaise with the Strategic Finance Business Partner (Corporate) about the opportunity in the budget consultation process to include information that explains some of the challenges faced by the Council.