Agenda item

Report of the Chief Financial Officer to report and consider the accounting policies that have been followed in the production of the Council’s financial statements for 2007/08.

TO FOLLOW

The Head of Finance – Accounting and Control, Graham Oliver, presented this report on the Accounting Policies and Accounts 2007/08. The Statement of Accounts had been approved by the General Purposes Committee on 26 June 2008, prior to external audit, and it was the role of the Audit Committee to review the Statement of Accounts and the associated accounting policies.

Mr Oliver reported that the only change to the existing accounting policies related to Financial Instruments and the way in which these were presented in the accounts. Details of this change were set out in the report. It was reported that external audit of the Statement of Accounts and the accounting policies was in progress by Grant Thornton.

The Chair asked for any questions and comments from the Committee.

The Committee asked for further information regarding non service revenue. Mr Oliver and the Chief Financial Officer reported that non service revenue referred to costs that were not applicable to any particular directorate, including accounting adjustments, transfers in and out of reserves and interest from investments. As such, there tended to be scope for greater variation in this area. It was reported that the Chief Financial Officer was the responsible officer for non service revenue, and the Chief Financial Officer confirmed that there was a robust monitoring system in place for non service revenue, which was monitored closely via the same process used for other budgets.

In response to a query from the Committee, the Chief Financial Officer reported that the accounting entries that had been incorrectly shown in relation to the comparator figures in 2006/07 and restated for 2007/08 were not considered a significant concern and had no effect on the overall bottom line. In relation to the School PFI Contract, it was noted that the £73.175 million liability on the balance sheet took into account the ongoing costs of facilities management.

In response to a request for clarification from the Chair, Mr Oliver reported that soft loans were loans made by the Council at a preferential rate compared with the market rate. Mr Oliver also reported that details of the Trust Funds, mainly small educational trusts handled by CYPS, would be circulated to Audit Committee members outside the meeting.

In response to questions from the Chair, Mr Oliver confirmed that the Lease and PFI arrangements, Fixed Assets, Depreciation and Group Accounts had been accounted for in line with the Statement of Recommended Practice (SORP) for 2007. It was clarified that Fixed Assets leased by the Council were included on the Council’s balance sheet as assets, despite not being owned by the Council, as the liability for those assets lay with the Council. Mr Oliver reported that the Valuation of Stock was not accounted for in line with SORP 2007, as it would not be cost effective to do so. The external auditors confirmed that this was acceptable as it had no material effect on the balance sheet, but recommended that the Council disclose that this area was not compliant with SORP.

In summation, the Chair noted that it seemed that the accounting policies and accounts 07/08 had been compiled in accordance with all relevant professional standards and guidelines, pending the outcome of the external audit. In response to queries from the Chair, the Chief Financial Officer conclusively confirmed that he was satisfied that there was an appropriate structure in place to ensure that the affairs of the Council were properly managed, scrutinised and accounted for, that the appropriate accounting codes of practice, regulations and guidance had been followed  and that the accounting control systems were observed and records maintained appropriately.

The Chair moved and it was:

RESOLVED

i)                    That the Statement of Accounts 2007/08 and the associated accounting policies be agreed as advised by the Chief Financial Officer, pending the outcome of the external audit.

ii)                  That details of the Trust Funds be circulated to Audit Committee members.